By Noelle Munaretto
Clipping coupons used to be a tedious process. First you sorted through the flyers, then you cut away the ones you wanted, then you organized them by expiration date and stockpiled them clumsily in a wallet for when the perfect time arose. Today, thankfully, the coupon trend is taking a new shape. This virtual coupon revival is changing the traditional marketing game – by offering local businesses a different and dynamic method of spreading their message, and by catching the eye of discerning consumers.
Groupon, one of the most developed couponing websites, offers online daily deals to people in cities across North America, giving users unique goods and services at high discounts. Combined with cross promotions of the deals through social media networks such as Facebook and Twitter, word spreads quickly. It’s giving the consumer something they want at price they can’t beat, and the enticement to check back daily to see what deal will be featured next. It’s giving merchants across the province the opportunity to capture lifelong supporters and make them brand believers. And, most importantly, it’s got restaurateurs and culinary shops in Ontario abuzz about how online couponing can revitalize their customer base.
“I first heard about it through some business owners on our street at the BIA meeting,” said Kathleen Mackintosh of the locavore food shop The Culinarium. “There was a spa and a restaurant on that same committee who had used it. Then I decided to log on and was impressed with how easy it was from a customer point of view.”
Whether it’s up to 89 per cent off laser hair removal services, or $25 for $50 of merchandise at American Apparel, Groupon’s deals apply to a myriad of customers. It offers them something they want at a price they can’t beat – something Mackintosh said firmed up her decision to look into partnering with Groupon for a Culinarium deal.
“What really appeals to the consumer is that if you’re looking and interested, you can get a great discount,” said Mackintosh. “You feel that there’s value to the deal and that the deal is great. It’s not noise. It’s targeting interesting things. The companies they choose are unique and interesting and sometimes on the smaller side.”
After liaising with a company representative in Chicago, Mackintosh found the Groupon proposition interesting. Turns out Groupon also took interest in Mackintosh.
“It happened that their rep was in Toronto for meetings,” said Mackintosh. “So she came by to the store. We talked about what she thought would work for our space and our size and what we offer.”
Mackintosh and Groupon worked out a deal to offer buyers $15 for $30 worth of local gourmet groceries.
When the deal launched online on Dec 13, 2010, within the 48 hours the Groupon was active, Mackintosh sold 1,647 vouchers. Mackintosh says the volume of business generated through the deal more than made up for the fee she in turn paid to Groupon for their marketing services.
Four days after the sale ended Mackintosh says 5 per cent of vouches sold through Groupon were redeemed. Three weeks after the sale, it was 15 to 20 per cent. Mackintosh added that the full payout for vouchers sold occurs in staggered amounts over a 30 to 90 day period.
“It’s been hugely important to us because we’re a new and young business,” she says. “We really depend on word of mouth of marketing and making new customers into regular customers. That’s our job now.”
Chef Donna Dooher of Mildred’s Temple Kitchen also ran a Groupon deal for her Liberty Village resto.
“I really began looking into it seriously when I started to hear more and more talk about Groupon,” says Dooher. “I always try to experience things from a consumer perspective. And with Groupon I became intrigued. This whole group buying thing is going to be a game changer in the way people shop.”
Dooher offered two Groupon selections: $15 for $30 worth of lunch, and $30 for $60 worth of dinner. After the 48-hour deal expired they sold approximately 2,000 dinner vouchers and 500 lunch vouchers.
“We were really trying to target a certain customer demographic. The young liberty village type who could bring business to the restaurant if they weren’t familiar with us before,” she said. This is where, to make the offering work, we really tried to bring in new customers to the restaurant and give them an incredible dining experience.”
Dooher also cautioned fellow restaurateurs interested in Groupon to pay attention to the type of business they want to attract to their resto and to deliver top notch service regardless of their customer’s coupon-paying status.
“You need to be very clear about why you want to do this,” she said. “You also have to be prepared for an influx of business. You have to train your staff and there is a lot of work to be done.”
Through it all, however, Dooher said she was thrilled with the support and networking she received on Groupon’s end.
“They were very, very good at explaining first and foremost the benefits it would offer to my business,” she said. “I’m very impressed with the Groupon company. They were very professional and very efficient.
Chad Nason, who does media relations for Groupon, attributes the company’s success to the careful evaluations they run on potential businesses.
“At Groupon, we have a whole team of people who research and inspect companies to make sure we’re offering our customers only the best businesses in every market,” he said. “We look for positive online reviews, good word of mouth, state licensing where appropriate, the ability to handle running a Groupon promotion and more.”
Nason also explained that Groupon’s rigorous tracking information provides businesses with clarity about who their deal is attracting and why.
“Tracking and redemption for merchants has been a big priority for Groupon over the past year,” he added. “Merchants can now see the age, sex and [postal] codes from where Groupons were purchased. They can also see when people bought their Groupons.”
Above all, Nason says Groupon is helping usher in a new and more affordable type of advertising by introducing today’s picky consumer to local and unique businesses.
“Before Groupon, many small businesses had to rely on local advertising, with big up-front costs and no way to know if it was effective,” he said. “With Groupon, local small businesses are guaranteed new customers for no money up front. It’s a win-win.”