For those that are not familiar with Groupon and the similar offering by The Wedding Channel, the premise is straightforward: a local business offers an incredible deal for one day provided enough people are willing to buy into the deal. For instance, a new jeans store can offer a 50% discount on merchandise for the day provided at least 1,000 people sign up. Groupon is a terrific way to get [very] motivated buyers to hear about you, especially if you are a new business with a limited marketing budget.
Many creative businesses, especially photographers, have used Groupon to drive customers to their door. You can read about the experience of one San Francisco photographer, Joey Chandler, here. It is not my place to tell a creative business to use or not use a particular tool if they think it will help their business. However, if the value of your creative business is predicated on you creating art as opposed to the ultimate product delivered, using Groupon is a very risky proposition.
Reducing subjective value (i.e., what you are worth as an artist) to an objective price is a sure way to suck all of the value out of your creative business. The pressure then moves to charge a premium for objective objects to compensate you for all of your work. Only so much you can charge for that bouquet, invitation, sofa or cake.
Groupon works only if you are in the business of selling a set or semi-set product and need volume. In this instance, you have already priced the value of creation at close to zero so anything you get is a bonus. Easily personalized stationary, lithographs, general décor ideas, and even semi-custom design ideas (graphic, interior, even floral) would be good examples.
The issue comes when you confuse the two and put the price on creation when what you are trying to sell is the product. To which, it would have been much better for Joey to highlight the prints/CD’s he was selling rather than the one-hour session he was basically giving away. Perhaps an increasing discount on the number of prints ordered – 50% on the first ten 8×11’s, 70% thereafter up to twenty. Maybe even leave off the session details altogether or at least put them in the fine print.
Customers may understand Groupon and the like are one-time only offers, but if you tell the market that the creation of your art is (virtually) worthless, then that is what they will be willing to pay for it in the future. Placing no value on creation is fine if your creative business is based on product sales; a slow, painful death if it is not.
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I actually did a “Groupon” offer for portrait sessions as well. In Chile it’s actually another company called “ClanDescuento” that I did it through. ClanDescuento does allow you to cap the number of sessions though so I capped my discount offer at 30 sessions in the time span of 1.5 months.
It worked out excellent for me and my creative business. I was referred several full price sessions through it and actually booked a full price wedding as well. I am also priced high enough that even with a 50% discount I was not losing money on each session either. I wasn’t making a lot, but I was making enough that it was profitable for me.
But the reason it ended up being excellent for me and my creative business was really that the ClanDescuento promotion allowed me to meet 30 couples I would’ve never otherwise met and connect with them by photographing them — which in turn pushed my creativity to the absolute limit. I’ve never shot that much in such a short time period and I’ve also never felt like I improved so much in a short time period ever before.
Hi Sean –
Nice to meet you and glad you found my post interesting. I think your overall point here is correct – that the groupon-type deals can be risky for a creative person. But I also think your assessment is a bit one sided. Groupon can be brutal if your don’t think it through but it can also work for you if you do. You just have to really think it through from the beginning to well past the end and work through all of the details. And like many things in the creative world – it really won’t work for lots of people but it might be perfect for you. You just have to think it through.
Joey
once again mr low you got me thinking!
we’re a floral company so it is a little difficult to decide how to make a groupon work and not sell ourselves short, but thanks for the advice. This is definitely something to consider.
Thanks for sharing. This would work great for one of our clients.