How to use Groupon, Scoopon, Spreets and other Coupon Businesses to build your Restaurant, Cafe and Take Out business

Many restaurants and other businesses have run into troubles  with Coupon marketing campaigns.  There are a number of things that can go wrong with a Groupon campaign, but if you do need to run one, we’ve got a couple of tips to help you get the most out of it.  Groupon campaigns can be great at finding you a whole new group of customers that can experience your fine food and can also create that elusive buzz.  When people walk down the street and see your restaurant busy on a Tuesday night and the competition quiet, obviously they are more likely to eat at your restaurant.

What can go wrong?

Some of the campaigns can be uncapped, so you don’t know how many people are going to turn up.  The cupcake shop story clearly illustrates what can happen when you have far too many customers to be able to provide a decent amount of service at an economic rate.

These campaigns can bring the wrong kind of customer to your business.  Often they are chasing a cheap meal, not looking for a new great place to eat.  With the heavy discount they receive many are programmed to look for the next great bargain, and will rarely return.

Scoopon and Groupon and other coupon campaigns can bring in too many customers at the wrong time.  The last thing that you want to be doing is turning away full fee paying customers on a Friday or Saturday night because the restaurant is full with people who are paying deeply discounted prices.

Running Groupon campaigns too often will get the word out that you are regularly discounting.  The last thing that you want is for your regular customers to learn that they don’t need to pay full price and can just buy a coupon.  That brand destruction can be very difficult to recover from.

Best Practice tips to run a good Coupon marketing campaign

Try to limit the number of coupons that can be bought.  There is nothing worse than having too many customers coming into your restaurant at a heavily discounted price.  The level of service falls and they don’t enjoy the experience, making it unlikely that they will return.  Even worse, your full fee paying customers won’t enjoy their meal either.  This is a very bad scenario, because not only are you providing new customers with a bad experience, but you are also upsetting regular customers.

With each and every Scoopon, Groupon or Livingsocial customer that comes in, try to get their details.  They may be just following what is this weeks ‘hot deal’, but if you provide them with the best possible experience, you may be able to win them over as a repeat customer.  This is the real goal of a Coupon offer for your restaurant.  Whether it is a feedback forms that your servers provide the customers, or maybe you can give each customer an iPad or a tablet so that you can get their feedback and contact details to go to your website and feed in the information directly into your database.  It is very important to grab as much detail about every customer as possible so that you can repeat market to them.  You can even get them to check in and like you on Facebook.  If you grab their birthdates, you can run a birthday campaign.

Try to use the coupons to build your business when you need it.  Most restaurants, cafes and take outs struggle to find enough customers on Monday and Tuesday nights, and some struggle on Wednesday too.  These are the nights that you should be limiting the coupons to.

One way to increase the value of the customers that come in with a coupon is with the value adds.  Do they want dessert, do they want a glass of house red or do they want something else that isn’t covered by the coupon.  These upsells can dramatically decrease the drop in gross margin that you will experience if everyone comes in, uses their coupon and leaves.

Coupon campaigns:

So there you have it – Coupon campaigns may work for you, but there are definitely risks that need to be managed.  By limiting the number of coupons that can be sold, by limiting when they can be redeemed and by capturing contact details of every coupon customer, you can create value that may just offset the amount of value you give away.  And don’t forget the upsell opportunities.

Action Points:

Limit your deals to your quieter nights.

Ensure you capture contact details for as many customers as possible.

Create deals that lend themselves to upsells.

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Too many times we see customers with websites that are costing restaurants thousands of dollars every month through poor design, poor messaging and poor SEO. If your website could be improved to bring in 200 extra visits per month and just 10% of those made a booking, and each booking was for 2.5 seats on average at $50 a seat, you would have an extra $2,500 in revenue a month. A 30% food cost, that is $1,750 in profit extra a month. This ignores those customers coming back as regulars – which is more profit.

Remember, if these customers aren’t finding your Restaurant, they are finding your competitors.

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