article on me and the voucher sites in WSJ

[thespian.livejournal.com]

I wasn't going to post this in the DSLJ, but a couple people asked to see it, and there was actually something that might be of interest to davis square types. Last week, when I posted the McKinnon's voucher, I noted here that it's simply not a big deal when Yak & Yeti, Brunello's or Diva offer vouchers - meaning they do it all the time (there are Y&Y and Brunello's vouchers available now I can point you at if you want).

The article is going to appear in the Wall Street Journal tomorrow on page B1. It's on the website right now here (BugMeNot has valid codes for the WSJ). Without logging in you can see me leaning on Clover Food Lab's truck in Dewey Square. This was in the middle of it for those who don't want to bother:

As a result, Groupon has had to increasingly compete for merchants. Brunello Bistro, an Italian restaurant in the Boston suburb of Somerville, Mass., has run successful offers with Groupon but now runs deals with so many sites that Fernanda Nogueira, who handles the restaurant's marketing, said she can't even remember them all.

Ms. Noguiera said she likes working with rival daily-deals site BuyWithMe, partly because BuyWithMe takes 40% of a voucher's value, compared with Groupon's 50% cut. But she added that the eatery tries to work with numerous daily-deal sites "just to see how it's going to be." Others it has tried include EverSave, kgbdeals, OpenTable, HomeRun and CoupMe.

Back in Quincy, Ms. Clarkson last week bought seven vouchers for a total of $170. Three were from Groupon for a restaurant called Redbones. But four were from Eversave for a local butcher named McKinnon's.

So 'back in Quincy, Ms. Clarkson was going a little nuts with the Davis Square vouchers last week'. :-P He also didn't mention I used credit. Used up the last of my Groupon credit on Redbones, actually.

But I also thought it was interesting; to Brunello's marketing person, they're plastering the market for new business, whereas to me, as a voucher site super user type person, I don't even mention it when they have a new voucher out, because whoop de doo. Redbones hadn't offered a voucher in 21 months (yeah, I know just how long, because I freaking loved that deal), and McKinnon's hadn't offered one at all, and the end result was we call dove on those deals like starved wolves (mmm. Meat). They sold 10,000 Redbones vouchers.

Comments

[ruxxell.livejournal.com]

i just read this! a guy at work brought it over to me! good job.
170 on groupons, sounds about right. shit's addictive.

[thespian.livejournal.com]

Yeah; though I buy enough regularly at McKinnon's that I'd totally have bought more of 'em. 4 vouchers with $80 is my meat budget for 3 months.

[selkiechick]

McKinnons vouchers! We used to be regulars there! I should pay better attention- especially with it being grilling season and all!

[ron_newman]

I'm surprised that this is a successful strategy for any local business:

Brunello Bistro .. now runs deals with so many sites that Fernanda Nogueira, who handles the restaurant's marketing, said she can't even remember them all.

If they are running so many deals, won't that cause regular customers to always expect them, and to never pay full price?

[firstfrost.livejournal.com]

Also, the couple of times I've gone, they've given me a card for a discount on my next visit.

For me, their menu prices a little more expensive than the amount I like them, but their prices with discount about match how much I like them. It's like they're (at least with the current marketing) just actually a cheaper restaurant with a lot of return-customer lures.

[josephineave.livejournal.com]

It's a do-able strategy, but you have to know what you are getting into. If they were heavily discounting already (Entertainment Guide, Valpak coupons, newspaper deals, frequent guest discounts), then they are just shifting their advertising budget a little. It's possible that they already have a percentage of their regulars who are coupon dependent. If they can make a little money on the coupon carriers and still get a decent percentage of non-coupon users to pay the main profit, they'll be okay.

But if they are barely getting by without using discounts, heavy coupon use won't help. I wouldn't recommend going this crazy with the discounts, but that may already be part of their business plan.

[t4e-ds.livejournal.com]

This is exactly right. There's growing opinion (and evidence) out there that suggests that daily deals are a terrible idea for many small businesses. For e.g. check out
http://techcrunch.com/2011/06/09/groupon-single-worst-decision/

The rationale for doing a daily deal is to give a *new* customer a one-time discount and then convert them to regular customers who pay full price. This aligns with businesses like house cleaning, dentists, hair salons etc. where, intuitively, there's an above-average chance of converting discount customers to regular customers.

In many cases, esp. popular restaurants, all it does is give regular customers a huge break and gets them accustomed to paying less for your services, as you say above. The economics are not attractive for the business; If a restaurant give you a $20 for $40 deal, the deals company typically takes $10, so the restaurant is left with $10 to cover $40 of services. Just do the math when a restaurant like Redbones sells 10,000 of these. Even assuming that 20% of the coupons go unredeemed, it's a massive investment with unclear return. Redbones is a local landmark, has tons of loyal customers, is always crowded and has a fantastic brand... what do they really gain? I hope they know what they're doing... The only person who'll be laughing all the way to the bank on this one is the Groupon salesperson..

crazy economics

[bostonartist.livejournal.com]

correct... from everything I have read these coupon deals are VERY risky propositions for merchants. The business are basically getting .25 on the dollar, maybe a bit more if not all the coupons are redeemed and maybe less if the business does not have a good tracking system in place, to prevent fraud (multiple uses of 1 coupon). The general public loves the deals so Groupon, etc gets good press.

Re: crazy economics

[t4e-ds.livejournal.com]

Good point on redemption fraud... Groupon gives businesses several options to process redemptions electronically but most businesses make a complete hash of it and leave themselves open to fraud.

