Its a Groupon, Groupon, Groupon World
July 26th, 2010
Well, the Groupon “thing” is firmly in place, like it or not. If you’re a small business, you might like it quite a bit – getting butts in seats and all that. How does it work? Who makes money? TechCrunch did a fantastic analysis a few months ago.
But if you are a small business and/or restaurant with an upscale target market and a really polished image, it might not be the best thing for you, especially if you’ve opened recently. Google for “groupon sucks” and the #1 hit you will see is a blog post from a spa marketing company talking about how discounting is not always the best way to attract new customers. It is certainly food for thought and a great post, but targeted at “luxury” goods like hundred-dollar treatments and the like.
What if your per-check average is well under $20? Is it such a bad idea to discount, then?
A friend just told me that they were hesitant to try a local restaurant because it always looks empty. I know for a fact that the restaurant‘s food is quite good and told him so. They have a dining room too big for their needs and that hurts them with walk-by traffic, as my friend’s perception shows. This place might benefit from a quick-and-dirty campaign to get more people in the door. Or perhaps you can skip giving half the money to Groupon and just go to the restaurant. Do we have a deal? Good. Also try out another local place experimenting with Groupon – but just go instead of buying the coupon. Their sandwiches are amazing.
Oh yeah. It’s pretty much Marketing 101 that discounting does nothing to build brand loyalty and can totally hurt it instead. With an upscale market, individual offers that make the person feel as if they’ve been personally singled out are good, ads on websites, coupons, and other mass market couponing is very bad.
Comment by sophie — July 26, 2010 @ 4:46 pm
I totally agree with the cube comment. That place rocks. As for Groupon, I signed up for the notices, but I have yet to buy in. I almost did the other day when The Barley Room came up in the rotation. $25.00 worth of pub fare for $10.00 or something like that. I also buy an Entertainment Book every year and use about half of the fine dining deals.
I’ll print out web coupons as well. Example, I print Buffalo Wild Wings coupons all the time.
Another plug for a great restaurant that I’d like to see more people visit (so they don’t close down!!) is Tickles and Snooks Wings ‘n Things. See this link for a review… http://nmgastronome.com/blog/?p=7584
I’ll take sophie’s word for the discounting/marketing thing, but I like me a good coupon.
Comment by RonDaBomb — July 27, 2010 @ 1:51 pm
The same newspaper that offered the critique of Groupon is the same newspaper that just offered 50% the delivery of its Sunday newspaper.
In this economy, smart consumers are NOT willing to pay full price with restaurants, especially those that took SUBSTANTIAL price increases in the 2007-2008 timeframe.
Comment by jlawrence01 — August 1, 2010 @ 9:44 am
people are stupid
Comment by david michel — August 24, 2010 @ 6:05 am