Lincoln businesses embrace Groupon
Bread&Cup owner Kevin Shinn greets customers Kelly Steele and Crystal Boggess. “We’ve had a steady increase each year, each of the three years we’ve been open,” Shinn says.
Story and photos by Lacey Mason, NewsNetNebraska
Thousands of people in Lincoln are checking their e-mail for the latest Groupon coupon, a daily online deal featuring discounted fare from local businesses.
The community is buying into Groupon, and while the verdict is still out on whether they’re making money, businesses like it too.
Groupon, an online company established in November 2008, connects consumers with local businesses across the country by offering daily coupons for half off or more. Each business sets a specific number of coupons, commonly referred to as “Groupons” that need to be sold before the discount becomes official. Customers are not charged and the coupons aren’t valid if that number is not reached.
Groupon has been operating in Lincoln since June.
“The goal is two-fold,” said Julie Mossler, a spokeswoman for Groupon Inc. “One to be able to revitalize the customer base and on the other end to give local consumers something to eat, do, see and buy.”While the types of businesses featured on Groupon vary, Lincoln restaurants are the most frequent deals found on the site.
One of the first Lincoln restaurants to be featured on Groupon was TwoTwins Café, an eatery that opened its doors in August 2009. TwoTwins, which is owned by identical twins Denise Korinek and Kim Smith, offers a variety of breakfast, lunch and dessert options.
“Every Groupon customer has spent additional monies beyond the coupon, has brought in friends with them, and has committed to returning, and we have seen that,” Korinek said, “we have witnessed that. And for us, that is what builds our business, the customers coming back and then paying it forward and telling their friends.”
TwoTwins sold 384 of the Groupons, almost twice what the owners expected, and has redeemed 200 since the deal closed on July 13.
Other more established businesses have turned to Groupon as well.
“The hope is that those people who haven’t been here in awhile will come back again, “said La Paz owner Julie Burroughs-Holm, who owns the restaurant along with her husband, Rich. La Paz sold 1,337 Groupons, more than twice the number Burroughs-Holm had projected.
For La Paz, Groupon hasn’t been that profitable, but the restaurant didn’t lose money either. Profits weren’t the goal though, Burroughs-Holm said. She just wanted to remind people that the restaurant was still here.
For some businesses, participation took some encouragement. Kevin Shinn, who owns Bread&Cup with his wife, Karen, said Lincoln Groupon sales representative Laura Phelps contacted him four or five months ago, but he turned her down. Twice.
“Tell me, why do I need it? Convince me why I need this from you,” he said. “She convinced me with 25,000 people.”
That’s the number of Lincoln subscribers who receive Groupon’s daily deal in their e-mail inboxes every day. And that number is growing constantly.
“When someone says, “let’s go eat’ or ‘where should we go to lunch?’ you have three or four ideas pop into your head right away,” Shinn said. “ I realized that I needed to be one of those places.”
About half of the customers coming to Bread&Cup the weekend after the Groupon deal were first-time customers with coupons, Shinn said.
TwoTwins also had a burst of new customers following its Groupon exposure. About 95 percent of the redeemed coupons have been new customers, Korinek said.
Groupon costs businesses nothing out of pocket. A portion of money made goes to Groupon, and that amount varies, but the rest goes straight to the business. Prices of the coupons vary too. La Paz offered a $20 coupon for $10 while TwoTwins offered $15 worth of fare for $7. Past offers have ranged from a $100 chemical peel treatment from JMISKO for $50 to $3 for admission to the Lincoln Children’s Zoo.
Sales aside, businesses say that Groupon’s sales representatives are easy to work with and make the process of getting their offers up painless.
While most businesses received significant response to their offers, not all would readily participate in the near future. Burroughs-Holm of La Paz said that while Groupon was a good experience, it didn’t bring in extra money. Most Groupon customers, new and repeat, only spent the value of the coupon. On the other hand, the restaurant wasn’t in it to make a huge profit.
“When you spend 60 hours a week at your place of employment you think, ‘Oh, everybody knows La Paz, but they don’t.”
Shinn of Bread&Cup said he would participate again if the number of subscribers increased significantly.
Korinek, however, said she would definitely use Groupon again because of the exposure and creative people she was able to work with.
“It was an opportunity to reach a different echelon of customers, “ Korinek said, “the technology savvy customer.”
Not everyone can become a part of Groupon, which has a set of criteria before selecting a business. The companies must have good online reviews if they are established, a website with a menu and valid state licenses.
“We don’t want someone mediocre. It’s a hodge-podge of all of those things,” Groupon’s Mossler said, “it’s not black and white. It can be a fantastic business without a lot of reviews, that’s why we have a lot of criteria.”