Our answer is YES for most restaurants.   

With Groupon and many local clones out there the basic idea is that if you get someone to come into your restaurant one time for half off or better, you will have a good chance at getting them to come back. That sounds like a good idea, and I’m sure you heard that right from your Groupon rep but . . .

 

 

What's the downside of using Groupon coupons?

 

Reality check, you're going to lose money on the first visit. Your only real hope of making money is to get the person to come back again and dine with you closer to full fare.

 

Please bear in mind that people who are signed up with Groupon get a different half-off coupon offer emailed to them every day.   And as a result Groupon has developed in a way, their own cult following. In other words, the cult gets more half-off restaurant offers than they can use or for that matter buy.

 

Here’s a sad reality.  When I was sitting with a client just two weeks ago, the owner just informed me of the Groupon offer that she decided to do.  While we were working on some details we were interrupted by a server who had a gentleman on the line. He wanted to know if he could use his $15 coupon for two separate meals.

 

This is what I got from this call.  In this case the caller was so cheap, he wanted to know if he could come eat twice in this restaurant for the 7 dollar investment, not bring a friend or even buy a drink cause he wanted to take full advantage of his $7 purchase and not spend one more red cent in this restaurant than possible.

 

Don’t believe me?  Sign up for Groupon and see how many repeat customers it drives to your place.  Or better yet, see how many of your regulars buy a Groupon and help you lose money.  Regulars that normally pay full price once or twice a week.

 

Now just so you know this is not isolated.  Last night I was visiting with a Day Spa Tanning salon and they shared the same story. After just two months they were done.  They were able to upsell some of the customers that came in and make ‘some’ money, but these coupon users proved to be one time visits and  couldn’t be converted from  the penny pinching Groupon Cult to regular paying repeat customers.

 

With all this said the reality is the next time a grouponer decides to go out to eat, why would they want to come back to your restaurant and pay full price when they have many more half-off offers from other restaurants?

 

Now you see the problem. Groupon users are basically (good) people looking for discounts and they will jump from one discount to the next.

 

If you want to learn how you can make money from Groupon visitors to your restaurant e-mail me for a free report.  I’ll send you (as soon as it’s finished) FREE report on how you can convert them to regular customers and win them back so you don’t have to lose any more money from them.