Daily Deal Sites: Good or Bad for Sports Franchises?

Daily Deal sites such as Groupon & LivingSocial have taken the consumer marketplace by storm the last few years, esp. during this economic downturn.  People, now more than ever, are looking for a deal and looking for value.  As a consumer offers on these Daily Deal sites do typically have value and I have taken advantage of a few.  I recently worked on landscaping in my front yard and took advantage of a Groupon offered by the nursery in my neighborhood.

As a Sales Manager, I have mixed feelings on Daily Deals.  There are positives and negatives (at least in my mind) to these sites, and below I will offer my thoughts.

1. Revenue Model:  The revenue model of these daily deal sites typically is the biggest deterrent for any business, and sport franchises are no different.  The standard Groupon model (in short) is that you have to offer a 50% discount to the consumer.  From there, it is a 60%/40% revenue split (or so) with Groupon.  What does that mean to your business - you receive 30% of the market value for your product.  Let's look at it in hard numbers.  If you sell a ticket for $50 normally, you then must offer it on Groupon for $25.  In return, you receive $15 for that ticket (if it is purchased).  Now as a business you have to ask yourself the following questions:

     a. Is it better to get $15 for that seat better than getting $0 (or not selling it)?

     b. Will the ancillary revenue from parking, concessions, merchandise make up the difference?

     c. Are you devaluing your product?

     d. Are you creating true "fans"?

2. Creating "fans":  The answer to question "d" above is another determining factor as to whether or not a Daily Deal offering is truly valuable.  The goal, one would hope, of offering a Daily Deal is to attract new customers to your team/venue and turn them into long-term fans.  How are you making that happen?  Yes, they may have a top-notch experience; they may see the greatest game all year or greatest event ever at your facility.  But is that enough to get them to pay full price for that same seat next time?  Was their experience more valuable then the $25 savings they received for admittance?  

Can you convert this Daily Dealer into a return or renewal customer?  That is the goal behind these Daily Deal offerings, is it not?  

For some, Daily Deals managed in an organized and structured way can have positive results.  For others, Daily Deals could be a disaster.  Unfortunately, you and only you know your business and it's priorities.  Only you can create the plan that best works for your franchise.  Hopefully the few questions above help lead you down the right path.  

I'm not knocking Groupon, LivingSocial or other Daily Deal companies.  I do feel that they have merit, to the consumer.  Professionally, I'm not sure that the view is worth the climb - but my jury is still out.

Have you had success using a Daily Deal site?  What do you consider "success" and how did you measure your ROI?  Leave a comment here or on my Google+ page (+Jason Anderson or http://gplus.to/AndersonJason81).  

A Month of Insights...

It's been a long month since I've been away and a lot has happened.


1. Google+ release (at least to beta) - well Google has taken yet another stab at the social side of the world-wide-web and this time, I think they have gotten it right.  I was lucky enough to gain access to G+ over the weekend and have had some time to play around.  While a lot of the functionality reminds me of Facebook (which is a great idea), the major enhancement that I feel is key is the addition of "circles".  It's Google's way of grouping your contacts together so you can message, huddle (text chat) or hangout (video chat) with a more targeted group of friends or contacts.  What does this mean?  You can keep your business friends and contacts separate, message them separate, share info separate, all from the same page (I have two Twitter @'s for just that reason).  The major negative so far (I was lucky enough to not be included in their SPAM issue on Saturday) is that it is only in beta and there aren't too many people (only 4.5 million) on the platform.  What does this mean?  It is difficult to find friends/contacts.  Over time, this will undoubtedly be corrected, and with a few minor enhancements, this could be a true player in the social space.  (I can be found at gplus.to/AndersonJason81 - gplus.to is a great vanity URL site already created for the platform).


2. Kentucky Speedway parking debacle - anytime you can host an "Inaugural Event" with a potential 107,000 fans you are going to run into your share of hiccups and miscues.  This past weekend at Kentucky Speedway, however, was anything but a hiccup.  A 5-hour, 20 mile traffic jam marred a great NASCAR Sprint Cup Series race.  Denny Hamlin almost didn't make the official Driver's Meeting due to the jam; many fans parked on the highway and pulled out the grill's, corn-hole boxes and law-chairs and set up shop for the day.  The problem?  It wasn't that there is one major in-road to the facility, although it is a problem; it was the fact that the track was allowing fans to park and use additional spaces to tailgate!  Fan experience is key at a NASCAR event, it's a long day followed by a long race, but Fan experience doesn't only include their ability to tailgate and party pre-race.  A major part of Fan experience is traffic flow, how long does it take to get in and out of a facility (and can they even get to the facility).  The facility that I work for knows all too well about the issues you can face with limited parking/in-roads... our facility only had one point of entry/exit until about 10 years ago.  Many fans missed the pre-race ceremonies, many fans missed the green flag, and most importantly, many fans missed the race all together; either turning around in frustration or being turned around by law enforcement officials.  The Speedway made it worse by not addressing the situation publicly until late Sunday night (it was a Saturday race) and will still wait another week to announce what they will do for those ticket holders that could not attend the event.  To make matters worse, this wasn't the first issue with parking (they have had many others at IRL events in past years) and it wasn't their first headline grabbing run-in with ticket holders.  Two weeks before the race, the track openly offered discounted tickets on their website, stating that they were acting like any other business (they mentioned Macy's specifically) trying to move it's final inventory.  Um, from every other ticket office in NASCAR, I want to say thanks Kentucky Speedway.  That is exactly THE OPPOSITE of what every facility is trying to do right now.  Why reward those that wait until the last minute to choose to attend your event?  Why hurt the fans that guaranteed that they would support you months, maybe even a year, in advance?  I hope Kentucky Speedway can get this figured out, they had a great race on the track, but the black eye(s) left by these incidents hurt everyone in the long run.  


3. Sales rep training - for the first time in a year, I had the opportunity to train five (5) new sales reps for our company.  We took a week and tried to install a "basic offense" and base knowledge of our facility.  I learned something this week, I love training new reps.  They want to learn, they want to become not just sales reps, but great sales reps.  They ask questions, they want to impress, they don't want to screw up (but they do...).  That got me going; I came into work every day ready to get to our meeting room.  While I'm not the end all-be all of sales training, and I don't know everything, I do enjoy imparting what knowledge I have to these eager new hires.  I look forward to seeing how well they produce for us over the next few months, and, with any luck, hope that they can become successful in their careers.  At the end of the day, that's the goal, to hire, train and produce qualified and successful sales representatives that can go on to become successful in this industry.


That's about all I've got right now, the MLB Home Run Derby is starting and my attention has officially be diverted.  I look forward to feedback on this, and any other blog posts.  Find me on Twitter (@JAndersonTix, Google+ http://gplus.to/andersonjason81 and on LinkedIn http://www.linkedin.com/in/jasonanderson81.  Follow/Friend/Request to connect with me and please send me feedback (or comment directly on this post).


Cheers!