On the Discounting of Tickets (Part Three)
Groupon (or any other sites in the group purchasing milieu)
Group purchasing can be a wonderful way to discover new restaurants, businesses, and experiences. For many businesses it can be an outstanding way to be introduced to new customers, however it’s hard for us to make the same argument for arts organizations.
There are a number of reasons we find Group purchasing for arts organizations to be problematic, including:
1) Lack of Limitations: Unlike the other ticketing strategies listed above, group purchasing discounts are available to every member of the general public. This runs the risk of upsetting your full-price patrons, while also creating an undesirable impression of having difficulty selling a show.
2) Perceived Value: With the ticket discount programs above, there is an ostensible reason for the discount and considerable limitations on the purchase. Without these in place, group buyers accessing a ticket at a 50 per cent discount naturally establish a mental correlation between the amount they’ve paid for the ticket and its value. Trying to get them to pay twice as much the next time around becomes extremely challenging, as they can not cognitively justify the additional cost. This is one of the key reasons behind the low amount of repeat business generated by group purchasing.
3) Nature of the Audience: Just as Under 30 programs attract an audience of individuals attuned to arts events, group buying email lists gather individuals looking very specifically for deals. As these are individuals who, by their nature, are not looking to pay full price, the likeliness of transitioning them into regularly attending patrons is low.
4) Nature of the Business: Group purchasing sites exist to make a profit. This has little to do with the goal of audience development, but is still very important when considering group purchasing as a ticketing strategy. In a standard arrangement, an arts organization will discount 50 per cent off its tickets and then evenly divide the promotion’s revenue with the group purchasing site (earning just 25 per cent of ticket price).
The small amount of revenue generated and low volume of repeat audiences via ticket discounting lead us to believe there is almost always a better strategy to pursue for arts organizations.
These are just a few quick thoughts on a small number of ticketing strategies. If your organization has experimented with audience development strategies that we haven’t discussed, or if you, as an audience member, have encountered any particularly memorable or out-of-the-box ticket promotions you’d like to share, please let us know!