CHR

Hospitality Leadership Through Learning
CHR

Restaurant Daily Deals: Customers’ Responses to Social Couponing

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Vol 11 No 20
By: Sheryl E. Kimes Ph.D. and Utpal Dholakia Ph.D.

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Executive Summary:

A survey of 931 U.S. consumers finds that those who have purchased daily deals from a casual dining, fast-casual, or quick-service restaurant are not noticeably different in behavior or attitudes from those who have not done so. One difference in attitudes provides insight into those who purchase social coupons: they like to be “market mavens,” who stay on the cusp of market trend and price information. Those who purchased daily deals were significantly more likely to be younger, be married, and have a higher income than non-purchasers. On balance, the study indicated that the benefits of offering a social coupon seem to outweigh the disadvantages. Many of the potential concerns about offering a social coupon, including poor tipping, overwhelming the staff, and customer disloyalty, are not substantiated. There was some evidence of cannibalization, as 44 percent of those using a social coupon reported being frequent customers, but the coupons also brought back infrequent customers and attracted a substantial percentage of new customers. Most critically, many of the new and infrequent customers said they would return to the restaurant and pay regular prices, as well as recommend the restaurant to friends. New customers in particular would not have tried the restaurant without the daily deal offer. All customer groups said they considered the restaurant to be a good value, even without the discount offer.

For more information about this research, view commentary from Sherri Kimes here.

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