Groupons: Local Businesses Search For Immediate Rewards

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[This is an excerpt from my new book, Groupon: Why Deep Discounts are Bad for Business]

No one’s coming in! That's why so many restaurants are flocking to Groupon and the rest of their online coupon sites.

So your restaurant is empty one night.

So what? Your restaurant is empty one night.

Ever seen a Gordon Ramsey business makeover Kitchen Nightmares on BBC? Usually the restaurant is dead too.

The first thing he does is taste the food. It’s typically terrible. Next he cleans up the kitchen. Next the wait staff, etc.

Then he has them bring the new food out to public places where the restaurant can get “face time” with the people so as to connect the food to the people and the restaurant. He builds the relationships over the food, not a piece of paper.

In one he had a parade through the village touting how much things had changed. In many he has the restaurants partner with non-profits to host events. But only after he knows the experience will be exceptional.

Showing You Are Desperate
I remember a college professor telling a young guy who was always looking around the room, sizing up every girl he met while trying to get a date, “I know you’re lonely. But don’t try so hard, you look desperate.” That’s no different than these businesses.

Business is about getting people to come back like a boomerang, not just come in.

How To Grow Your Business
Instead of looking for an immediate fix through discounting, why not look at your competition?

Why not look at the way you’re following – or not following - your franchise’s procedures?

Why don’t you look at the things that are making people NOT come back like your Bitter Betty behind the counter? Your dated fixtures. Your confusing store layout.

Trust me, those are easy to fix.

What are you doing to stick in their memory – in a good way? What are you doing that sticks in customers minds to not come back?

The Bad Seed
I know of one restaurant in Long Beach, California that was named for a couple’s six year old daughter. They thought it was “fun” having her in the restaurant talking to guests during dinner.

Yet when you spoke to customers, they hated that feature – even though the food was very good – they wouldn’t go back and have to deal with “the brat.” One woman told me how the kid peed on the sofa and giggled. The restaurant was gone within a year complaining of the “economy.”

Or how about those businesses turning off their overhead spotlights in the afternoon to save money? “Gee honey, sure looks dark, I guess they can’t even keep the lights on.”

Or worse, businesses that tell those of us who are prepared to shop in their store or restaurant how much they are struggling? Save that for a close friend over coffee. Or a therapist’s couch.

You need to look successful whether you are or aren’t. Customers don’t return to businesses where they sense, see or hear people struggle.

No Groupon, coupon or other discount is going to change that. you have to confront the facts and work to correct them.

Tomorrow: Part 8: The Groupon Fallacy: Getting the Word out.

This is an 11-part series on Groupons and their ilk, discounting and couponing in general and why they are all so damaging to your business. That's whether you are a large brand like GAP or a regional chain or local independent retailer. Here are the previous posts in case you missed them:

Bob Phibbs, the Retail Doctor®, has helped hundreds of small and medium-sized businesses in every major industry, including hospitality, manufacturing, service, restaurant and retail. He is a nationally recognized expert on retail business strategy, customer service, sales, and marketing. With over thirty years experience beginning in the trenches of retail and extending to senior management positions, he has been a corporate officer, franchisor and entrepreneur.

Learn how to improve your business with The Retail Doctor's Guide to Growing Your Business.