Dear All,
Two further thoughts:
I wrestle with these questions and how to
quantify the results all the time J !
Best Wishes,
Historic Royal Palaces
-----Original
Message-----
From: Museum discussion list
[mailto:[log in to unmask]] On
Behalf Of Elizabeth Maurer
Sent: 21 June 2011 20:42
To: [log in to unmask]
Subject: Re: [MUSEUM-L] Does your
institution participate in Groupon
Cindy,
I worked at a museum that
participated in both Groupon and LivingSocial promotions. The key to
receiving benefit is to understanding the tradeoffs.
1. It does not benefit
anyone to offer an
already popular "product". For example, if you are already near
capacity, running a Groupon would displace full price customers for discounted
customers. The solution is to offer a product only where you have excess
capacity. In the museum world, this might be shoulder seasons of January/February
or September/October. You may stipulate the redemption period in the
offer.
2. Many merchants who have gotten in trouble with this have done so by selling their products at less than cost, hoping that Groupon customers will buy additional product or return. This has been especially the case in the restaurant industry where the Groupon revenue does not cover labor costs or overhead. If you sell too many Groupons, then it can backfire. Anecdotally I've been given to understand that Groupon customers do not use the savings to buy additional product or convert to regular customers. One way to overcome this is to limit the total number of Groupons that will be sold during the promotion, which you can do when setting up the contract. If you do not have a capacity or overhead problem, then this is not a concern. If the Groupon revenue will cover your expenses, then there is no need to limit them.
3. Groupon
stipulates that your "product" be offered at half price to make it a
deal. They typically take 50%. If your normal admission is $10 per
person, they will sell it for $5 and you will get $2.50. If you are early
into the market, you may be able to negotiate a slightly better split as they
will want to use your success to market to your "competitors", ie the
museum down the street.
If you cannot at least
cover expenses at a quarter of your regular price, don't do it. You
really can't count on no shows to make up the difference. My museum
tracked redemptions as they arrived--by customer name--in part to make sure
that the certificates weren't photocopied and reused, and we did not experience
a significant no show rate.
4. If you
participate, then make sure you track conversions. A museum that sells
memberships can track how many people purchased full price memberships the next
year. My former museum had a very low percentage of repeat visitors, so
we knew that the Groupon visitor would be making his one and only visit.
However, by putting them through during the off season when we had excess
capacity we were not incurring extra costs and might have benefitted from
increased visibility and word of mouth.
In summary, you can make
it work. Just make sure that you can handle the capacity without adding
expense. We restricted the Groupon visitors from separately ticketed
programs, for example, to maintain space for full price visitors and to not use
up materials that had an associated cost.
It was
our experience that the typical Groupon buyer had not ever planned to visit us,
due to the admission price, and it was only the discount that lured them in.
Therefore, we learned--through point of sale surveys--that we were not
exchanging current discounted visitors for future full price visitors.
This, combined with our low per visitor operating costs, made it a
worthwhile investment.
Good luck with your
promotion,
Liz Maurer
On Jun 21, 2011, at 1:37 PM, "Cindy Boyer" <[log in to unmask]>
wrote: