As a former concert promoter and an event producer for over six years I have had a lot of experience marketing events. My marketing methods are increasing reliant upon digital avenues one of which in recent years are collective buying sites. Collective buying sites can be a valuable tool but they come with some very real costs and risks.
The first risk is to devalue your event. Deals are usually at least 50% off so you are instantly devaluing your regular ticket price. Many times event promoters will use collective buying sites to help when an event is not hitting the numbers on attendance. This can greatly devalue your event as customers that paid full price now see a much more attractive buy. We experienced this first hand when were a little low on signups and used Groupon and Living Social to drive thousands of people to our event. We had to put out some fires with attendees and vowed to our customer base never to do this again as people were (rightly so) put out to see our event advertised at a lower price. The event ended up in the black and was a run away hit but we likely lost customers for future events.
My personal feeling is that collective buying sites shouldn’t be used during the last stages of marketing for this very reason. However when used as an early bird strategy collective buying is a great marketing method. Namely because it relies on every marketers strongest tool: Word of Mouth. We were able to drive over 2000 people to our recent event out of the gate and created a natural buzz about the event before our other marketing hit. This is the right way to use Groupon or Living social.
The costs are that you will give up 75% of revenue with collective buying sites. You must be careful when implementing this strategy. Deals are usually half off and then you often split the revenue off the buys 50/50 with sites like Groupon or Living Social. You can ask Groupon or Living social for more than 50/50 but without a track record with them or a very attractive event they often will not do this split. The other problem is that ticket prices are the lowest during early bird registration. This makes it hard to make enough off each transaction to pay for your efforts on collective buying. One way to remedy this is to make a VIP offer. This will allow you to provide additional value to the consumer by adding in goodies (that shouldn’t cost you too much) like a free beer for 21+ or an extra t-shirt etc in exchange for a higher ticket price. This allows you to get closer to the revenue you were looking for after the fee to Groupon or Living Social. But you don’t have to take my word on the matter check out the below link for a well written article on the subject: