|Mixed Picture for Restaurant Daily Deals.|
By Joyce Wu, Sheryl E. Kimes, and Utpal Dholakia
Sunday, 20th January 2013
While many restaurant operators gained new customers and made money on their daily deal offers, others lost money and found their regular customers taking advantage of the flash promotions.
"One big concern for restaurant operators is whether they can get customers to return without having more daily deal promotions," said Kimes, who is the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration.
"Our research indicates that customers will return without coupons, if they enjoy their experience. So, the best strategy for the restaurant is to give all customers full value so that they can really experience the restaurant." Wu is an analyst for Nomura Securities and Dholakia is a professor of marketing at Rice University.
The researchers surveyed 273 restaurateurs who have offered daily deals. A solid majority of the responding restaurants were independent operators. The survey found that about 40 percent of the deal purchasers were new customers, and 35 percent of the deal customers returned to the restaurant without a further incentive.
The number of operators who said they made money on the deal was about the same as those who lost money. Nation's Restaurant News and Restaurant Hospitality provided assistance in conducting the survey.
The study, "Restaurant Daily Deals: The Operator Experience," written by Joyce Wu, Sheryl E. Kimes, and Utpal Dholakia, is available at no charge from the Center for Hospitality Research: