Groupon Best Practices In Restaurant Marketing

A couple of years ago, a new word was entered our lives: Groupon. This great organization came seemingly from nowhere and created an entire new industry.

Andrew Mason, the founder of Groupon, has produced a very profitable business model. Groupon sure does know how to earn money for themselves.

Now let's see, does it or does it not make sense for your restaurant to participate in the "daily deals" campaigns?

Let's look into how Groupon-style campaigns work.

You offer a number of gift certificates redeemable at your restaurant at a considerable discount (usually around 50%). The offer becomes valid only if the target number of certificates sold has been reached. The dollars your campaign generates is then shared between you and the vendor (Groupon or one of their competitors).

Many don't bother to read the terms and attempt to combine the coupon with other promotions or discounts you may have going on that day.

Several restaurant owners commented that these customers tend to not tip a lot or not tip at all and are on a lookout for a "gotcha" even when you offer the same food and level of service as you normally do. What's worse, not that many of these people visit your restaurant again.

When you plan a marketing campaign around a daily deal, you need to be prepared. Yes it's nice to have a lot of new guests to come in and discover your restaurant for the first time. You, however, must make sure have a plan about how to generate profits and how to get these people to return after their first visit.

Train your employees on how to work with coupon holders. Add first-time guests to join your newsletter, VIP club, birthday club or other type of customer loyalty program you may have set up. Instruct your waiters how to take guests' contact information table-side. Consider some rules to your POS system to automatically include the tip into the check.

Offer Groupon deals only on days and hours when your restaurant is slow and only on the items that offer you a high profit contribution margin. Your food cost is probably anywhere from 28 to 36% of the menu price. Given that you only get 25% of the value from Groupon, you are almost guaranteed to lose money on this marketing campaign, even if some of the coupons don't get claimed.

Keep in mind: Each coupon customer that visits your restaurant puts you further in the red unless you do something to drive more add-on and repeat sales.

Article Source: Article Alley

Need Help Marketing Your Restaurant?

Breakaway Creative can help. We are a full service design company located in Phoenix, Arizona, offering branding, web, and graphic design services to growing companies, start-ups, and restaurants. From complete identity packages, to websites, to one-off pieces and anything in between, at Breakaway we consistently deliver unique marketing solutions that enable our customers to grow their businesses.

For more information or getting started with Groupon or any of our services please contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it .