Groupon Internet marketing deals are finding ready consumers in Rhode Island

GROUP THOUGHT: The Garden Grille Groupon offer has generated word-of-mouth buzz for the vegetarian restaurant. /
GROUP THOUGHT: The Garden Grille Groupon offer has generated word-of-mouth buzz for the vegetarian restaurant. /

When Rob Yaffe completed major renovations to his vegetarian Pawtucket restaurant, Garden Grille, he needed a way to get the word out to customers.
He turned to Groupon, the Internet-marketing outfit that’s spreading across the country and around the world. In April, Groupon launched a Providence Web page, allowing restaurants, spas, specialty markets and countless other Rhode Island businesses in and around Providence to offer promotional deals online.
“We had an amazing response, way beyond what I ever imagined,” Yaffe said of the experience.
Groupon is sometimes described as a group-buying website, but it’s nothing like those that briefly blossomed and then died during the dot.com craze of the ’90s. The new site seldom offers deals on store goods; instead, the focus is on entertainment, experience and adventure. Users can try a new eatery or sign up for an aerobics class at a fraction of the usual cost; the businesses providing the service reach new customers, some of whom will likely become regulars.
“Groupon offers one deal a day in your area,” explained Julie Mossier, a consumer-marketing manager with the company. “It could be anything from skydiving classes, to an historical neighborhood tour to a restaurant dinner. For businesses, a Groupon deal is not about a quick burst of cash. It’s about meeting quality customers who become repeat traffic.”
Here’s how it works. To take advantage of Groupon deals, go to the website, www.groupon.com, and enter your e-mail address to subscribe. Each day, you’ll receive an e-mail describing the deal-of-the-day in your region. You can also browse for deals by visiting the pages for different cities.
For a deal to work, a certain number of users must sign up, which includes entering credit card information. The merchant decides how many customers he needs. Once that number is reached, coupons – called “groupons” – are e-mailed. If there are too few users, the deal is canceled. There’s no credit card charge until the deal is confirmed. Some customers have experienced difficulty using some coupons, but Groupon enthusiasts reply that’s usually because they didn’t follow conditions specific to each deal that are listed very visibly on the website.
“I purchased Groupons for places I would have gone anyway, got a huge discount, and both merchants made it very easy to redeem the Groupon,” said Katie Silberman of Providence, who signed up for discounts at a neighborhood cafe and a pottery-painting studio. “Both were great.”
Businesses featured on Groupon pay nothing if their deals are canceled. But if they reach the magic number and the deal goes through, Groupon gets half the price of the discount coupon. In Pawtucket, for example, users were offered a $20 meal at Garden Grille for just $10; Of that, the restaurant kept $5 and Groupon kept $5.
“You don’t make a profit on the Groupon deals,” explained Yaffe, who saw 900 people take up the offer. “It will actually end up costing me a few thousand dollars. But you get a reputation. And it’s an opportunity to get customer information. When people come in for the Groupon deal, we can talk to them about the restaurant, or give them a special questionnaire card.”
Other Ocean State businesses have experienced similar success. Tortilla Flats, a Providence restaurant, sold 750 coupons. The Foster Country Club sold 550 that offer 18 holes of golf for $25. Other Rhode Island deals have included massage therapy, a kayak tour and a visit to a day spa.
Cynics say the public appetite for Groupon bargains could abate when the economy improves, but right now it’s generating Internet buzz. Launched in Chicago in late 2008, the company has since expanded into dozens of cities across the U.S. and Europe.
“What we’re hearing from merchants is that they’re drawing the type of customers that make this worth doing,” said Mossier. •

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