Groupon and Mass Discounting Strategies

Spurred in part by an excellent article written by Chris Jones of the Chicago Tribune, in the past month, there has been a lot of talk about cultural organizations using Groupon (an online, mass discount website). Just like any mass discounting method, using Groupon should be a well thought out strategy. Used correctly, and it can work very well. Used incorrectly, and it can be very costly.

Things to remember about Groupon:

• It is out there for the world to see and it was designed to be used by social media, so that it is picked up and passed along at a very rapid pace. From some of my previous posts on this blog, you probably know that I am a fan of what I call "ninja discounting." Very rarely do I use mass communication to advertise and promote discounts, preferring instead to use one-to-one direct marketing techniques aimed at very strategic recipients. If I need to discount, then I want to make sure that I can control who gets the discount so that it flies under the radar of full price buyers.


• Groupon generally rewards a pattern of behavior that isn't desired--namely, last minute ticket purchasing. Before turning to a mass discounting strategy like Groupon, performing arts organizations will wait to see how their standard campaign is doing. If they are on goal, most won't discount. If they are off, time to throw out the offers. But this usually happens pretty late into a campaign. Let's use the Joffrey Ballet that Chris cites as an example. Their programming begins in October, as does Arena Stage's, so I would guess they launched their subscription campaign last spring. How do you think a subscriber who purchased early and at full price will feel when he sees that if he waited several months he could get a subscription at 50% off? and what do you think his purchasing behavior will look like next year? and trust me, he will get the offer because as my first point illustrates, it goes to everyone.


• Groupon is a for-profit company, and operates like one. They take a significant cut of each sale made. Using the example from the Joffrey Ballet, subscriptions were offered at 61% off regular prices. However, the cut that the Joffrey gets is significantly less than that, so they most likely sold those subscriptions at 75-80% off. Larger organizations can negotiate better splits with Groupon than their smaller counterparts, but I haven't heard of anyone keeping more than 60% of the full sales price.


• We must always remember that discount buyers behave differently and you must budget for that. Full season subscribers at most organizations renew at a rate between 85% to 90%. However, I have found that full season subscribers that purchase their subscriptions at a drastic discount renew at a much lower rate (around 60%). Additionally, because they spent significantly less amount of money per ticket, the no show rates are also substantially higher, sometimes leaving large empty holes in your house.

Instead of putting subscriptions on Groupon in order to attract thousands of new subscribers, I would do the following:

1. Using your database, compile a list of the tough holdouts that you have hit up seven to eight times already during your subscription campaign (usually includes single ticket buyers and non-renewed subscribers from the past 3-4 years).


2. Next, trade lists will all the other arts organizations in town.


3. Then possibly consider purchasing lists from a list broker.


4. Combine all the names into one master document, and suppress your current subscribers, donors and full price ticket buyers.


5. Using the exact same deep discount offer you were going to give to Groupon, develop a cheap, but effective mailer and send to your list. Make sure it is an offer that is impossible to pass up, and that the offer leads in design and has a deadline. (note: if you don't have a large box office staff, then make sure the offer is online only, or you will be swamped). The key is to keep production and mailing costs low--send using non-profit postage and use a discount printer/mail house.

By doing this, you get to keep the entire purchase price of the discounted subscription, and you minimize the possibility that your dedicated and loyal patrons will see that you are heavily discounting late into your campaign after thousands have already purchased.

I find that Groupon is most useful when trying to fill large sections of an empty house on dates that are less desirable. Full price ticket buyers don't seem to mind because they didn't want those dates anyway, and most companies budget low percent paid capacities on those dates so it is additional revenue that wasn't anticipated.

Is There A Need For Hydrochloric Acid In The Stomach?

Last week Dr. Joseph Mercola made several statements concerning the negative affects of drinking alkaline water.

According to Dr. Mercola drinking alkaline water is of no value because it will be minimized by the hydrochloric acid of the stomach.

That's exactly the point Mercola! You want to minimize the hydrochloric acid residues in the stomach!!!!

Of course what Mercola does not explain is the biochemistry of the digestive system and especially the stomach. The facts are that for every molecule of hydrochloric acid produced in the stomach an equal amount of sodium bicarbonate is produced by the cover cells. The equation is as follows: NaCl + H20 + CO2 = NaHCO3 + HCL.

The stomach pulls sodium, chloride, water and carbon dioxide to make sodium bicarbonate, an alkalizing compound with the waste product of hydrochloric acid.

The stomach will always produce sodium bicarbonate to alkalize the food we eat or the liquids we drink to prepare the food and drink for biological transformation into stem cells in the crypts of the small intestine. The more acidic the food or drink the more sodium bicarbonate will be produced to buffer the acids of the food or drink. This of course leaves you with a belly full of acid which leads to all sorts of stomach disorders including the acidifying of the blood and then tissues.

