Should Restaurants Be Using Group Buying Sites?
Opinions and perspectives can be mixed, but generally, many restaurants have jumped on the daily deal site bandwagon to provide their current and potential new clientele with meal deals. Deal sites such as Groupon, Living Social, Kijiji Daily Deals and locally based businesses like Swarm Jam and Smart Betty, allow businesses to provide daily offers to the public. These bargains are available to subscribers based on their location and they change on a daily basis. These deals can be anything from 50% off an entire meal purchase to discounted two-can-dine options. These sites operate through the power of group buying. Each daily deal will become active as long as the number of purchases reaches a certain pre-determined quota. Various methods of promotion such as email, website, social media platforms (Facebook & Twitter) and even mobile apps, provide subscribers with daily deal notifications. Each day these sites offer a new featured deal that is purchased online directly through their websites or mobile apps. Once you have purchased the deal, your voucher/coupon can either be printed or presented via your mobile device at the time of use.
These group buying sites are mutually beneficial to all parties involved in the sense that both the business and customer reap the advantages from the daily deal. It’s an especially unique opportunity for new, small or unadvertised businesses because it allows them to promote their restaurants and persuade new clientele to try their offerings by providing them with a deal that’s hard to turn down. Not all businesses are marketing or social media savvy, so these sites are able to do all of the promoting and advertising, as well as create the media ‘buzz’ needed to sell your deals. Additionally, when you decide to work with daily deal sites, you gain access to their mailing list and members in your particular local market that you could not otherwise obtain on your own. Any restaurant knows that they are only as strong as their customer base. Obtaining new patrons, as well as showing appreciation to their existing ones, is extremely vital to their existence.
Considering that working with these sites is commission based, you want to be certain that you make a positive return on your investment. In order to do so, there are some things to be aware of before you decide to pursue. You must be able to:
1. Turn as many new customers into return patrons.
2. Create a positive experience for customers so it can elicit the spread of positive reviews to others (word of mouth).
3. Handle the increased volume of customers while continually providing the same high level of superior service.
4. Continue to provide your regular and loyal customers with the same level of service they are used to.
Keeping in mind the combination of today’s consumer who frequents restaurants and the low recession-induced spending power, these deals meet the needs of the general public. Individuals and families on a budget or those simply looking to save on their frequent dining habits are given an opportunity to save significantly. Deal sites also make committing to trying a new establishment a lot less risky and therefore reduces the amount of post-purchase dissonance. There is no doubt that a demand for these deal site offerings exists so the response and traffic that a restaurant will receive through participating is promising.
Whether you are a new or established business in need of advertising and a new audience, deal sites might be the answer for you as long as you take into consideration the risks involved and be prepared to overcome them.
MobManager Helps Business Organize, Track and Analyze Daily Deals
When we wrote about Groupon a few weeks ago, we were happy to pass along the concept of preparedness to ensure that any group buying transaction pushes your business forward. In the process of researching, we’ve come across an online tool directed at businesses participating in group buying deals and it’s definitely worth a closer look.
As expected, the group buying industry has seen its fair share of growth recently. It’s no secret that consumers love a good deal and that more people are jumping on the bandwagon to save money. What fails to make news, however, is the industry’s downside. Businesses worldwide are beginning to open up to the concept of group buying and many have already begun experimenting by launching deals in their local area. The problem is that many of these businesses are slowly loosing what seems like a hopeless fight. In order for this industry to survive and continue to thrive in the future, merchants need tools and support to succeed. If the businesses can’t make it work, then there are no deals to be had! Cue the solution.
In June 2010, small business owner David Wachtendonk decided to take Groupon for a spin. At the time, there were no tools available to merchants so they could manage their own deals online. In search of more substance, David pulled together his own team and created some tools to solve his problems.
“I wanted to have more control and these new tools helped me achieve my goals,” said David, “Later on I realized that what I’d created to make my life easier could help other people as well!”
