How To Double The Value of Groupon Coupon Deals

by Daniel Matalon on April 29, 2011

Groupon, Living Social, Google Offers, Group Deals

I’ve worked with a number of restaurant owners and other local merchant businesses who have been very vocal about all the Groupon-style deals flooding the market. On the one hand, they love the exposure and mass influx they bring. Some of them have even complained to me how much business it flooded them with, which is a nice problem to have. On the other hand, they resent all the margins they are giving up in an already tough economic climate. Some people even say it is permanently depressing the pricing of their market and that clients who buy with coupons are not “good” clients and are only “bargain hunters”.

You can see when you read it in print how bizarre that thinking is. So, I will just say it right out. Most business owners have no idea about marketing. They were never educated about what marketing and sales are even about (or even what distinguishes the two frankly). They know they need to market, though, so they “try” and “hope it happens”. In the old days that meant radio, print, direct mail, handing out flyers, etc. Nowadays it is pressure to build websites (yes more than one of them), optimize Google places, build social media audiences, and all of that. These new media tools all great developments by the way and can easily be incorporated into the weekly activities of a local business just like cleaning out the fridge or washing the floor. In fact, after initial setup, you should be able to feed your social media with no more than an hour a week. But even with that, it is a risk of time and hope it happens kind of thing. So, they turn to the Groupon deals to get foot traffic.

The Basics

But, the simple basic fact is, for restaurants in particular, it has always been about location and word of mouth. Always.  It is just that now, location is not just the corner of Hollywood and Vine but also your online presence(s) where people are “passing by” in cyberspace and the word of mouth is now social mediaized. And with social, as a business owner, you can listen to what your clients are saying about you and even participate in the word of mouth too. (although that’s a whole other article post for another time).

The Real Role of the Group Coupon Deal

So, what does the Groupon deal so for you? It drives both location and word of mouth. It gives you a digital location (Groupon’s) to market from and word of mouth in their audience and community. Its all good. The upside? You pay nothing upfront for it. If the deal does not sell, you still got free promotion in all their venues. If it does, you get booked revenue without any risk. Thats nothing to complain about.The downside? You gave up a whole bunch of margin to get that.

The question is, can you have both free publicity and greater margins? Can you have Groupon’s traffic with the margins you want?

You can bet my answer is yes.

Stategizing The Real Purpose – Conversion, Conversion, Conversion

Since you cannot discount your margins all day long and do Groupon deals every day, then what is the real purpose? Groupon is a “loss leader” style offer to get bodies in the door and get exposure. So, the PURPOSE is to CONVERT those customers into repeat buyers. You know how people say the 1st impression is the most important? Forget that. It is the 2nd impression that counts here. If you don’t get people to come back (and bring their friends) then there may be something wrong with your establishment. So, what’s wrong with coaxing that 2nd impression? How would it be if you had a way to really get people to come back and make more money in the process? Sure, you can stand back and let the food speak for itself but that is a “hope it happens” strategy too. As in “if they like my food, they will be back on their own” type of thing. But ask yourself, how many things have you seen that you tell yourself you will buy “someday” that you have yet to do? We get busy, things get in the way , whatever. So, here is how to ensure they come back and that you make MUCH more money from your offer.

 The Coolest Ever Group Coupon Deal

Remember, when your coupon redeemer audience arrives, they came in for a deal. When would be the best time to entice them to come back? When they remember a week later? Don’t think so. You want to grab them when they are there. So here is how you appeal to their interests, get them to come back and make even more from your Groupon gained entry.

1. Train your servers to approach the client, after they have bought, about getting ANOTHER deal, as good as this one. If you serve, wait until the check is ordered. If it is order and pickup, at the point the food is delivered (not before).

2. Have the server first ask, “Did you like the deal you got today?” “Good”. We are so glad to have you try out our food that we want to encourage you to come back and what my manager has allowed me to do is offer you the very same deal you bought for today AGAIN, just one time.” So if they bought a $10 voucher for $20 of food, they can, again, buy ANOTHER $10 voucher for $20 food, one time only.

3. If they buy it, you just made another cash-upfront deal but did you have to pay the coupon middle man? Nope. They are in your restaurant buying YOUR coupon. Figure that into your margins now.

4. If they refuse, even then, GIVE them a 10% discount coupon ANYWAY. Some of those people will use it to come back and even bring friends. It will give them a good impression that you are eager for their business. Contrary to negative belief that coupons make you look desperate only business owners think that way. Clients just feel thankful for the gift.

5. Make sure you only offer this “double your coupon” offer to your VIP club clients. Don’t have a VIP club? Create one. Even if it is only a  Facebook fan page and a Twitter follow. Tell them they need to like your page and trade an email address and ask for their mobile phone for texting them. But that should not be a penalty either. It should be a bonus that by giving you their contact info, they will get FURTHER coupons occassionally that you never offer elsewhere. Have an iPad right there at the restaurant that they can sign up for the VIP program with, too. (again even if it is only to like your Fanpage but hopefully all of them)

Your Own Coupon Program

If you use this strategy to create a funnel of  customers that become your VIP club members (that you can bring in when times are slow through coupons and special offers of your own) you have just created your own in-house Groupon-style program with your own list. The only thing Groupon has that you don’t have is a LIST. Use their list to create your own and your margins will go way up.

Talk Back To Me

So, given what I just said, do you think Groupon-style coupon deals are good for your business? or not? Login to Comment.

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