Restaurant Owners Get Groupondoled

by Gabriel Hummel on October 22, 2010

Groupon vs posies cafe

“Hi, I am Gabriel Hummel and I am a Frugal Freak”

“Hi Gabriel”

Like a debunk AA meeting for thriftsters, I am a sucker for great deals and will pinch 1/16 of a penny when it comes to frivolous items that I have to have (damn you toilet paper and trash bags).

That being said, I never shy away from a great deal on a restaurant that I am craving to be in close proximity of. Like a neighborhood cat in heat, I will gladly except the warm embrace of many a suitor when it comes to the world of coupons.

Case and point: Groupon and the million other coupon businesses shooting up faster than your neighborhood drug addict.

drug-addiction-cigarettes

These things are great for my stingy habits and can be equally great for up and coming food service providers. That being said, they can be a double edged sword for the likes of both of us.

Groupon and Groupon imposters often get me to score food deals that I wouldn’t necessarily try, which is a good thing, but often times I am whimsically pressured to procure a coupon for a restaurant that I am not that interested in, but the deal is too bloody good to pass up.

Overall this has worked in my favor, but I have had a few experiences where I walked away thinking “meh” and chalked it up to another food adventure gone weary.

Up and coming restaurateurs can equally get slapped upside the head by Groupon when they don’t know what they are getting themselves into.

Groupon hits the email inboxes of hundreds of thousands of people in a given area, and nearly of of those Grouponders are practically itching their credit card trigger finger, waiting for a great deal to come along.

im-kind-of-a-big-deal-coupon

When a business signs up for the Groupon, they understand that they typically sign up to attract a plethora of new customers and typically fully expect to break even or lose a bit of money as Groupon keeps most of the proceeds from sales that cost less than 10$. The point of Groupon isn’t to send a special offer to a select group of your favorite clientele; it’s to elicit the much needed support from new customers that wouldn’t know jack shit about your business otherwise.

Case and point, Posies Café and the Groupon debacle.

Since her post is so long and could only be circumnavigated with a D-Day map and a equally pissed off business owner’s translating abilities, I will offer you the gist of the article.

Basically, Posies Café Groupon deal apparently attracted rude, neglecting customers that not only forgo tipping of wait staff, but also insisted on bending the nature of the Groupon offer to the point of Jackson Pollock painting.

In addition to that, the income garnered from the endeavor did not cover her operating expenses and she had to shell out 8,000$ in order to cover payroll.

Suffice to say, I am playing the world’s smallest violin at the moment.

worlds smallest violin

Does her situation suck? Yes

Did she lose money on the whole ordeal? Yes

Did she acquire a massive flux of new customers? Yes

Groupon is fairly explicit with the juicy details of their business, they keep the first 10$ and you get a ton of new customers flooding through your doors. Some of those people will be frugal bastards who won’t tip anyone and likely carve their Nazi paraphernalia into the bathroom wall. Others will hopefully love your food, enjoy your service, and become a returning customer.

That Is the business model in its simplest form and from my readings into the subject matter, both sides of this debate knew exactly what they were getting into, but Posies Café didn’t know how to handle to traffic.

You can’t expect everything to be sunshine and rainbows with people coming into your store take craps that look like Carebears. This is the rough and tumble world of the restaurant industry and sometimes you have to fork out unforeseen costs in order to expand your business.

care-bears-rainbow

That is business she is now guaranteed to obtain with all the coverage her story got. Free press coverage to the tune of eater.com, Grubstreet, the official Groupon blog, and the associated press made sure that everyone and their mother knows about the rough and tumble world that is Posies Café.

I certainly wish the best for Jessie Burke, the owner of Posies, and wish nothing but success for the business. Just make sure that next time you do a promotion, you grow a pair and put on your best smile.

Groupon gang bangin’

Gabriel

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