When Groupon may be useless if you run a food business?

Groupon is a very well known multinational company who bases their business of selling vouchers at a discounted price. Those vouchers can be then redeemed for a service or goods from their related partners such as restaurants, takeaway, pizzeria.

The main reason as a business to join Groupon and offers a discounted price is usually because the business’s revenue is lowered, having fewer customers. So here the main idea is to drive customers to the business location.

One practical example can be a restaurant in Dublin, where in the last 3 months lost customers. The restaurant offers a set menu at a 60% discount compared with the normal price. Is it the solution to gain new customers? To consider also that usually, the restaurant not only has to reduce the price but also they have to pay a commission for each voucher sold on Groupon platform.

When Groupon may be useless for your business?

A first mistake that a business does is thinking that driving customers and offering a cheaper set menu, would mend the loss of revenue. Instead, a business should understand first why they are losing customers. Getting back to our restaurant it could emerge that:

  • Food is not compelling
  • Staff is not friendly or prompt in serving the customer
  • The chef is not suitable for that restaurant (too slow or too distracted in preparing the food)
  • Cleanliness of the location is not enough
  • Place too noisy
  • Wrong customers (too young, families, singles, couples, etc)

You got the point. If for example, the service or the food was not above the standard, customers wouldn’t come back again. So even if you drive new customers with a 50% discount on the menu, they will just eat once and then won’t be back.

What can be worse than that?

In the case of bad service or bad food, a business may risk also to get a negative review on Google Maps, TrustPilot, Facebook etc. So in practice, a business pays a commission to get a bad review. Crazy isn’t it?

So, What to do before creating a campaign on Groupon if you are a business?

It is very important that you do your own homework and you study why your customers are leaving and not coming back. Assess every “moment of truth” in your business (touchpoints where the customer interacts with your business). Don’t be afraid to talk to your customers, asking them what can be improved, rather than asking if “Everything is ok?”. Go online and search for your business name. See if there are reviews where you can get insights. Either you see a bad or good review, take it as a point for improvement or strength. “Fix” everything as much as possible. Again, ask your customers or create survey cards where customers can write on it and leave it at the table or put into a box. It is priceless when you start getting vital information. Sometimes we think we are doing all well, but in reality, in the eye of the customer, we are missing something. Once your business ticks all the boxes, you then are ready to use Groupon to nurture new customers. Next step will be to let them return to your place.

From one-off purchase to loyal customers

You have now the chance to convert all your new clients into potential loyal customers. How to do it? Imagine again, you are a restaurant. First of all, engage with them, chat with them, let them know you, let them listen to your story. Transform their experience into a personal journey you share with them. They want to be entertained, they want to be happy, not just eating food. Give them happiness, the best experience.

Another trick up your sleeve, create a special promotion for all your new customers. Once they register on Groupon they will leave their email address. While they make a reservation online they will leave their phone number. There are several ways to send them a special promo. By email or by SMS. Let them feel special.

If all is done according to plan, they will be more than happy to leave a positive review online and also recommend to their friends and come back.

If you are a restaurant owner and you would like to chat with me about marketing strategy for your business, you can contact me using this form or reaching me on LinkedIn.

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