Regular readers of this blog and of SLM's Front Burner are aware of my fascination with Groupon, the Chicago-based juggernaut that has successfully merged couponing with social media. Apparently I am not alone.
Two seasoned local marketers (Norty Cohen of Moosylvania and Scott Anderson of KIG Healthcare Solutions, Inc.,) and a local restaurateur (Brendan Marsden of Modesto), have joined forces with Sauce magazine to introduce Hot Sauce, Deals of the Day, a similar program, but one that’s tailored to local restaurants. (SLM interviewed Cohen in May 2009, and the restaurant coupon was a conversation topic.)
I am told that Groupon’s heavily-discounted, one-deal-per-day offer has been so successful nationwide that there are backlogs. Merchants are enticed by the potential of a huge new customer base and buyers, well, they never tire of a good deal. Almost sounds too good to be true. But keep in mind that Groupon is only 18 months old--and most of their deals are good for one year--so the final tallies for success (or carnage) are not yet in.
As I understand it, here’s how this local model will differ from Groupon:
- It will charge the local restaurant less per sale than Groupon
- It plans to give 10 percent of its proceeds to a different food-related charity every month
- It plans to offer multiple deals per day
- It plans to cap each offer at 1000 sales, creating a sense of urgency for the buyer and limiting the exposure for the restaurant
From the parameters above, Hot Sauce seems to be offering a better deal to everyone. But remember, Groupon is the 800-pound gorilla and the clones followed “with varying degrees of shamelessness” according to Andrew Mason, Groupon’s 29-year-old CEO and founder.
My conclusion…I’m still fascinated, but I must admit, with each huge Groupon sale and the launch of more and more clones, speaking as a former restaurateur, I’m getting just a bit anxious. Deep-discounting will never be a cure-all. –- George Mahe