Also I understand that Groupon can't really monitor the # of coupons a single customer buys even though they say 2 maximum etc. I haven't tried it myself - I've bought exactly 2 groupons for a business I already used - but it seems like you can buy as many coupons as you want as long as you have different email addresses. May be they check the credit card as well to make it a bit more challenging...

Re: crazy economics

[siderea]

I read that TechCrunch article, and you know... Someone years ago told me -- and I haven't confirmed this -- that American Express' business model, back in the days they weren't a credit card company, but a traveler's checks company, was not the fees they charged, but the 3% of traveler's checks that were never redeemed. People would buy traveler's checks and use most of them on vacation, but then some would leave the remainder in a file cabinet somewhere, for use on some future, unspecified date, and they'd never get used. AmEx never had to return that money, or if it did, it was some time long after the money had been productive in some interest-bearing account somewhere.

Also, the businesses may only be getting $0.25 on the dollar, but they're getting it now, and money has time value. If that money is going to pay off exorbitantly priced business loans (some small business owners finance their business out of their credit cards!), it may in fact be the better deal for their bottom line!

Re: crazy economics

[josephineave.livejournal.com]

It's a lot like the rebate model. There are companies out there that brag about the number of rebates that are rejected and that the checks aren't cashed. They have built their business models on the absent-mindedness of others.

[surrealestate.livejournal.com]

I think Redbones can potentially win on this because of alcohol sales. Heck, they regularly have events where they serve food for free so that people will come and drink.

[ron_newman]

I didn't know this -- can you tell us more (such as when the next one is)?

[josephineave.livejournal.com]

Most of the ones I've seen on the schedule are tastings for specific products, but they do sponsor Chamber of Commerce After Hours events.

The next one is:

Business After Hours at Redbones, 55 Chester Street, Davis Square. 5-7 P.M., Thursday, August 4, 2011. Excellent networking, free appetizers, cash bar, free business card drawing (bring your business cards). Sponsored by Central Bank and hosted by After Hours Chair Michelle Mulvena of Moschella & Winston. Members and their guests welcome. RSVP with name(s) and affiliation(s) to smackey@somervillechamber.org

No charge to attend and anyone can sign up.

[gingicat]

My favorite Mexican place looked at the cuts that the voucher sites take and started simply selling their own vouchers in the restaurant.

(It's Cantina La Mexicana in Union Sq Somerville, and the vouchers are $20 for $40, which covers a meal for four - boychik usually only eats the free tortilla chips, and B rarely comes with us, so we sometimes have trouble spending $40!)

[dial-zero.livejournal.com]

I originally wasn't a fan of the place, but the owner won me over by bringing our table some really yummy margarita samples on a slow night. :)

[gingicat]

Roberto is awesome. He's exactly the sort of person a local business owner should be.

[icecreamempress.livejournal.com]

I love their food, but miss the taqueria format.

[madrigal.livejournal.com]

Where can I find a Yak and Yeti voucher?

[thespian.livejournal.com]

http://www.trubates.com/somerville-ma/offer/8605/10-for-20-gourmet-nepali-indian-fare/

[madrigal.livejournal.com]

Thanks

[littlecitynames.livejournal.com]

As this is a post for deal sites, I might as well add that today's Groupon is for Elephant Walk (http://www.groupon.com/deals/the-elephant-walk-boston?utm_campaign=UserReferral&utm_medium=email&utm_source=uu7388130). One of their locations is in North Cambridge, on Mass Ave just above Porter. I got their Groupon last time around and had a FANTASTIC meal there with my boyfriend. They also have whole sections of the menu dedicated to vegetarian options and gluten-free options.

[littlecitynames.livejournal.com]

(Disclaimer: That link includes my referral code!)

[bostonartist.livejournal.com]

You just got $10 :P

[littlecitynames.livejournal.com]

Woohoo, thanks!

[siderea]

Wait, I'm struggling with the fact there was a McKinnon's voucher and I didn't know.

[thespian.livejournal.com]

don't skim my voucher posts :-)

I'm always sad when people don't get really great vouchers*. I don't get the referral numbers I used to get, and I'm genuinely fine with that, but I *really* do like finding these things and sharing them. I think other people are burnt out; there's just so MUCH to get out there right now. And lots of the deals are meh.

*no, really. If there was a niche for 'personal shopper' that was dependent on 'finds me excessively good deals', I'd do it in a second. The problem is that bargain shoppers don't want to/shouldn't pay me, so it's hard to make a living at it.

[siderea]

Well, I mostly subscribe to these things for myself, but I didn't know about eversave. Do you have a comprehensive list of all the services?

[thespian.livejournal.com]

no, since I keep finding new ones and stripping dead ones off. I do have a list of 50 sites that I visit daily (which also includes a couple things like Woot and Daily Steals), and was thinking of turning it into a page that would just let people flip through them all really quickly (limited to the Boston area and online only sites, and I don't think I could do things like Stuff Deals, because they have 50 deals at any one time, with limits based on # purchased, not time).

[ron_newman]

That would be very useful! I have totally lost track of the names of all of the local deal sites (and I only get e-mail from Groupon right now)

[molyflogs.livejournal.com]

Try Yipit.com. It aggregates all of the deal sites for you, on one page. http://yipit.com/

I think you may have to register, but I find it immensely useful.

[littlecitynames.livejournal.com]

I would be immensely grateful if you or someone else would create something like theskint.com for Boston. I'd do it if I had the time, because it was the best resource I ever had in NYC.

[tenshikurai9.livejournal.com]

Well if they go out to eat several times a week and would rather spend the time volunteering/with the kids/with the SO, it might be worthwhile for them to work-out a deal with you.

[tenshikurai9.livejournal.com]

BugMeNot won't give me a log-in.