What I learned from Groupon

[drfrightner]

Here is what I learned by trying Groupon...

1) Some people played up you get some massive amount of traffic to your site from the running the program. So in doing the program even though you lose money doing it you would gain promotion traffic as a return. FALSE. We got about 250 hits to our site from running the program. Keep in mind that Scarefest.com did about 390,000 visits in October up to 20,000 in one day and Groupon sent 250 basically over a weeks time. Hardly nothing.

2) Groupon does not pay you all your money after the program is over. They pay you 1/3 after the program runs, 1/3 30 days later, and the last 1/3 90 days later. Why? Well because you have no control ... if someone wants their money back they can issue them a refund its up to them not you. So they hold your money to cover all refunds they might issue.

3) We came up with a plan that gave a perception of extra value... the program ran Sunday through Thursday the tickets only valid those days. You got a FREE speed pass, even though no speed pass was needed however this hiked up the overall value of the ticket higher so then it could be reduced from there. Even though we got them to lower their percentage most people are doing 50/50 splits or 60/40 we found that if you play hard ball enough you can get them even lower still after you factor in you are having to offer the product cheaper to make the value to Groupon then after Groupon is taking lets say 33% or up to 50% you lose a lot of money. If I sold 1000 tickets at 20.00 that would be 20k in my pocket but working with Groupon I lose up to 10,000 or more depending on the initial discounted offer... you can say on one hand 10k in the pocket or you can say 10k could have been spent on more marketing like google ads, more radio ads, mass emails, for 10k you could have bought several billboards, which all in turn would have brought you MORE THAN 1000 customers at FULL PRICE.

Groupon is perfect for those who dont' like risking their money on marketing, or people who have low attendance where anything helps.

4) Another unique finding... even though the offer EXPIRES people can still try and bring their GROUPON ticket to your ticket booth and redeem the money they spent, pay the difference and get in... okay seems cool right? WRONG... so someone comes on a day like Saturday when you have NO offer going on and they pay the difference to get the full price ticket right? WRONG... you must remember GROUPON kept a lot of your money so they went outside the promotion and came on the best days while Groupon kept their percentage. That is part of what Groupon does... what the client spends is always like having funny money at your place so yeah great we got a few more bucks but in the end groupon still benefited.

So would we do this again... NO WAY! There was NO benefit what so ever because the money you LOSE could have been invested in more marketing to lure in new customers at FULL PRICE!

I don't know anyone elses take on this but that is mine. Lastly I learned if you do a deal with Groupon you will be called by 50 other sites offering the same thing all hounding you to spend money with them. No thanks!

Larry

[UnDeRTaKer313]

groupon totally screwed up our deal. i was on the phone with the highest up person i could get convincing them we could handle the amount of traffic they were going to send us. in the end we sold 150. was a waste of time and energy at the ticket booth. really annoying.

[thrilltainment]

my groupon opinion

did you guys know that the "Groupon" concept actually originated in China? lol
http://en.wikipedia.org/wiki/Group_buy

when we opened Shanghai Nightmare for the 2nd time in 2010, we had hordes of these group buy companies call us to have us work with them to bring traffic to our haunt. all in all, like Larry said --- you bring in traffic but you're losing potential revenue.

Groupon may be good for pulling in revenue perhaps at the START of the season, to get some high traffic and some promo out there (you would treat the potential money lost as money spent on ads)--- but to do it during the season is shooting yourself in the foot. Because of the low price of a Groupon, you're conditioning your customers to never want to pay full price. That lowers the perceived value of your attraction! Also, Groupon would be better used at venues with a better repeat business model such as restaurants --- it purpose is to expose you to what the business offers, and then hopefully getting you to pay full price the next time you come back, maybe with friends... but for a haunted house, I dare say MOST of your customers only come once per season, you probably won't see much repeat sales on average.

so ya, be careful of the group buy discount model ---- be very careful.

[JamBam]

all good points

Thanks Larry for the feedback. The rest of you, too. It goes to show once again that what works for one, some, or most, may not work for everyone. The business MUST know their market and business model to decide to take the chance on anything.

[HLYWDIANA]

Thanks for the info

We were looking at Groupon as well as another similar site this year. We opted out, just didn't seem like it would fit right. Glad to see we made the right choice.

