5 Reasons Why Your Restaurant Business Shouldn't Use Groupon...EVER AGAIN. 🍕🍕
Groupon and similar discount dinner sites like 5pm, Wowcher, Itison and others in Scotland, all seem to be excellent for consumers. But the feeling has not been mutual for many of the restaurants owners we spoke to across Glasgow, Edinburgh and beyond. Some restaurants have found Groupon to be hurting more than helping their business during the slow parts of the year and have instead found success by switching to social media marketing, predominately through targeted Facebook and Instagram campaigns. They do this for two main reasons: (1) it is less expensive and more effective to promote your restaurant on social and (2) you can create a fan base and a pool of potential customers to market to, time and time again. As long as you have strong food photography and the time to commit to a clear advertising strategy (or the wisdom to hire a pro), your business will find success through social. 🙏
This blog highlights the top 5 reasons why restaurant owners have stopped using discount dinner websites and concludes with a link to one of our most recent case studies on this very subject below:
1. Discounting and special deals that end up with little profit:
Needless to mention, there is so much competition within the hospitality industry. Restaurants, both new and old, feel like they must create special offers on these third-party sites in order to attract new business or encourage customers to come back. When you look at how much of a share these companies take though, it is frightening. Groupon takes 50% - ouch! What many restaurant owners do not realise is that running promotions on social media platforms like Facebook and Instagram not only gets more patrons through the door, but it also generates ongoing, motivated engagement with your fans. If you can build up a strong fan base, you will have a much higher chance of converting one-off restaurant goers into loyal guests that shout about your restaurant to their pals, use your company hashtag and continue to come back.
Here's an example of a very successful promotion that is marketed through Instagram, instead of on third-party sites, from Toni's Pizzeria a local pizzeria in Giffnock, Scotland. The instagram account has 12k followers and counting:
2. Over bookings and unreasonable terms = unhappy guests:
The t's and c's of most restaurant vouchers includes an expiration date of when it must be used by, stipulated by the restaurant owner. Others also prevent diners from using their vouchers during certain days and times during the week. Some of the more popular restaurants that get into bed with the Groupons and 5pm websites end up not being able to cope with the number of vouchers sold. There have been multiple cases where businesses had to tell discount diners that they have no spaces available for them during that timeframe due to over bookings. Since the voucher was bought through a third party, the restaurant can't refund their guests and this can result in hostility and bad reviews. In addition to this, some guests are feeling singled out. If you go on Tripadvisor and Yelp you will see a number of restaurant customers who felt that they were treated differently because they were using a voucher when compared to the guest who paid regular price. If you are after repeat business, your guests must feel like they are getting the 5* treatment.
3. "Two waters please" - No chance to upsell your checks when they are prepaid:
In a perfect world, many restaurant owners assume that these discount diner will spend money on drinks and additional courses out width their voucher upon their arrival. When in reality, quite a lot of customers refuse to splurge on a couple of cokes since their food experience is technically paid for. So forget about tipping, either for your staff! Some of these bargain hunters will literally dine and dash after they've cashed in their Christmas present.
4. Lack of loyalty - customers who don't return to your restaurant:
Once they've dashed, what happens? How do businesses reach out to their discount diners thereafter? Sites like Groupon will not provide email details over to the restaurant owner, making it harder to acquire repeat business. These "Groupon people" are restaurants guests who are renowned for their infrequent returns. Once they've finished their "3 courses for a tenner" deal, that's them away until your restaurant has another unbelievable voucher available. The next time they are out to eat, they are most likely onto the next big offer down the road. Quick Fix: we always suggest to our restaurant clients to introduce a chalkboard indoors that lists all of your social media pages to spark up some additional follows from diners in between courses or an outdoor sign that attracts folks on the street. Here is a great example of this we found:
5. Social media marketing is more effective and fun:
There are so many reasons why restaurants are having fun with their social media pages. Facebook provides business owners with the ability to market their promotional deals or best dishes through precise targeting. As found in our case study below, customers that live right around the corner may not have known about your place of business until it has popped up on their newsfeed. Facebook and Instagram can also target ads down to the postcode, to gender, age, level of income and general interests and behaviours. Instagram and Twitter provide businesses with the chance to market themselves to a much wider reach with the use of hashtags. Using trending hashtags of the moment, such as #pancakeday or typical ones around food, such as #foodie or #foodgasm, or you can create your own custom hashtag that you encourage guests to use when they are taking pics of your most photogenic dishes.
Here's an example of another social success from Cafe Strange Brew in the Shawlands of Glasgow. They use their own custom hashtag, common food hashtags and actually hashtag each ingredient to get a larger reach: