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).
