A few weeks ago, I attended the first night of a three-day music festival in Camden, NJ, presented by a local, member-supported radio service. Since I am new to the area, I was not familiar with the organization or their annual festival. However, I love live music and take advantage of almost any opportunity to gain exposure to new musicians, artists and genres, so an hour after finding out about the festival I was on the ferry bound for Camden.

Once we were off the boat, a few of us had to buy tickets and a few had some waiting at will-call, while the rest had tickets in hand and were ready to enter the event. Once I was in the appropriate line, I saw that a ticket for all three days was $120, but I wasn’t able to attend the following days’ shows, so opted for the one-day pass at $60. Others in our group were turned away from the will-call table because they had purchased their full-festival passes on Groupon.

Groupon buyers were directed to the entrance on the opposite side of the festival, so we had to split up from the rest of our group to collect their tickets. About 30 minutes later, we had wrapped up our business at the Groupon table and were reunited with the others in our party. Unfortunately, we did not anticipate needing the extra time to enter, so we missed the first band on the main stage.

The Groupon ticket holders couldn’t believe that I had spent $60 for a single day’s pass while they paid less than $50 for all three days of live shows. Moreover, they couldn’t imagine ever spending full-price for the tickets again, despite being fans and listeners of the radio station and having attended the festival in the past.

My biggest concern with a Groupon offer is not that it won’t perform well for the event, by bringing in new people and generating revenue; it is that these people will never come back without a substantial discount or they will be so inconvenienced while attending the event that they will leave with a bad taste in their mouth.

A Groupon offer risks cheapening the product in many cases, especially when the full price amount isn’t in any way unreasonable. I have gladly spent more than $60 on many occasions to see a single group or performer live, but I felt ripped off next to the bargain buyers. Context is everything.

Before you use Groupon for your next event, ask yourself the following questions:

  • Why am I considering using Groupon for this event?
  • Are current marketing efforts underperforming? Why?
  • Are there “warmer” leads (lapsed buyers, for example) in my own database that may be prospects for the event or can I exchange mailing lists with another organization in my area that draws a similar crowd?
  • Will Groupon help fulfill short or long-term goals?
  • Does this offer discount the value of my product?
  • Is this an event that would have broad appeal to the public and highlight the quality of my organization’s programming throughout the season? Will the experience motivate people to become repeat buyers?
  • Can these buyers be tracked following their initial Groupon purchase to measure the overall success of the offer that initially brought them in the door?
  • Can I afford to bring them back with a second, lesser discount or will buyers experience sticker shock upon seeing the cost for a full price ticket?
  • Can I provide these buyers with a great experience that makes them hungry for more (at a higher price point)?
  • What message will this send to my current single ticket buyers and subscribers or season ticket holders?

Whatever your decision, be sure to appropriately manage your and your team’s expectations. After the event, review the results and look at the cost of sale, return on investment and ticket revenue per capita and plan your next move!