We did however do a local deal with our city's patch.com site. We didn't get a huge response, but we got a lot out of the site. It worked the same as groupon, but the cap was lower and the split was nicer.

[Terrorknight]

I had a much different outcome , I'm in Philadelphia PA and we are very heavy with haunts, so doing radio and some of the other old standbys are a waste of money. So this year I tried Groupon and and a few other group deals. I had 0 problems with them. For the most part the people that bought the deals were new customers and talking to people everyone had a great time and we got more new traffic from the people who bought the deals, came and told there friends about it, and the friends paid full price. Also these deals helped bump up the amount of VIP passes we sold to full payers and up grading dealers. So in my case it was a win win, It's not for everyone but if you plan it right I think it will surely help your numbers. And if your a new haunt could be a nice help if your have limited money for ads.

Robert

[Darkangel]

Robert,

Someone said it before and it made sense. By doing a Groupon deal, sure you sold more tickets but now that customer will probably be looking for that pricing again and they don't see it they will not as likely be willing to pay full price, unless they really loved your show. Also wouldn't you rather have 20k people pay full price rather than 40k people paying half price and you only make 25% per ticket? Seems like more headaches for less dough...


DA

[JamBam]

customers waiting for another deal

The point of customers waiting for the groupon or deal of the day instead of returning as full price customers has been brought up by a few on this thread. We did a groupon the last two years. In checking the last two years customer lists against each other, I found one, maybe two, that could have been the same people. So in with over 400 sold both years, there wasn't really a measurable amount of customers wh waited it out to buy a deal. We also did the second year two weeks before the previous one time frame.

For us, it is NOT a revenue generator, rather an exposure, pr, advertising thing that reached 35,000 and 130,000 people both years respectively. They also brought some sales at full price with them as well, which did generate sales. Of course we are also one of the 99% of haunts that are not doing 30, 50, 70,000 customers so we are not part of the reality. LOL

Know your market, plan carefully, and be realisitic about what you are doing.

[Terrorknight]

Dark,

I understand what your saying but I didn't do it to just shove more cash in my pocket this year. As I explained our market is bursting with haunts all buying the same few ad spots. So my feeling was to not spend $10,000 to $20,000 per radio station and $2000 to $15,000 on newspapers and other like forums of media, because they are muddy up and ( I feel ) don't get my message out. So I was able to cut out $80,000 to $100,000 that I would spend per year for ad's and get a buzz out by doing these online deals, so off the bat I'm up $80,000 on the year before one person walked thru my door. Also lets take radio I can spend that $10,000 to $20,000 on one station and it will reach who knows how many people are really listening at a time and about a hour and a half radius from my haunt ruffly. With doing the deals programs #1 no up front money that I need to pay back i'm only paying for people who walk thru my door, #2 I'm in Philadelphia Pa and these deals reach out and brought in customers from New York City, Long Island , and mid way into New york State down to Washington DC and everywhere in between. People drove up to 3 1/s hours to come to our haunt, sounds like a plus to me. Now after the seasons looking at our numbers and what I know about the customers coming to my haunt I know my over all numbers were up not just in deals but also full price customers. Reasons for this people bought deals and brought friends who had not, people bought deals and came had a great time and told other people about our haunt ( Word Of Mouth was up ) , also over 1/2 ( No Shit ) half the people who bought deals came out and paid to upgrade to VIP, why we had longer waits from the extra people and the customers who bought deals paid for them weeks before they came out, so the $10.00 upgrade we offered them was a no brainer when they got there because ( it's only $10.00 ). And our price structure works like this, we already go heavy on discounts to drive people in the door, so our reg ticket price is $30.00, it's set at this because we want no less then $20.00 from each person that comes thru the door. So yes we take a hit for people that don't upgrade $18.50 for two tickets, but when they did upgrade it was $18.50 + $20.00 = $ 38.50 for two people which is close to the $40.00 we are aiming for, But remember we don't have the $80,000 to pay back after the season. So sorry for getting wordy but to me it worked out but like I always try to say, it depends on your market and what kind of bizz your trying to build. Next season will be our 12th seasons at this location, patting myself on the back , I must be doing something right.

Robert