Ditching Groupon: Case Study About One Restaurant That Did

Twenty-four years ago, Chef Bruce Cooper, a graduate of the prestigious Culinary Institute of America, envisioned a contemporary American restaurant featuring imaginative cuisine. During his search for the perfect location, Chef Cooper found an old print shop in Manayunk, and Jake’s Restaurant came to life.

Fast forward to 2008. Jake’s is wildly successful, a recipient of “Three Bells” from Inquirer Critic Craig Laban and numerous Best of Philly Awards from Philadelphia Magazine. Spurred by this success, Bruce Cooper opened a second restaurant, Cooper’s Wine Bar, adjacent to Jake’s. Featuring a twist on contemporary American, Cooper’s menu consists of smart cuisine – small plate style – with over 40 handpicked wine pairings.

Jake’s & Cooper’s are two sides of the same coin. While both provide a comfortable environment where customers are greeted by name, Cooper’s feels like a more sophisticated extension of your home, if your home consisted of a huge 15-seat bar, a wall mural and intimate booths. The open kitchen and French windows attract a fun and energetic crowd. Jake’s has an upscale appeal, perfect for a special intimate meal and small, semi-private parties and wine tastings.

Chef Bruce is a businessman as much as he is a purveyor of all things delicious. January is traditionally the slowest month for business in Manayunk, but Chef Bruce turned this around by taking matters into his own hands and creating his own version of a Groupon.

In my last article, I mentioned the pros and cons to using a Groupon for your business, one of them being a 75% loss on your inventory. Chef Bruce’s offer was 50% off a $100 gift certificate, thus taking control of the money he saw after discounting. He announced it a week prior to Christmas in 2010 via email to his customer email list (3,500 emails) and by placing it on his website. Customers had to visit his restaurant in order to purchase the gift certificates, they could only buy one, and you had to use it after January 2011.  Cooper saw such an influx of gift certificate sales that he was able to limit the amount he knew he could offer while still retaining his excellent level of customer service.

This promotion was a way of rewarding his customers instead of driving new traffic. Twenty percent of the customers who purchased the promotion redeemed it within the first two months and 66% have used theirs to date.

Another reason why your own Groupon trumps the traditional Groupon site is money. “I get 50% upfront, whether or not the customer uses it [gift certificate]” says Cooper. On the other hand, using Groupon has a maximum return of 25% of the total value of the offer and you don’t get to see the money until three months after your Groupon has been featured.

Thinking about ditching Groupon and trying to go it alone? Here are some helpful tips…

1. Timing

If you’ve been in the restaurant business for years, you’ll have a sense of what time of year draws less organic foot traffic and when it draws the most. Create your promotion by advertising it in-house during the busiest time of the year for the slowest time of the year.

2. Great Offer

Your customers want a great deal.  Show them a little TLC with a great discount of 40%+. No one is going take advantage of your promotion if you are offering anything less than 30%., and people will not rush for anything between 30%-40% off.

3. Your Rules

Keeping your overhead costs in mind, create a promotion that will benefit both you and your customers while still offering them the best service and product you possibly can.

The bottom line: your restaurant, your customers, your promotion, your rules.

The floor is yours. Would you bypass Groupon, and create a deal yourself?