Five years ago, Russ D'Souza and Jack Groetzinger were frustrated.
They wanted a single, convenient website where a user could find the best deals on concert and sports tickets, and it just wasn’t there. So like other entrepreneurs before them who built businesses from nothing, they created SeatGeek.
With $100 million worth of tickets flowing through the ticketing platform in 2013 alone, conventional wisdom says it’s been successful so far. Still, SeatGeek faces the challenge of getting its name out there, so Marcus Lemonis of CNBC’s “The Profit” spoke with the founders about their marketing plan.
How does it work?
First, SeatGeek doesn’t sell tickets.
It culls and lists inventory from all major primary and reseller websites like TicketsNow, eBay and Ticketfly. It then allows buyers to create custom searches based on factors such as seating, price and venue. Its proprietary software, Deal Score, ranks these seats from “amazing to awful,” based on a scale of zero to 100.
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The company makes 8 percent to 10 percent commission off each ticket. Last year, it earned $13 million in revenue, including fees gained from brands advertising on its site.
SeatGeek primarily acquires customers by pushing users to download its app through advertising on such platforms as the mobile apps of Facebook and Twitter. They currently spend $300,000 a month on mobile marketing.
“The net effect of advertising is that we've been able to grow so much faster,” D'Souza said. “We've tripled the business since last year.”
Lemonis agrees that mobile marketing is important, but he wants the founders to generate awareness without spending too much money.
“I would hate to see [them] do any sort of kind of national branding,” he said. “I don't think [they] need to brand. The data and the experience speak for themselves. And so the only way to do that is to create a bit of a following behind it.”
Biz Fix Tip 1: Affinity marketing
One way for a company to spread its name without spending a fortune is through affinity marketing. Lemonis suggests offering an affinity group a co-branded deal and revenue-share plan in order to increase SeatGeek’s name.
He suggests partnering with a value-minded company such as Costco, or any hotel, airline, or car rental rewards program.
Affinity groups store members’ information when they activate; SeatGeek would gain access to those databases, along with the millions of consumers who would likely be interested in event tickets.
“I think the pitch really is, ‘We provide value to your customers so they'll want to use the airlines,’” he said.
Such partnerships with established brands would allow for more targeted marketing tactics and increase name recognition.
It’s been less than two weeks since meeting with Lemonis, but D'Souza and Groetzinger have already started exploring affinity marketing.
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Lemonis also suggests the company partner with a travel site like Expedia so that shoppers can buy event tickets while booking a trip. It’s worth noting that SeatGeek is working on an advertising deal with Orbitz.
Biz Fix Tip 2: Spread your name with logo and tagline
The importance of using a logo and tagline to spread a company’s name may seem obvious, but it’s frequently overlooked.
Lemonis asks the founders to adjust their logo to make it more playful and conspicuous; they could add a pair of glasses to stress that the “geek” is doing all the hard work for users.
As for the company’s current tagline, “Your ticket to every ticket,” he said it didn’t communicate the website’s purpose or tell consumers why they should use it. Furthermore, since the company caters to the different needs of each client, it could use multiple taglines and plant them in different locations for different audiences.
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“Some people care about budget, some people care about impressing somebody, some people care about the experience,” he said. “And so no matter who you are, a family on budget, an ad salesperson trying to land the big account, or whatever it may be, we're the place that can customize what you need.”
Both D'Souza and Groetzinger agree the logo could use some work and will adjust it soon.
Follow The Profit's Marcus Lemonis on Twitter: @marcuslemonis