Case Study: For NYC Nightlife Group, Adding Restrictions Increases Deal Profitability

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TLGMerchant: The Lure Group
Market: New York City
Platforms: Foursquare, Yelp, Gilt City, Grouper, Scoutmob, and HowAboutWe
Reach: 10,000 to 15,000 email addresses per venue
Bottom Line: A hyperlocal platform’s ability to drive repeat business is the most important factor that merchants look at when deciding which vendors to work with.

As the marketing director for The Lure Group, the New York City nightlife and entertainment company that manages Beekman Beer Garden, Governor’s Beach Club, Slate, and other major venues, Kelly Bruce isn’t afraid to try new digital platforms on for size. Over the years, she’s worked with dozens of hyperlocal vendors, including Foursquare, Yelp, Gilt City, Grouper, Scoutmob, and HowAboutWe. “We’re doing all these different experience packages to bring in a new audience who might not be familiar with the venues,” said Bruce. “Every couple of weeks, we reach new people.”

What Bruce has found through her experience is that the types of restrictions she places on the deals and offers she runs have a direct effect on profitability. “When we’re just doing a straight discount, we see a much larger number of people redeeming them on the busier weekend nights when we’re already busy,” said Bruce.

Limiting the times and days when deals can be redeemed, or the items that can be purchased with deals (like pool games or specialty drinks) increases the chances that new customers will come in during off-peak times. “If we can do something that encourages the larger group atmosphere, then that tends to be better received.”

Another key to getting deal customers to come back for subsequent visits is to give them something to take away from their experiences. “Whether it’s like: ‘Come back and your drinks are half off,’ or ‘Sign up for our email list, and we’ll send you an offer next week’ … We try to have some sort of follow up, so we can stay in communication,” said Bruce. “We can pretty quickly see if the people who signed up one time unsubscribe immediately, or if they come back and redeem [their offers].”

In her experience, Bruce says check-in offers haven’t always been huge drivers for repeat visits. The Lure Group has run buy-one-get-one check-in deals through Foursquare and Yelp in the past, but found that the customers who redeemed them were more interested in getting free things than coming back and paying full price in the future. “We were seeing quite often that people would [check-in] and then they would tell their friends, and their friends would run to a different bartender and do it,” said Bruce. “Everyone was just looking to get free things, and it wasn’t really that they were encouraged to come back.”

What’s worked far better, for The Lure Group at least, is email marketing. The Lure Group’s largest venues have between 10,000 and 15,000 addresses each in their email databases. Bruce capitalizes on this by sending weekly email newsletters with information about new specials, events, and interesting things that are happening at her venues. “Anything to keep people reminded to come in,” said Bruce.

Although The Lure Group is not heavily invested in mobile (“We were playing around with QR codes at each of our venues to see if people were really scanning them or texting to sign up, but we weren’t getting a lot of response.”) Bruce says she’s looking forward to expanding her use of “experiential” platforms like HowAboutWe and GroupMe in the future. She’s also looking into using ad retargeting as a way to bring new business to her larger events.

The Takeaway
As the marketing director for a large nightlife and entertainment group, Bruce is frequently targeted by hyperlocal vendors. She’s more interested in a platform’s ability to drive repeat business than the technology behind it. Bruce collects email addresses from nearly every customer who comes in as a result of an online promotion, and keeps a close eye on how quickly customers from different vendors unsubscribe from her newsletters. In deciding which vendors to work with on subsequent promotions, she pays close attention to the retention rates of previous deal buyers. The more a vendor can do to ensure its clients continue coming to The Lure Group’s venues even after their deals are through, the higher the chances that Bruce will agree to work with the vendor on subsequent promotions.

Stephanie Miles is an associate editor at Street Fight.

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Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.