An article appeared in the Star Tribune (I believe this topic has been widely discussed elsewhere around the local food news circuit recently but I’m too lazy to find the links) about the recent rise in discount dining offers, something which one local restaurant owner claims may be “borderline predatory,” depending on the advertiser in question.
Being that I’m married to The Budget Nazi (TM), I have to take advantage of coupons not only at the grocery store but also at as many restaurants as I possible can because reviewing these places is not cheap. I generally use the coupons available in the Wednesday junk mail fliers that arrive each and every week without fail but I have done others such as Restaurant.com (don’t use them unless they’re $2 or less for a $25 gift certificate as they aren’t worth it otherwise) and even very recently considered the deal at The Rack Shack in Burnsville left by reader ‘lenny’.
The article notes restaurant owners take a heavy hit on a customer’s first visit using coupons from places like groupon, restaurant.com, and the like but subsequent visits bring in revenue and that’s how you make your money–just like any other coupon/advertisement scheme going back ages. Some restaurant owners refuse to participate stating that they cannot even cover the cost of the food they serve on deals like these. While that may be true, the biggest thing I see is an opportunity for advertising and getting people in the door and converting them into long-term customers. The way I see it, many restaurant owners realize that they are in a competitive market and the service they provide just doesn’t stack up to other restaurants around town. I have seen it too many times–I go to a restaurant (coupon or not) and the food sucks. I do not have the money (see the “Budget Nazi” above) to continue to review restaurants and eat at places that continuously let me down–my wife just won’t allow it. I’m sure that many others are in the same boat these days.
So, a word of advice to restaurant owners, regardless of their participation in these coupon deals: make your food and service excellent every single day and you’ll build the customer base you want. Ensure that you are putting for 100% effort in everything you and your staff do and you will definitely make the ROI you see necessary to continue to operate in this economy. And to the restaurant owner who believes that these couponing outfits are “predatory,” well, I believe restaurant owners who serve crap for food and/or service are just as predatory. Luring me into their new place only to let me down–hard. I think all restaurant owners should seriously consider the other side of the table instead of only their bottom line. Everyone is suffering right now and by severely disappointing your customers on first or second visits and then blaming others for your own demise is ridiculous.
So do you use coupons when you go out to eat? Have you used any of those discussed in the article? Do you believe that these type of deals do not build loyal customer bases or do you agree with my assertion that it’s really the restaurants themselves that create that sort of environment? Whatever you have to say about this one go ahead and comment on as I’d love to hear what you have to say.
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March 31st, 2010 at 10:58 am
I don’t use coupons very often, but usually because I’m too lazy to find them. Sometimes I feel like a total cheapskate using coupons. I probably shouldn’t, though.
March 31st, 2010 at 10:59 am
I have used restaurant.com “certificates” a handful of times. We were treated pretty poorly at one place (can’t recall the name) due to the certificate and we were actually told that several of the menu items would be unavailable to us if we used the certificate.
Another time we ate at Woolley’s in St Paul, which was located in a hotel. The food was mediocre at best and way overpriced.
I have purchased a couple Groupons lately, but have yet to use them.
March 31st, 2010 at 11:16 am
We use coupons quite a bit. I too have memory problems and tend to forget until I get there or just can’t remember where I “filed” them. I don’t feel bad about using them because they always make a profit on us with our beer portion of the tab.
March 31st, 2010 at 11:30 am
I read that article and was actually kind of pissed off with it. I have tried many restaurants in the area only because of a coupon that I have seen whther in the newspaper, restaurant.com or groupon and quite honestly with all the restaurants that we have I may never have tried them at all without them. For the most part, The first visits have actaully made money from me on food and drink for the rest of my family and in addition with such places as Victor’s and Joe’s Garage I actually have gone back again because of the food. So my opinion is similar to yours Bill. Get me in the door with a coupon, give me great food with great service and you get me for life.
March 31st, 2010 at 12:01 pm
Yes I use coupons when dining out, I would estimate maybe 40-60% of the time; coupons are a way for me to go back to different places around town that I haven’t been to recently and occasionally (though not usually) to try new places. Most places that I use coupons at, I’ve already been to or are chains. I have made it a personal goal to sign up for as many restaurant email clubs that I know of locally – it creates a month of discounted dining since most chains have entree BOGOs for birthdays now.
