- Bryan Oller
- Nosh fared relatively well on its LivingSocial deal.
If you're going to pose the question, "Are collective-buying sites good for restaurants?" then you might as well ask the restaurant owners themselves what they think. We did just that, and in the main story share thoughts from the proprietors of the Curry Leaf, Jake and Telly's Greek Taverna, and Opb&j. Collectively, they represent both sides as well as the middle of the spectrum: a like, a dislike, and a like-one-site-but-not-the-other, respectively.
What follows is information from another batch of local restaurateurs who were willing to share their numbers and impressions with us.
All report customers spending to the exact deal amount, but many also report customers who overspent, some quite a bit. Remember, most businesses split 50/50 with Groupon or LivingSocial, meaning they take home 25 cents on the dollar; if a deal sold at $10 for $20, a restaurant gets $5 and is essentially giving away $15 of goods.
Blue Star, manager Brandon Hanson
• Launched Groupon in Colorado Springs on May 3, 2010, selling 691 Groupons at $18 for $45; 49 of those, or 7 percent, were never redeemed.
• Felt Groupon "pulled in a different crowd" than other coupon deals, more young professionals than coupon-clippers, and that enough of the people were new, so it was worth it.
• Wouldn't do another deal at Blue Star, but thinks it's good for newer restaurants.
• Believes Groupon's "novelty is going to wear off pretty quickly, and soon be a little less powerful than it was."
Briarhurst Manor Estate, owner Ken Healey
• Sold 112 Groupons in May 2010 at $25 for $50; 106 LivingSocials in September 2010 at $25 for $50, and 267 LivingSocials in December 2010 at $30 for $60. He didn't keep track of how many were redeemed.
• Estimates that overspending by both Groupon and LivingSocial customers has averaged around $40 to $50, and feels that he'll see many of those customers again, based on comment cards and newsletter registration.
• Prefers LivingSocial to Groupon: "They were more personable, caring and interested. I found Groupon to be very sales-oriented — 'Wham, bam, thank you ma'am.'" Also more impressed by LivingSocial clientele.
• Remains "on the fence" about doing another deal.
Nosh, manager Tyler Schiedel
• Sold 363 LivingSocials in September 2010 at $27 for $60; 44 of those, or 12 percent, were never redeemed.
• Negotiated a rare 70/30 split in Nosh's favor, making it a less risky and more lucrative venture from the get-go.
• Tracked a total of $7,729 of overspending, equating to an average of $24.08 per coupon.
• Achieved some new customers and would consider running another deal with LivingSocial; didn't like Groupon's terms.
Springs Orleans, event and marketing director Shelby Pywell
• Sold 310 LivingSocials at $20 for $40 in January 2011; the restaurant was then called Il Postino, and had a more modestly priced menu.
• Has tracked an average of $20.63 of overspending thus far, which is good, but still about $10 shy of what's needed to break even on the deal.
• "As far as the cost to us, it's a marketing campaign. My main goal was to get people in the door, and we've had several return visits due to it. ... The thing I like is, it's a return on your investment ... there's a guarantee that people will actually come see your place."
• Is satisfied with LivingSocial, but wishes the site would take a smaller cut: "There should be a sliding scale or something to help businesses out. A commission base that is a little bit more appropriate for the business that it's doing a deal with."
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