The stomach does not need to produce any sodium bicarbonate when we are eating or drinking alkalizing foods or alkaline drinks, including electron rich alkaline water.

The key here to remember is this: the stomach is NOT an organ of digestion but an organ of contribution and its main contribution is to alkalize the food and drink we ingest.

You want to drink electron rich alkaline water to neutralize or buffer the hydrochloric acid in the stomach.

The stomach is NOT an organ of digestion but an organ designed to alkalize the acids from food and metabolism.

Bottom-line the best thing you can do to support the stomach is to drink electron rich alkaline water with a pH of at least 9.5 or better. You will be preventing serious stomach disorders and preparing the food and drink for its ideal pH in the small intestine at 8.4 for biological transformation into stems cells in the crypts of the small intestine.

My best advise is to drink at least 1 liter of 9.5 pH alkaline electron rich water for every 50 pounds of weight. You will be hydrating, alkalizing and energizing your body. There is nothing more important than drinking alkaline electron rich water other than the oxygen you breath.

Reversing High Blood Pressue, High Cholesterol, Obesity and Type 1 Diabetes

Subject: Re: The pH Miracle Lifestyle and Diet

Dear Dr. Young,

I started the pH Miracle Lifestyle and Diet on the evening of July 25, 2010.
Roma, my former wife & I met in St.Louis on the 16-19 of July.
It was the first time we had seen each other in 11 years.
On the 20th I was back in Nashville.
Roma ask me to comeback the 23-26 of July.
While I was in St.Louis, Anne Marie & her husband,Jonathan called to ask Roma to come up to their home in Iowa, since she was so close by in St.Louis.
Roma lives in Maui, Hawaii, they had met & became friends when Anne Marie & Jonathan were visiting the island.

She said she would come up if Anne Marie would see me professionally.
We arrived on the afternoon of July 25th, 2010,we met them at the Guru Purnama Celebration on campus at M.U.M.(Maharishi University of Management).

I was happy to be at M.U.M. because I have been doing T.M.(Transcendental Meditation) for 36 years.

We stayed with them & they fixed dinner for us that night.
The next day we ate with them before my appointment.
I enjoy the pH Miracle Diet food they prepared.

I had my microscopy live blood cell & MOST analysis done at 3:00 P.M. on July 26, 2010 with Anne Marie.

Anne Marie advised me that since I was taking such large amounts of insulin that it might take some time before getting any positive results.

I was taking a shot of 56 units of Insulin NPH 100 Unit / ML Novolin N, twice daily, every 12 hours.
Also, I was taking a shot of 10 to 20 units of Insulin,Aspart 100/ML Novo, 6 times a day, with 3 meals,2 snacks & bedtime.
In addition, I was taking Metformin HCL 1000 mg. Tab, 2 times a day. This the maxmium dosage allowed.

Plus, I was taking : for high blood pressure,10 mg, half a tablet of Lisinopril 20 Mg Tab 1 a day.
for high cholesterol,40 mg., half a tablet of Simvastatin 80 Mg Tab 1 a day.
for frequent urination,4 mg of Tolterodine Tartrate 4 Mg SA Cap / Detrol LA, 2 times a day & 5 mg, half a tablet of Zolpidem Tartrate 10 Mg Tab, 1 a day.

My type 1 diabetes was so bad that in the spring of 2005, I was rushed to the E.R. with a blood sugar over 600.
The next 3 years it was in the high 200s & 300s.
In the last 2 years with the help of 8 shots a day, my blood sugar has been in the high 100s & 200s.

My doctors told me as a result of years of high blood sugar, I developed neuropathy (nerve damage) in my toes/feet, & once the nerve is dead it will never regenerate.

Finally, I was scheduled for botox injuctions in my bladder to end the nightmare of having to get up every hour to urinate every night for the last 2 years.

I had not had any rem sleep in over 2 years, I was constantly exausted & none of the medications worked.

Anne Marie advised me to stay on my medications, but to be sure to check my blood sugar more often because I might need less insulin.

Being an ordained minister I have always trusted my intuition.
The morning of the 27th of July I stopped taking all insulin & I stopped taking Metformin.
The morning of the 29th of July I stopped taking the Lisinopril.
The morning of the 30th of July I noticed that I felt the pads of my toes for the 1st time since 2001.
The evening of the 31th of July I stopped taking the Simvastatin, Detrol LA, & Tolterodine Tartrate.

I am cancelling the botox injections because I am now sleeping through the night !

I have been drug free since the 31st of July.

I am a veteran, I get my medical care at the Veterans Hospital in Nashville, Tennessee.
My 1st appointment since becoming drug free was with Donna, my dermatologist at 1:20 P.M. on August 3, 2010.

