Groupon for restaurants – discount vs. marketing?

Restaurant marketing with Groupon
By Donna Dooher
December 17, 2010

 

Over the past several months, the word ‘Groupon’ has been popping up in numerous conversations, particularly with my staff whose ages range from 21 to 35.

So what is Groupon? My curiosity really peaked when one of our regular guests, a subscriber and big fan, mentioned the concept. Groupon is a marketing initiative fuelled by group buying, where the onus is placed on its subscribers to utilize social media, generating buying deals. The deal kicks in once enough people purchase the daily Groupon and encourage friends to purchase an impressive deal (often 50 per cent off the cost of a gift certificate). 

 
Groupon boasts a subscriber list of 320,000 in the Greater Toronto Area alone and  is offered across Canada and the United States, with its roots in Chicago. The Website allows a localized listing, by city, of each of its deals. I immediately signed up and started following the daily offerings for the Toronto area. As I was planning to travel over the winter holidays, I added a couple of cities near where I would be staying to my Groupon profile. So every morning, offers from Toronto, Tampa, Miami and New York ranging from spa services, tickets to shows, dining experiences, outdoor activities and retail shopping popped up in my inbox. (I could also opt for the phone app to speed up the purchase and redemption process.)

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As a subscriber, it was a no-brainer. But what would be the benefit of becoming a Groupon merchant? Our goal at Mildred’s Temple Kitchen has been to introduce a new demographic to a re-branded restaurant that’s been around for nearly 20 years and to turn these customers into loyal guests. Was Groupon the right way to go? It appeared that it could be a costly game to involve my restaurant in. I sourced out a variety of businesses who had already taken part in the Groupon experience. There were enough positive responses to give me the push to contact the Groupon team.

The sales reps from Chicago did an amazing job explaining how Groupon works, how it could benefit my business, and how they set themselves apart from other group discount offers. This was important for me as I was discovering more and more group buying concepts in the marketplace. What really clinched the deal was the data we would potentially collect by participating. After signing on, our rep worked diligently with us, establishing what our offer should look like, what parameters we should place around the offer, who our target audience would be, and when the offer would run. He also provided support in how to train our staff with the redemption process, manage the influx of business and track performance on average cheques and gratuities while building guest loyalty. Our offer went live on a Thursday night at midnight and ran all day Friday, Saturday and Sunday. During that time, I was able to monitor the sales penetration and the demographic of the purchaser. Up until then, we had explored many traditional marketing routes, but the Groupon offer took us directly to the target group we were looking for.

In the end, we sold over 2,500 Groupons, and according to the guys in Chicago, that’s a pretty good turnout. We now have people steadily coming through the door, ready to use their Groupons. For many, it’s the first time they’re experiencing Mildred’s Temple Kitchen, though a lot of our regular guests also took advantage of the additional savings. It’s a long term investment in which we’re confident we’re going to see a payout, but I also see this experience as a taste of what’s to come in the world of online shopping. 


About the Author: 

Donna Dooher is Executive Chef/Proprietor of Mildred’s Temple Kitchen in Toronto, Ontario.

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