This brings me to my point – I believe that coupons shouldn’t be viewed by restaurants as a introductory offer – but rather coupons are a form of effectuating price discrimination in the economic sense. I’m not going to go to some of the places that I go without a coupon because I’d rather eat something else. Price drives my decision most of the time because it’s food and not some permanent good that I buy.
Other people, on the other hand, make more of their food choices based on food/service/atmosphere/etc and less on value. Fine – they’re willing to pay more for the same product/service – thus price discrimination. If restaraunts can’t make their business model work with coupons, then it shows that a) their coupons are too discounted, b) their food is too expensive, or c) they are selling an inferior product/service for the price. Economics.
March 31st, 2010 at 12:42 pm
I agree with you Bill. I use Groupon and Living Social its a great way to try out new places and do different activities if your on a budget, the main thing for me is trying out something new and if I do like it I would go back to the place and purchase a meal without any special discount. If the restaurant truly believes that their food/service is great and are willing to back it up groupon/living social is a great way to get people to try it, and come back for more.
March 31st, 2010 at 12:52 pm
I’ve never used any of the coupons like on Restaurant.com but I recently purchased coupons for the Rack Shack. I don’t dine out much so when I do eat out, I’m very selective about where I eat. I research where the best values and deals are and then eat there so that I feel I got my money’s worth, without even having to use a coupon.
Eating out is a luxury for me, I only do it about once a week. I save lots of money by cooking my own food and I prefer my own cooking where I know it’s going to taste great opposed to going out to eat, being disappointed and feeling bad for all the money I just spent on a terrible meal.
As for the coupons, if the restaurants want to offer them, that is their decision. They better make a good impression on those coupon users to get them back in the door. I use coupons for groceries but hardly ever for restaurants. I have no problem paying full price for an expensive meal (Fogo, Melting Pot) since I only eat at those places maybe once in 18 months.
March 31st, 2010 at 1:39 pm
I just bought a bunch of restaurant.com certs – through my gym we got 80% off, so I ended up spending around $20 for more than $200 worth of certs for nearly 10 restaurants. Most of them were restaurants that I’ve never been to, but most I’d wanted to go to. One was for an Indian restaurant that I’ve walked past a dozen times, drooling over the wonderful smells coming out of the building. I was hoping that the coupon would be the push I needed to actually go to the restaurant.
I agree with Dan who said “if the restaurants want to offer them, that is their decision.” The coupon user shouldn’t feel bad for taking them up on an opportunity, and service shouldn’t be sub-par because of it. If the restaurant really feels they’re being screwed, they should stop offering coupons. Duh.
The restaurant.com certs are also good for a year, which I am pretty happy about. All of them require you to buy at least twice as much as the face value of the cert, so it’s not like you’re getting a free lunch (OK, maybe one free lunch with the purchase of another one).
March 31st, 2010 at 1:44 pm
I got a Happenings book for a christmas gift this year. Best gift ever. Literally will have saved me $1000+ by the end of the year, at a cost of $25. No idea how I didn’t know about this.
March 31st, 2010 at 2:23 pm
I recently used restaurants.com certs at a few places after my wife got them for free from Motherhood Maternity. I found them to be relatively easy to use and never got any attitude or different service. The rules of how much you have to buy and gratuity tacked on before discount are pretty clear. They all said that the inclusion of alcoholic beverages were at the discretion of the restaurant but I never had any problems with them. Of course, I got one of them for the bowling alley that we bowl at every week, so that probably helped, but at the other restaurants, we had equally as good treatment.
It did bring us in to eat at two places that we wouldn’t have otherwise eaten at and will probably go back, sans discount, so I’d say it accomplished it’s goal.
March 31st, 2010 at 8:23 pm
I just don’t go out enough to have coupons count. Though I’m trying to be more aware. A challenge I have noticed with friends that kind of irks me is when using coupons they will calculate their tip off the price with coupons included. Thus the staff may provide great service, but they loose out on the tip.
I think the coupon thing is a good way to pull some new people in. Keep the service high, and some you will get to come back and pay full fare. Some will only come back if they find another coupon, and others won’t ever come back.
The key with the coupons is that you need to find a way so that you are not selling things below cost. keep your portions within reason. if folks are always asking for a doggy bag, you’re giving them too much food.
April 2nd, 2010 at 10:34 am
Like Tiffany said, I mainly use coupons from Groupon, Crowd Cut and Living Social to try out restaurants and activities I might not have tried without them. If the service at the business is good then I will usually return. If they scoff at my voucher, they have probably lost a customer forever, coupon or not.