She said that I looked great, better than she had ever seen me before.
She said that it looked like my skin was glowing
.
My 2nd appointment was with my endocrinologist, Dr. Niswender at 10:30 A.M. on August 12, 2010.

He said that my blood sugar looked wonderful & that my blood pressure was normal, 124/70.

He said that the last time I saw him I weighed 258 lbs. & on that day I weigh 237 lbs.,a loss of 21 lbs.

He ask me how much insulin was I taking ?
I told him none.

He couldn't believe it.

He ordered a complete blood work.
After seeing the results he was stunned.

He said that my blood sugar should be between 80 -120 & that for the first time I was averaging that.

He said that I didn't need to ever come back to see him, but he ask me to come back in 4 months to make sure the results are permanent.

My blood sugar :

7/25/2010 137
7/26/2010 156
7/27/2010 68
7/28/2010 87
7/29/2010 126
7/30/2010 129
7/31/2010 114
8/01/2010 119
8/02/2010 126
8/03/2010 122
8/04/2010 109
8/05/2010 110
8/07/2010 82
8/08/2010 113
8/09/2010 131
8/10/2010 142
8/11/2010 125

Now, my average blood sugar is around 100.

My 3rd appointment was with my internal medicine specialist, Dr. Sastre at 11:30 A.M. on August 17, 2010.

She said all my vitals looked great & not to come back for 8 months.

She said that my cholesterol level is now completely in normal range.

I am drug free & feeling great !

I am grateful to Roma for getting me there.

I am very grateful to Anne Marie, Dr. Patrick Sobota & Dr. Robert Young & Shelley.
You help save my life !

I continue to lose weight. I now weight 230 lbs, a 28 lbs loss.
I have the energy of a teenager !

I have started jogging for the 1st time in 3 decades.

My life is wave after wave after wave of bliss !

It was the perfect synergy of events : reconnecting with my former wife,Roma, reconnecting with M.U.M. for Guru Purnama, reconnecting with my spiritual mentor,Jerry Jarvis, 36 years of meditation, having Anne Marie do the consultation,learning the diet and doing the diet, & follow up with Anne Marie & Dr. Patrick Sobota.

Thank you all !!!

I believe that my healing is the result of many years of prayer & yes my prayers were answered when God lead me to Dr. Robert Young & his team !!!

Gratefully Yours,,
Rev. John Copeland

P.S. my website is www.christchurch.webs.com ; .

Remember to Test even the "Sacred Cows"

I think I have always been attracted to arts marketing because it allows me to use both creative as well as scientific talents. To this day, I might be the only person to graduate from Missouri State University with a major in speech and theatre education and a minor in mathematics. So it should come as no surprise that I take a very scientific approach to marketing.

In every campaign I lead, I constantly manipulate variables and note outcomes in an attempt to continually improve upon previous results. The easiest variables that marketers turn to are design and pricing. How many times have you tested a carrier package? an offer? pricing strategy? Probably quite a few times. Now think about how many times you have tested different timing schemes for putting products on sale.

This was the first year in my tenure at Arena Stage where we experimented with using timing as a variable. For almost as long as we have had mini-subscriptions, we have put them on sale at the exact same time as our full season subscriptions, fearing that instead of waiting or upgrading, our potential mini-subscribers would opt to go elsewhere for their entertainment. The fear of losing potential mini-subscribers was so strong that for many years timing wasn't even considered a possible variable to test.

As a leader, you have to always remember that the fear of a potential loss will always be significantly more powerful than the possibility of a probable gain. By nature, we are risk averse, and if given a choice to pursue status quo or trail blaze, we will choose status quo each and every time unless there are overwhelming odds. But you have to be mindful of "sacred cows," and be willing to test even the most concrete of assumptions. In my career, the testing of "proven strategies" has led to some pretty remarkable results.

For our inaugural season in the new Mead Center for American Theater, we experimented with exclusively putting full season subscriptions on sale for the first four months of our subscription campaign. In addition, we developed a pricing strategy that encouraged full package purchases, and new exclusive benefits for full season subscribers, such as the ability to purchase parking in our onsite, underground parking lot. It was a test of timing as a variable--would potential mini-subscribers upgrade to the full season, wait until mini-subscriptions were available or leave Arena Stage entirely.

As we are eight months into our subscription campaign, we have some pretty interesting results:

• we exceeded our projections for full season subscribers both in number of subscribers as well as revenue by almost 60%
• we had three times as many subscribers upgrade their packages when compared to those that downgraded
• full season subscriptions weren't just for renewals and upgrades--we more than tripled our projections for brand new subscribers to Arena Stage at the full season level. At this moment, 11% of our entire subscription base are patrons who have never subscribed to Arena Stage and did so in their first year at the full season level.

As our full season subscribers renew at a much higher rate than our mini-subscribers do, I anticipate that the growth that we have seen in our number of full season subscribers will benefit us for many years to come.