Are social buying websites right for your company?
If you live in a populous area, chances are you have heard of social buying websites like Groupon and Living Social. (For those of you who aren’t on the up and up, these are online companies that negotiate saving opportunities with local businesses and offer a deal daily in your area.) Restaurants make up a large percentage of businesses participating in this trend and I am often asked if this is a good marketing tactic. My answer is yes…and no, it all depends on your food operation and what your expectations are.
Here are a few items to take into account before you decide if daily deal sites are right for your restaurant.
Exposure is everything. Social buying sites are a great form of non-traditional advertising. If your goal is to gain exposure in your community and get consumers to give you a shot, than I highly encourage your business to give it a go. Just make sure their experience is a good one, so they keep coming back for more – without a coupon.
Know what you’re getting into. Bottom line, you will be busy the duration of the offer, significantly more so at the beginning and at the end of the offer. Success after the promotion relies on the customers’ experience and if you are not equipped to handle the influx of customers that are bound to be attracted by a Groupon, than online couponing may do more harm than good.
Make sure your offer is right. You want your offer to seem like a great deal and also reflect your menu price points. For example, don’t offer a $15 Groupon for $7 if most of your menu items cost around $10. You also may want to look into adding restrictions, such as not offering the deal on high traffic holidays or during happy hour.
Be realistic about your expectations. The most popular offers are usually discounted at 50% or more, so business should prepare themselves that they might not see their revenues skyrocket…in the short term. The key is to get customers to spend more than the amount of their coupon during their visit and to maintain them as customer in the long run. If you can achieve both of these, then I guarantee you will see revenue growth.