Using Daily Deal Coupons for Activities and Memberships

Search for “extreme couponing” on the net and you’ll turn up with more than four million search results. Yes, coupons have long been popular with grocery chains and similar stores touting their latest deals on everything from canned soup to shampoo. We usually associate this type of promotion with commodities rather than activities.

While online coupons are not a new idea, in the last few years we’ve specifically seen an explosion of group-based discounts or daily deal services. The two most popular are Groupon and LivingSocial. These similar services offer successful sites with daily time-sensitive discounts, which become active when a certain number of coupon purchases are reached. This trend has taken coupons to a new level, spreading like wildfire to allow discounts on activities such as weekend getaways, concert tickets and dance classes. Now more than ever, online coupons are an effective way to attract new participants, fill programs and boost registration. So should you jump on the bandwagon and give it a try? Let’s look at some examples.

Daily Deal Site Popularity

Source: http://blog.comscore.com/2011/06/groupon_livingsocial_grabbing.html

The City of Spokane, WA, recently used Groupon for successful promotions on passes for Riverfront Park, a large park with rides, theatre and other facilities. They offered discounts on Winter DayPasses, Summer DayPasses and an option for admission to their SkyRide or IMAX theatre. Debby Dodson, Assistant Manager for Riverfront Park, told us, “We feel the key to Groupon discounts benefitting our bottom line, besides the phenomenal deal the guests received and the popularity of Riverfront Park, was it is available inventory. We have space on the rides, in the Theatre, at the Ice Rink, etc. There were some administrative costs associated at our Guest Services location but I would say for us, it was less than 5% of the revenue we received.”

Spokane’s Groupon marketing is a great example of how online group discounts are well suited to memberships and passes for facilities. Even at a discount, increased use of facilities can draw additional revenue from food purchases, parking and use of other services.

Group discounts aren’t only useful for membership discounts. The City of Roanoke, VA, used online coupons for camps and programs. Having previously placed daily deals in the local newspaper, they had only sold about a dozen discounts and weren’t quite getting the reach they wanted. Using Groupon, they offered the option of $10 for $20, or $20 for $40 worth of programs and sold about 180 coupons. Leah Goodman, Marketing & Information Specialist for the City of Roanoke, added that only 30% of these purchases came from the city. While the online discount did not make a large impact on revenue, they were able to capture a new audience from surrounding communities as far as 75 miles away. The coupons also encouraged participants to try new programs they hadn’t tried before.

Parks and recreation organizations are’t the only ones taking advantage of this trend. YMCAs use group discounts for memberships and programs, Boys and Girls Clubs use them for camps and activities, and other community organizations such as gymnastics clubs use them for classes.

Like any fast-growing trend, jumping into online group coupons can be daunting. If you think you’re ready to make the leap, consider your reasoning. This type of marketing is best suited to help with:

  • Extra capacity: A low season or facility with additional, unused capacity.
  • Additional or repeat sales: Discounted memberships, passes or trial classes can result in future full-price purchases, encourage participants to try new activities and  increase purchases of additional items (such as food and parking in the Spokane example above).
  • Exposure: This can be an excellent way to spead word of mouth and get new participants in the door. It’s also a great way to draw participants to new programs or facilities.

As in all marketing campaigns, it’s important to consider your target audience. According to comScore, Groupon and LivingSocial are grabbing slightly different market segments.

Groupon and LivingSocial Demographics

Source: http://blog.comscore.com/2011/06/groupon_livingsocial_grabbing.html

LivingSocial seems to reach a higher age range than Groupon, although both would be better suited towards a well-connected, well-educated, younger demographic than traditional media. A newer, more targeted option is Schwaggle from Active.com. This daily deal service offers the benefit of a niche market with fitness-related deals for active consumers. Active.com is the world’s largest directory of sports and recreational activities, so this site provides access to a large group of willing participants.

Regardless of the approach you take, it’s often best not to put all your eggs in one basket. Test the waters and continue using traditional advertising channels such as the local paper, then compare results to see which channels work best for you.

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