Living Social, Groupon, and The Like – Are These Group Deals Really a Good Deal for Your Organization?

I love a good deal. I often peruse Living Social, Groupon, and several other local sites looking for steals. But are these sites really good for the businesses using them?

I believe the issue lies in the recurring themes of available deals.

For instance, discounted massages are always available on these sites, changing the market value of these services. The hope is that customers will use the deal to find a masseuse that they enjoy, and will then become recurring, loyal customers. In reality, however, it seems more often that a new market of buyers are created – those only willing to pay the discounted rate for the service. But does this mean that these deal sites provide no value to the sellers? Perhaps not

Here’s some tips on how to take advantage of group deals, from a few of our friends in the Arts and Cultural space:

Replace Your New Member Acquisition Marketing

Instead of doing an expensive mailing to acquire new members, Vanessa Crews of the UC Botanical Garden at Berkeley, says they use these sites to offer a deal for new customers only. Even if the return is minimal, you’ll be receiving funds instead of cutting checks for marketing materials. You may even be able to argue a better rate for your nonprofit, retaining more than the standard 50% of the net revenue.

Generate Fast Cash

Lisa Saneda of the San Diego Museum of Art points out the quick revenue boost that comes with deal sites. The deals are for a limited time and often for a limited quantity, making demand high. Selling 500 memberships in a week generates quite a bit of cash, even if you’re only receiving 25% retail value.

Add Value to Your Membership Program

The Center for Wooden Boats used a group deal site to offer 2 hours of free rowboat rental with the purchase of an Individual or Household Membership. This way, they retained their full membership value. Using deals to add additional value to membership allows you to increase membership sales, while avoiding devaluing your original membership program or upsetting current members.

Expand Your Reach

We’ve often heard that the renewal rate for deal memberships is low. Even if that’s the case, you have to determine what your goals are and if this will help you meet them. Are you looking to increase your reach in the community and recruit people who would not otherwise join? Then a deal may accomplish this for you.

Even if only 10% renew, you may end up creating some extremely loyal members, donors, or volunteers.

Think about the goals and immediate needs of your organization. Get creative with the deals you offer and try to negotiate a better rate for your nonprofit. Weigh the pros and cons of an influx of new customers and the administrative and staffing needs that come with them. Group deals may be a good deal for your organization as well.

ABOUT THE AUTHOR

Kristen Gastaldo

Kristen Gastaldo joined Blackbaud’s Altru team in March 2012, leaving behind the late nights of the music business. She spent 8 years in the music industry, managing a venue in Charlotte, NC, and then relocating to Charleston in 2007 to help reopen the Music Farm. While at the Farm, she founded the Lowcountry Artist Market, a seasonal market that features local vendors selling handmade and vintage goods. Her background in event management, marketing and ticketing in the arts and cultural community led her to pursue a career with Blackbaud, as Altru’s Community Manager. Kristen is here to help users connect with information, each other, and to help foster our sense of community.