Frustrated with the lack of concern exhibited by popular group buying sites, David and business partner Christopher Lee set out to offer their services to other struggling merchants. And just like that, MobManager was born! Finally, merchants offering group buying discounts had a place to evaluate, analyze and plan for the future to ensure success for their business.
MobManager allows merchants to manage redemption, track ROI and even offers a loyalty feature that lets them follow-up with deal participants. The loyalty feature utilizes permission-based marketing, creating automated, opt-in, drip marketing campaigns. In addition, business managers can get a better understanding of their daily deal campaigns by using MobManager’s dashboards and reporting capabilities to answer questions like, “How much revenue is being generated per customer?” or “Is this daily deal campaign profitable?”
In the future, MobManager hopes to become part of a standard redemption process that will provide customers and merchants with a better experience and, in turn, positively impact the industry itself. Only time will tell if group buying is here to stay but in the meantime, services like MobManager are making the process a lot more painless for merchants that are interested in exploring new territory. To learn more about what services MobManager offers and how they can help your business, be sure to visit their website.
Is Groupon The Right Fit For Your Business?
Coupons are not a new concept. Chances are your family has been saving money for years by cutting out coupons from flyers and as the times changed, printing them from the internet. The truth is, everyone loves to save money and Groupon’s business is built around the public’s desire for a good deal. Group buying has recently become a growing phenomenon. As consumers begin to realize the benefits, businesses are jumping on the bandwagon to offer whatever deals they can.
Each day, Groupon offers a new deal on food, retail merchandise, or experiences in your city. As a user you can purchase these deals online or through their mobile app. Each deal requires a certain number of users to purchase before it “tips” and becomes active. This ensures that businesses participating get the desired minimum amount of users to purchase. Businesses can also set limits in terms of how many coupons are available for purchase, when they expire, how they can be used etc.
The important thing to remember is that while Groupon is a great business with a great concept, it may not be the best fit for you. There are many factors that come into play when organizing a deal through Groupon and as a business, it’s vital that you’re prepared in advanced.
Can You Afford To Offer The Discount?
The first step in determining if Groupon will work for your business is to start crunching some numbers and learning more about how the process works. Upon investigation, businesses will learn that Groupon typically takes 50% of sales. If your business sells 1000 Groupons for $15 each that’s $15,000 in total so Groupon gets $7,500 and you get the other $7,500. If those 1000 people all come into your business and spend exactly $15, you’re left with no other profit whereas those who come in and spend more than the allotted $15, put that money directly into your pocket. It’s very important to figure out how much your business can sacrifice financially in order to really leverage a group buying deal.
How Will You Handle The Traffic?
Are You Prepared To Track Redemptions?
Once your business has made its appearance on Groupon and customers have purchased the deal, it’s your turn to take over the reins. Each Groupon is only redeemable once, so when the barcode is scanned, the customer forfeits the coupon to the business. The process of tracking redemptions can prove very useful. As a business owner it ensures that you’re aware of how many Groupons have been redeemed so you can plan ahead. Tracking Groupon redemptions helps you stay on top of things and ensure the process runs smoothly. What many businesses fail to realize is that tracking these coupons can provide them with loads of interesting information in terms of buying habits. How much did these Groupon customers spend? When did they redeem the coupons? Did they buy any additional as gifts?
Have You Educated Your Staff and Created a Game Plan?
You’re potentially bringing in new customers with Groupon and you want their first impression to be amazing so they’re enticed to return without a coupon in the future. Ensuring that your staff is educated and prepared to handle Groupons can make all the difference. Do you know how the staff will ring up the deal on the cash register? Do your employees know how to properly track the incoming Groupons? There are many bases that beed to be covered to provide the best user experience possible but preparing things in advance and staying organized can help the process run smoothly.
Have You Done Your Research?
Researching Groupon’s services and reading business case studies can really help steer you in the right direction. It’s important to remember that there are many responsibilities and risks involved with group buying deals, as there are with almost any aspect of marketing. At the end of the day, it all comes down to making an informed decision so you can ensure that your business will be prepared to take advantage of everything Groupon has to offer.