Goldstar, Groupon, Living Social and more… These days there’s more and more web services that feature performing arts, retailers, restaurants and more at typically 50% discount for those who subscribe to their service. We see many of our clients utilizing these services as a marketing effort for their events. So what is the return of these options on your bottom line?
Typically these services want you to discount by 50%, and then they take a chunk of that for their own profit and you get the small portion that remains. So a $25 ticket might return to you as $6. So obviously turning a big profit from these is not the goal. So what is?
Some organizations use these tools toward audience building. The hope is that patrons will try out your organization for the first time, tire kicking or getting their feet wet, and then you’re banking that they’ll have such a great time that they’ll want to come back and pay full price. For those of you who have used these services, has that been the result? My guess would be no, at least in most cases. The patrons who subscribe to these services do so planning to find low cost entertainment options, to get the secret bargain! It is not likely that they will suddenly change their MO to want to pay full price. Instead they’ll kick the tires on another organization at 50% discount next time. They’ll use the same service over and over to explore various entertainment options, or even come to yours again, but using the same discounted offer.
Now it’s possible that your ticket price is just too high for a segment of your potential audience. Obviously you don’t cut your prices deeply and undervalue your product. But you might consider targeting these discounted patrons in the future with other direct discount offers… such as 25% off your next show. Some organizations I’ve seen also have a section of the less desirable seats priced at a much lower flat rate, just so they have cheaper standard option for patrons with less to spend. If price is really the issue, then with some good communication of cheaper seating options, you should see those seats start to sell. If you don’t, then you know price is not really the factor. At a theatre I work with we tried price sectioning our venue to offer more premium seats, and more value priced seats. The bulk of our audience continued to purchase the best seats at the top price and very few opted for the other sections. Using this information, combined with some surveying, we learned very quickly that our patrons consider the prices on par with the value of our product. In fact, we’ve raised prices each of the past 2 seasons with very little if any impact on ticket sales.
But ultimately, my experience with these discounts is that the hope that you’ll grow your audience of full-price ticket buyers from these discount services is not going to come to fruition. Instead, these should be seen as a way to help fill up what would otherwise be smaller houses. If you have the seats to fill, these services can help. Maybe consider releasing seats to these discounters only for preview and opening night, when you really want a full house to generate buzz to help propel the rest of the run. Or use them on weeknights only when your audience tends to be thinner. If you start to fill up with full price buyers then certainly scale back or discontinue these discounts.
What’s been your experience with discount services?
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By Patrick Spike – Product Manager for Ticket Turtle
