The 5 Reasons Why Groupon Like Company's Are Bad For Your Restaurant

Anybody thats thinking of doing a groupon like coupon or feature for your restaurant. PLEASE READ THIS NOTE and understand the 5 problems you will encounter .
1) Deals are discounted 50% off retail price. Example $15 for $30 worth credit. Sounds great but we are giving 50% off of which groupon keeps half of the sale. Business owners are keeping 25% percent of what they normally make on any sale.
2) Attracts the wrong customers for your business. Most restaurants that have done these deals complain that the new customers are just out for the deal and will spend as little as possible to redeem the voucher. You will encounter lower tips and rarely will you turn them into good returning customers.
3)Too many customers to soon. The power of group buying can rally enormous numbers of people to your business. Its good to earn new sales, but the high traffic in a short period can be a recipe for disaster for a business thats not prepared. Man power issues, customers suffering with waiting times or food not coming out quickly. Results can effect your online ratings like yelp and word of mouth by unhappy customers is never good.
4) Lower profit margins, forget about making any profits from customers that buy the deal. Most businesses that feature these deals are lucky to break even. Remember your making 25% of what you normally take in.
5) No customer addresses gained. The single most important thing in the restaurant business is capturing your customers email address.
I agree with this article completely, as i have featured groupon with my restaurant and it was the worst marketing move i have ever done. Pleae understand the problems before you commit to these deals. I would like to point out that these deals are very helpful for companies (insurance, accountants etc) for gaining new clients.

thxs Jeff Killeen "phoenix arcadia business specialist"  Facebook link

Boost Your Clientele's Orders

For most in the restaurant business, the bar plays a disproportionately large role in overall profitability. Beverage sales in casual and tablecloth restaurants nationally average about 25% of gross revenue and account for more than 50% of average net profits. While developing a beverage program that consistently operates at that profitability level is challenging, it becomes much less daunting when you have a better idea of what makes your clientele order certain products and pass on others. Get a handle on that and you’re well on your way to success.
With that in mind, Nightclub & Bar magazine and the VIBE Conference earlier this year commissioned Mike Ginley, co-founder of Connecticut-based Next Level Marketing, to conduct a consumer-research project. Ginley interviewed more than 500 people who frequent casual restaurants and had ordered beverage alcohol on-premise within the past 30 days. What he uncovered in the study about drinking preferences has direct bearing on this subject.
It may come as a surprise, but only 29 percent of the consumers surveyed said they typically know what they’re going to drink before arriving at a bar or restaurant. That means 71 percent of consumers make up their minds after they arrive at a venue. For consumer over 40 years old, 85% reported deciding what to drink just prior to placing their order.
According to Ginley’s research, 90 percent of consumers read drink menus in a bar or restaurant and, 28 percent of them — including a third of survey participants under the age of 40 — use drink menus to decide what to order. More than 80 percent of consumers said drink prices should be listed on menus, followed closely by descriptions (68%), pictures (50%) and listings of the brand-name products used in making the drinks (40%).
On average, 27 percent of consumers said they typically order whatever drink is being featured with special promotions, while 21 percent said they’re influenced by what other people in their group are drinking.
Another significant order influencer is drink promotion within a restaurant’s food menu. Roughly 25% of consumers reported they decided to purchase a specialty drink they saw while pursuing a food menu, which dovetails perfectly with the growing trend of pairing food items with cocktails, wines and beer.
The research also looked at attitudes toward premium brands. Just less than 90 percent of those surveyed strongly agreed that cocktails made with premium brands taste better than those prepared with house brands. When asked how much more they expected to pay for premium products, the consumers said on average $2.42 more for premium beer, $3.19 more for premium wine and an additional $3.20 for a branded cocktail.
Finally, according to the research, the best way to prompt guests to order new drinks is by offering small samples of them. More than half of the respondents said sampling a drink beforehand was most persuasive.
Dynamic in-house marketing is a proven means of driving incremental beverage sales. Why leave money on the table? Promote what you want guests to order and reap the rewards.

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