Article

What to consider before you Groupon

Successful restaurant marketing can increase guest counts, but if your restaurant is unprepared, it also could ruin your brand.

November 14, 2010

By Mark Netsch

Over the last couple years, services such as Groupon have sprouted up offering deep discounts to consumers. Such services boast the ability to get thousands of new customers through the door with one daily ad. What operator doesn't like the sound of an instant expansion to their customer base? But before considering a service like Groupon, it's important that operators ask themselves if they really are Groupon-ready.

For most people, the number one thing that brings them back to a business is customer service. Take customer service out of the equation and it's just another coffee shop, high-end restaurant or bakery cafe. As operators, our job is cultivating customer loyalty – driving a new customer base and bringing current customers back more frequently. Will a Groupon promotion expand your customer base? Maybe.

I recently took advantage of a Groupon offer for a new neighborhood wine bar. Unfortunately, my excitement was short-lived. The server did not know what wines were included in the happy hour specials. A member of our party ordered a drink that was delivered to our table incorrectly. A vegetarian in our party took the server's suggestion to order an entrée without the chicken; the entree arrived with chicken. To top off the experience, our server did not once ask if our meal was to our liking. In the end, the service reflected poorly upon the establishment and was counterproductive to using a Groupon to drive new customers.

"Successfull restaurant marketing -- those tactics that actually increase guest counts and line up first-time guests -- may actually ruin your business and your brand," said William H. Bender, founder of W.H. Bender & Associates "Restaurants must be what we call guest-ready: Ready to wow each and every guest that walks through the door. Unless the restaurant is guest-ready to deliver on all marketing promises and the brand's ServPoints, you will undermine your mission."

Groupon and similar services are indeed a good way to bring in new customers. But before you Groupon ask yourself if you and your team are ready. Here are a few questions to consider:

1. Are you ready for a new crop of potential customers to try your restaurant for the very first time?
2. Are the goals of the promotion communicated to your staff?
3. Will there be a large response and will we be ready for the additional business?
4. What is the strategy for social media impact?

Over the last couple of years, I have heard many restaurants blame the slow economy for a significant drop in their business. While some restaurants have shut their doors, at the same time, others have thrived and even expanded. Operators in-tune with their strengths and weaknesses are always successful, regardless of economic conditions. For those operators, Groupon may translate into new long-term customers and a profitable business.

Look at your business from a guest's perspective before considering services such as Groupon. Make sure your staff is ready to execute your points of differentiation with every guest. If you're a fast casual concept serving gourmet salads, prepare your staff to speak with guests about what makes them unique. If you own a wine bar, help your staff understand that knowing what wines are part of the happy hour special is an expected part of their work. Redeeming 3,000 Groupons at 50 percent off is not the objective, converting those trials to loyal customers is.

Mark Netsch is the founder of PerformanceScope,an organizational performance consulting firm that measurescustomer satisfaction and increases customer loyalty for restaurants. For more information, call 866.941.9005 or visit www.PerformanceScope.com.