Coupons and the mad race to the bottom

Recently we asked some restaurant owners and managers 2 questions: Which trends happening in your industry in 2012 excite you most and which ones concern you?

The responses have been fun to read and will make for a great article somewhere. There is a common theme occurring with many of them and a handful of them mention coupons being a trend they dislike due to the erosion of loyalty they appear to be causing. Actually, not one of them has mentioned coupons as being a trend they liked. One very successful restaurateur in Philadelphia sent us this response to a trend he does not like…

“Trend I dislike: The new expectation of many restaurant patrons to “never pay retail.” This industry is not set up for deep discounting, but we’ve conditioned our guests to expect deal after deal.”

I really agree with him and I own a software company – not a restaurant. I can feel his underlying frustration. He has built something wonderful and unique and is proud of it and has priced it appropriately and this is what he is faced with considering now. Heck, I suspect if he does it, he will be forced to use cheaper ingredients and offer an overall lousier product – not one he is proud of.

When the first few daily deal success stories came out showing the wild success business owners were having by offering huge discounts via mobile apps, I’ll admit, I knew they were on to something huge. The craze created by these quickly expiring coupons was genius. And since many of the initial stories were in the restaurant industry – I came up with an idea to let our customers create daily deals inside Schedulefly and email them out to “regulars” – or people on a customer list that’s stored inside Schedulefly. It was a cool idea, but I am so glad I realized it was wrong, not what we do well, and not something we needed to offer only to later turn off.

You see, restaurants – mostly independent restaurants – use Schedulefly. We have been lucky to meet many of them and have heard many of their stories. They are restaurants with flair and uniqueness and an experience that the owners decided to share with others. Think about it a minute – the good quality restaurants that you love, where you are a true loyal customer, why is that? For me – it’s the love they show me and my friends and family over and over. It’s the amazing food – with unique local ingredients and the healthy, hand made dishes my wife loves. It’s the consistently wonderful service. It’s the feeling we get when we eat at the quaint little bar while we chat with the bartender over a drink and dinner. It’s the way it smells and the music they play. In other words – it’s because it’s not like any other place. That’s what makes me a loyal customer that will keep coming back and will tell my friends and family about that have not been. That’s why I am a loyal customer.

I get it though – I get that a restaurant owner can make a typically slow Monday night a record-setting Monday night packed with people cashing in their daily deal coupons. I get that and I know that works for many. But what I don’t understand is how this can actually work long term for an independent restaurant. I think it cheapens what they are really good at doing and the whole reason they hung out their shingle. It’s no longer about the food and the unique experience for the consumer – it’s about the deal. It seems like the daily deal businesses are trying to level the playing field by making all restaurants market their product and their experience the same way (with huge discounts) and also by creating a new wave of consumers that walk in the door only for the deal and not for an enjoyable experience that it truly worth paying for.

So tonight I have a date night with my wife and I look forward to paying full retail at one of my favorite restaurants. It’s gonna be so good and worth every penny!