A fun center recently tried Groupon to spur awareness with Groupon subscribers in two markets—Vancouver (about an hour’s drive west from the facility), and its local market of Abbotsford, B.C.
Castle Fun Park is just under 50 miles east of Vancouver. It has three themed miniature golf courses—one outside and two inside—go karts, indoor driving range and batting cages, shooting gallery, bowling alley, and an extensive game-playing area over two floors. It appeals mostly to the teen+ and family crowd, although it does hold its fair share of birthday parties for the younger age group.
Castle Fun Park has only tried Groupon once, but Brandon Bahris, Director of Operations, had some interesting insight into using the social coupon service.
Q) What made you decide to use Groupon vs. other social deal providers such as LivingSocial or Daily Deal?
A) The market share that Groupon commands vastly outreaches the competition.
Q) Is there a minimum buy for the offer?
A) The minimum, or tipping point, is part of their setup and is merchant-determined (for some businesses I understand the strategy, but for us it was a trivial detail: We set for 25 and sold 3200).
Q) Did you get paid right away?
A) We received our first cheque a month after the offer ended and are slated to receive two more cheques equally spaced apart.
Q) How long did it take to negotiate the deal with Groupon?
A) Groupon had been contacting us from the onset of their integration into the Fraser Valley. We declined their requests for several months until the timing on our side was appropriate. When we agreed to work with Groupon the timeline from discussion through to launch was about a week.
Q) Did you request a target audience you wanted to reach with Groupon, or does the deal automatically go out to everyone registered for Groupon in the Fraser Valley (i.e. your business’s geographic region)?
A) As with all business transactions, the more you sell or are anticipated to sell, the more leverage you can wield. We did request a target audience (Vancouver) outside of the default region you are assigned to, based on physical location, and this was granted based on sales expectations.
Q) How did the deal—a $50 value gameplay card for $25—perform?
A) We sold just below 3,200 deals between the Abbotsford and Vancouver offers which ran in parallel. It was quite accurate to our forecast but far greater than what Groupon expected. For us it was very much a success from a marketing perspective, as our brand was showcased to over 300,000 Vancouver Groupon subscribers, and over 60,000 Abbotsford (local) subscribers.
Q) Did Groupon provide you with any reporting, or buyers’ email addresses?
A) Some reporting is provided, but not of course, emails for privacy issues.
Q) Has Groupon, as a promotional tool, replaced any of your fun center’s other marketing or advertising?
Q) How is Groupon compensated?
A) Groupon takes more than the 25% most people think—the credit/ debit processing fees are also subtracted, further reducing the merchant’s payment by about 2%. Most participants are aware that it is generally a break- even or marginal loss campaign initially. For most businesses they accept the reality that Groupon is not for growing immediate sales, but rather is the cost of advertising to market that may be out of reach. How much that’s worth is up to the business. For us the overhead is very minimal and therefore ours is the perfect business to utilize Groupon
Q) Will you use Groupon again?
A) As our sales volume is heavily influenced by the school season, it would not be advantageous to run this style of campaign during the prime school vacation periods. Oversaturation and product devaluation need to be strongly factored in as well. We certainly may team up with Groupon during the off season again (with a different offer), but not for while.
Q) What advice do you have for other fun centers considering using Groupon?
A) Ask them many questions and become well-versed in all possible scenarios concerning Groupon redemption—and get a few scanning devices ready prior to launch!