Just last month, crowd source coupon king, Groupon, turned down an offer from Google for $6 billion. While Groupon has chosen to keep mum on the reasons they chose to forgo the offer, the motion made one thing clear: the crowd source coupon is big, big business. With Groupon imitators sprouting almost daily, it seems that not a day is passing without hearing about the next Groupon, Living Social, Seize the Deal or other offer being discussed.
With all this chatter, it can be easy to get swept up in the action and sign on to present a crowd source offer of your own. While we gnaw on reports of these offers at their best (the Gap’s $11 million dollar day) also as frequent and publicized are these coupons at their worst (47 separate checks with coupons limited to 1 per table?) Oy.
What’s a restaurant owner or manager to do?
Educate thyself.
Purchasing and promoting a crowd source coupon deal takes planning and careful consideration. If you’re new to the concept you may be asking yourself how this all works. It’s a fairly easy concept, that the power to purchase as a group is stronger than the individual. To harness this power, the crowd source coupon retailer works with business owners to present a special offer (usually 50 to 90% off regular retail prices). The business then sets a minimum number of purchases to honor the deal, and a maximum number of the special offers available (think 25 to secure the deal, 100 max). The coupon retailer then promotes the deal, and once it is seized, collects and processes payment for the deal. Consumers then print coupons which they will use in the establishment as they would cash.
Think about true cost.
These offers aren’t cheap (well for the owner at least). In addition to eating the dramatic markdown, the owner/operator will owe the facilitator of the coupon offer an additional slice of the profits. Cost varies dependant upon the retailer, and is usually a percentage of the coupons sold. Reports vary on the exact amount, but most everyone agrees: don’t run a coupon to make money from the coupon. It just won’t happen.
In addition to costs associated with offering and promoting your deal, any business or retailer is likely to incur additional costs in facilitation of the deal at their establishment. Training staff, increase in staffing expenses incurred in preparing for a surge in business, and additional advertising and promotion expenses will often be incurred as well. And though not a direct influence on owners/managers, many restaurant retailers have reported that use of crowd source coupon services translates in a dramatic reduction in tips paid to restaurant staff.
To coupon or not to coupon?
It’s not difficult to see that all this may have you running for cover from ever offering a crowd source coupon deal, but you may not want to run off so fast. Reports of successful use of crowd source coupons offers are out there. And when it works, it works incredibly well. Getting the most for your coupon monies takes time. To make it work for you research what is working in your area, and place thoughtful consideration of what you are hoping to achieve in your coupon offer. Most past coupon users agree , the narrower or more specific goal of the coupon use, the better. Instead of generic aspirations of “doing more business” and offers of 50% of total receipt offers, consider instead niche offers designed to draw attention to new or underutilized offerings at your restaurant. Offering the deal for to-go or delivery orders to highlight that new or failing service; discounts on desserts or wine; or even planned menu deals to promote ordering desserts and appetizers all garner positive reports.
At MenuTrinfo, we care about your business. That’s why we go out of our way to help identify new technologies to help your restaurant succeed. If you’re ready to serve your customers better with menu nutrition information labeling, we’d love to talk with you. Call or email us and we’ll get started today.
What’s a restaurant owner or manager to do?
Educate thyself.
Purchasing and promoting a crowd source coupon deal takes planning and careful consideration. If you’re new to the concept you may be asking yourself how this all works. It’s a fairly easy concept, that the power to purchase as a group is stronger than the individual. To harness this power, the crowd source coupon retailer works with business owners to present a special offer (usually 50 to 90% off regular retail prices). The business then sets a minimum number of purchases to honor the deal, and a maximum number of the special offers available (think 25 to secure the deal, 100 max). The coupon retailer then promotes the deal, and once it is seized, collects and processes payment for the deal. Consumers then print coupons which they will use in the establishment as they would cash.
Think about true cost.
These offers aren’t cheap (well for the owner at least). In addition to eating the dramatic markdown, the owner/operator will owe the facilitator of the coupon offer an additional slice of the profits. Cost varies dependant upon the retailer, and is usually a percentage of the coupons sold. Reports vary on the exact amount, but most everyone agrees: don’t run a coupon to make money from the coupon. It just won’t happen.
In addition to costs associated with offering and promoting your deal, any business or retailer is likely to incur additional costs in facilitation of the deal at their establishment. Training staff, increase in staffing expenses incurred in preparing for a surge in business, and additional advertising and promotion expenses will often be incurred as well. And though not a direct influence on owners/managers, many restaurant retailers have reported that use of crowd source coupon services translates in a dramatic reduction in tips paid to restaurant staff.
To coupon or not to coupon?
It’s not difficult to see that all this may have you running for cover from ever offering a crowd source coupon deal, but you may not want to run off so fast. Reports of successful use of crowd source coupons offers are out there. And when it works, it works incredibly well. Getting the most for your coupon monies takes time. To make it work for you research what is working in your area, and place thoughtful consideration of what you are hoping to achieve in your coupon offer. Most past coupon users agree , the narrower or more specific goal of the coupon use, the better. Instead of generic aspirations of “doing more business” and offers of 50% of total receipt offers, consider instead niche offers designed to draw attention to new or underutilized offerings at your restaurant. Offering the deal for to-go or delivery orders to highlight that new or failing service; discounts on desserts or wine; or even planned menu deals to promote ordering desserts and appetizers all garner positive reports.
At MenuTrinfo, we care about your business. That’s why we go out of our way to help identify new technologies to help your restaurant succeed. If you’re ready to serve your customers better with menu nutrition information labeling, we’d love to talk with you. Call or email us and we’ll get started today.
