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Group Buying: Does it work for arts .orgs?

Everyone is hearing a lot about group buying sites lately such as Groupon and Living Social.  (There are tons of others, but for the purposes of this post, I’m going to focus on those two because they are the biggest and most well-known.)  Arts organizations are getting curious to see if it could be a good thing but cautious as to if it will really work.  The answer to that question is a resounding “yes” if it is done correctly.  Before putting an offer on one of these sites, there are a few things that you must remember:

1.  The purpose of putting out an offer for an arts organization is to move inventory that would not sell otherwise.  This might seem elementary but we must keep this top of mind when choosing the performance, seating section, and price for the offer.

2.  Remember who the offer will be sent to.  These people most likely do not already come to your performances.  Choose your repertoire for the offer with that in mind not only so that you can sell more of the tickets but also so that those people that are having their first experience with your organization will have a good time and want to go back.

3.  Price the offer right.  As said above, most of the people purchasing your offer will probably have not been to your theater before.  Even if you are discounting a ticket that would regularly be $150 down to $80 that is still too expensive for someone who is not yet invested in your product and doesn’t share the same view of its value in the marketplace.  I recommend going no higher than the price point of $40 with something more like $20 – $30 being optimal.

My one beef with these sites that has come out of my dealings with them thus far is the amount of inventory that they want.  If they want to continue to be able to offer performances along with cupcakes, pole dancing classes, and spa services, they need to realize that arts organizations are dealing with a limited amount of inventory to start out with.  There are only so many seats in a theater.  Once those seats are filled, we can’t magically add more.  Even an opera company that performs in a 2,000 seat theater can probably only offer 200 – 400 seats per run of a show because of subscription and single ticket sales.

In short, unless you are selling out 100% of your performances, there will always be inventory for these types of deals.  Personally, I would rather get a person into the theater at a $20 price than have the seat go empty or give it away for free.