Do your Groupon offers make money?

Do your Groupon offers make money?

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Offering a daily deal through Groupon has been an act of faith for most restaurant operators. There was no real way to know how many deal-driven customers eventually returned to purchase meals at full price. Now Groupon has come up with a tool that gives operators some insight as to how well their daily deal promotions performed.

Groupon’s tool is known as the Merchant Impact Report [4]. It’s meant to give merchants like restaurant operators some clarity on key performance results of their deal. Capabilities include:

Marketing analytics that reveal the total number of Groupon subscribers who received a merchant’s deal via Groupon as well as analytics on which subscribers are purchasing the offer, broken down by geography, gender and age.

Customer insights that show the percentage of customers new to the business or reactivated as a result of working with Groupon and the estimated percentage expected to return within 90 days.

A profit calculator that helps a restaurant operator estimate the cost-effectiveness of each promotion, including payments from Groupon, overspend above the value of the deal coupon, revenue generated by returning customers and the merchant’s costs.

No question these are the kinds of things operators want to know. Some of it is hard data that’s relatively easy to collect. But how does Groupon come up with some of its other crucial estimates?

“The new vs. existing customers breakdown is based on our post-Groupon redemption survey that we proactively send via email to our subscribers,” says Groupon spokesperson Nick Halliwell. “The return customer data is based on one of two sources: for merchants for whom we have transaction data (e.g., Groupon Rewards or Groupon Payments), we are actually calculating the percentage of customers who are returning based on that data.  For other merchants, we’re using an estimate that’s based on their category, deal structure, popularity, etc.”

The keys for restaurant operators are that the tool is free and that it works for any size operation, including single-unit independent restaurants.

“The Merchant Impact Report was created as a result of our merchants’ feedback and is designed to provide a clear, concise view into the effectiveness of their Groupon promotions,” said Amit Koren, Groupon’s director of merchant products. “Until today only the largest companies had access to this kind of information, and now we’re providing these powerful analytics to every local business that works with Groupon.”

The upshot for a full-service restaurant operator is if that if you want to know whether Groupon deals are a good use of your promotional dollars, you now have a way to help answer that question.