Hang on a second. Lemme pull up my deal…
Websites such as Groupon and local outfit Asheville Deal offer patrons an opportunity to try out, at a discounted rate, restaurants they might not otherwise venture into.
I sometimes sneak a peek at these sites when funds are scarce, and I’ve discovered some fresh favorites along the way. It’s obvious what’s in it for diners, but why do successful local establishments opt to take part in these programs?
To gain some answers, I spoke with Brigitte Ruckle, marketing consultant for the Asheville Radio Group and the life force behind the popular ashevilledeal.com.
“For some, it might be a last-ditch effort to try to get more business, and if they don’t, they just close their doors,” says Ruckle. “I tell them, ‘If your product or service is good, then your business should see some amazing results; but if it’s not, then it will shut it down faster than anything.'” She attributes this to the power of word-of-mouth in this town. People will scramble to catch a discount if they hear positive reviews — but bad news spreads like wildfire.
That approach has worked for Zia Taqueria owner Robert Tipsword. “They say it takes three to four years for everybody in the area to realize that your business exists, and this is kind of a way to push that time span forward a little more,” he observes. “My experience with Asheville Deal has been very positive, in the sense that it has given me access to different demographics around the Asheville area that maybe would not have been exposed to us.”
The main difference between Asheville Deal and Groupon seems to be their clientele. Groupon is used by both locals and vacationers who want to hunt up some discounted grub while in town. The Asheville Deal website primarily serves area residents. “With Asheville Deal, we get commercial time as well as a following of locals, as opposed to people out of town coming in,” says Sam Ragland, co-owner of Moe’s Original Bar B Que.
And while some restaurant employees mention “Groupon groupies” who won’t come in unless they have a coupon in hand, most successful restaurants say they do see an increase in repeat business. For eateries with low visibility, these coupons reach folks who might otherwise not know they exist.
“Groupon has been very beneficial for us. We are in the back corner of a little strip mall, and it’s kind of hard to see us from the street,” says Laura Polk, the manager of Bandidos Latin Kitchen. “Groupon was able to get us new customers from different areas of Asheville. Most of them will be repeat customers: A lot of the Groupon-ers have come back multiple times,” she reports.
These sites offer a unique approach to marketing. Rather than incurring advertising costs upfront, Asheville Deal and Groupon enable businesses to reel in customers simply by offering discounted meals. “There’s no money out of pocket for the merchant,” notes Ruckle. “Their only investment is when somebody brings in the gift certificate.
In addition to email blasts, Asheville Deal records custom-tailored commercials that are broadcast on all five stations in the Asheville Radio Group, which owns the deal site. “I personally worked with Brigitte Ruckle at the radio station,” Tipsword explains. “I really like radio, and I like the fact that when I do the Asheville Deal, I get to go in and do a chef spotlight with them. I actually go into the radio station, and they interview me and we talk about the food, and this goes out to all the radio stations and hits a bigger demographic than what’s on their email lists.”
Proprietors also seem to appreciate the opportunity to showcase their food to those who might not otherwise be able to afford a night out. “It gives the community a break. With gas prices going up over the summer for the past few years, we feel that the community needs something,” says Mike Iannucci, owner of Iannucci’s Pizzeria.
Many other area restaurants have also participated in either Asheville Deal or Groupon, including Dickey’s Barbecue Pit, Blue Ridge Biscuit Co., Blue Sky Café, Cinnamon Kitchen, Mojo Kitchen & Lounge, Roly Poly Sandwiches, Cafe Kathmandu, Jerusalem Garden Cafe, Rocky’s Hot Chicken Shack, Lexington Avenue Brewery, Neo, Asheville Sandwich Co. and King James Public House.
Man does this “peek” behind the scenes read like an ad.
Here’s the reality for most businesses which try this approach. Groupon takes 1/2 of the $ AFTER the 50%. That means you keep 25% which doesn’t cover the marginal cost of the product.
The repeat business is very modest in most instances. Most businesses do these deals once, if they do the first one.
Didn’t it seem odd the author found not business dissatisfied with the promotion? That should tell you all you need to know.
Ashe Villager-
Thank you for taking the time to read the story. The truth is that I did not receive any negative feedback about either of these two businesses while interviewing local restaurant owners – I did not go into any interviews knowing whether or not said restaurant owner was satisfied with their experience with Groupon or Asheville Deal.
I am sure that there are some who are dissatisfied with these services, but the impression that I got was that most restaurants go into this knowing that they are going to have to give away “basically free” food in exchange for advertising, and are comfortable with this arrangement.
Businesses may only get 25% of the income from these coupons but as far as Asheville Deal is concerned, the amount of advertising space for the commercials for 5 stations all day amounts to thousands of dollars. Imagine paying for 1 days worth of commercials through 5 popular station and getting all that for free. This seems like a win-win to me.
Capitalism is everyone trying to cut into your profits. In this case not only “the competition” but marketers creating “scabs”