coupons and/or groupon: love or hate?

Do you hate coupons? Love them? Have you had success or failure with modern-day coupon programs online, such as Groupon?
I’m working on a story about coupons for PMQ’s October issue and want to get both sides of the argument–operators who can argue that using coupons is helpful vs. those who say they’re no good. If you have an opinion one way or the other, please contact me at [email protected]–and feel free to keep the discussion going in the Think Tank! Thanks!

Tracy Morin
Managing Editor, PMQ Pizza Magazine
662-234-5481 ext 140
[email protected]

Coupons are a necessary evil in my area. Who wouldn’t want to hold dollars for profit? Unfortunately, I feel the need to coupon heavily to A.) get people in and B.)Keep up with competition. As far as groupon goes…did it and hate it. I definitely value building customer base and attracting new ones, but not at a loss. Groupon is a promotion at a pretty heavy loss. Their are previous posts that discuss the pros and cons at length in the tank.

Coupons are almost a necessity in my area. I try to get around that fact by A) Turning the coupon into a package deal, forcing the customer to spend more than the norm to get a discount or B) Discounting or giving away a free item that is typically not ordered (like a dessert item or low cost item).

I do not give discounts directly off my pizza and I almost never give away free breadsticks as 50-60% of my customers order them already.

While I do not believe Groupon is the way to build a successful business, it is still a useful tool if you use it in the correct manner. To me, it is advertising. Plain and simple. I’ve done it twice now, 16 months apart. I consider both times to be a success. While some (or maybe even a majority) of the Groupons sold went to bargain shoppers, their ability to reach roughly 200k email addresses far exceeds my ability to reach even a fraction of that. While I break even on the food costs, and incur a small increase in payroll during the initial groupon week, that is no different than the costs I incur doing a 10k piece mailing and getting a 2-3% response rate.

Groupon is not for everyone. If you are a busy store running 75-80% of your max capacity or even max out on the weekends, why bother. But for those who are still growing (or are in the slow season) and can handle the influx, I say go for it.

I receive a call today from someone promoting a concept called Steal the Deal. The pitch was you post a deal on their website for 24 hours. You can make the deal what ever you would like and you can place any limits you would like. After the 24 hours your information remains on the site for a year. They say this is to give you the exposure to your community.

There were a couple of things that bothered me about this deal. First the caller said there are 2000 members in my city of 50000. Second I went to their website and there has only been one business in my city on their deals.

I just looked at the application form and under commission it says 50%

Has anyone used this type of promotion?