Forget Groupon! Start Your Own Discount Coupon Program
Utter the word “Groupon” to many restaurant owners, and the mere mention brings tears to eyes. Some claim the company is up there, with, say Salmonella. According to recent financial news, the coupon company’s stock price is also leaving a bad taste in the mouths of the company’s investors.
As of last week, Groupon’s stock price was down 75 percent since it went public in November 2011 at $20 a share. The stock closed at $4.43 on March 1 -- no surprise to anyone watching the writing on the coupon company’s wall.
The Groupon business model shines on paper: Get restaurant owners and retail service providers to sell coupons at a discounted rate, pass the savings on to a growing group of couponistas, take a major cut of what’s left, and move on. During the company’s glory days a 50 percent discount was mandatory. If a restaurant wanted to offer a $100.00 coupon, they had to sell it for $50.00. On top of that, Groupon kept 60 percent of the sale price. The restaurant would receive $20.00 and have to cover payroll, rent, food costs, and all other expenses for a $100.00 meal. Not a great scenario, even though the basic concept works.
The major problem with Groupon’s model was the pie: the pieces were uneven. Unfortunately, the restaurant owner (the person with most to lose) got the smallest piece of pie -- even though they got a mouthful of promise.
Groupon has proven customers love deals, especially impulse deals. So what are you waiting for? Become your own Groupon. Collect your customers' email addresses, subscribe to or purchase an email program, and start thinking of special deals you can email blast your customers on a regular basis.
Don Burks, owner of Randy’s Steakhouse, has been using the email special deal blast idea since Groupon’s inception. With over 5,000 email addresses, Randy’s social media team creates email specials and blasts them whenever evenings look bleak.
“The Friday afternoon email blast seems to work whenever we use it,” Burks said. “I don’t do it every week, but when we think we can boost the reservation book, we send it out.”
Something as simple as a discount on a petite filet will increase reservations by 50 or 60 people on a Friday night, according to Burks. And he should know. The restaurateur has been operating Randy’s for 15 years but has only been using email advertising for the past five. Each year the activity, addresses, and responses increase with use and exposure, and Burks uses the analytics to finetune his approach and his list.
Yes, Groupon’s business model may have financially surprised a lot of people. But, their core principle of enticing people through email, with a discount, could lead to solid sales.
And that’s where your sales staff, oops, I mean servers comes in.
Send out that email. Train your servers to sell. And sit back and watch sales increase.
