Longtime KCC readers know I’ve been an admirer and staunch defender of Groupon from the get-go…
When some of you guys zeroed in on the discounting – saying it cheapens the seller’s products – I pointed to the marketing benefits. I quoted local restaurant and nightclub owners that had done well with Groupon and vowed to continue to party with the daily dealmaker.
People like Jardine’s owner Beena Raja (who’s on her third last name in the past year). Jardine’s, like others, turned its back on the local newspaper’s trusty-but-rusty Star Dining Card and found nirvana instead in Groupon’s mass email blasts.
"Let me tell you, Groupon has a solid clentele, they are up to 350,000 people locally now," Raja told me last March. "And these people are no Star Card people – these are people who will spend money and I’ve seen it. They’re younger, hipper, they know how to tip and they make reservations. I have nothing but positive things to say about Groupon."
That was then…
Today Groupon’s email list for KC today is reportedly nearly 700,000 strong but Raja’s washing her hands of it.
"I’ve changed my mind," she says. "I don’t think I’ll do it again."
"The first Groupon I did was about 1,600 deals and the second one I did was 1,100, I believe," Raja says. "But this last time the type of people we got were not the same as the first time. They didn’t tip the servers. They were always complaining and trying to match their checks to the penny and not spend any more than the Groupon was for. And they were arguing about the policy and telling us we must honor it. We had a lot of complaints."
Part of the problem being restaurants like Jardine’s mostly benefit when customers come in stay and enjoy the jazz.
Unfortunately, that often wasn’t the case.
"They would come in and want their food to go instead of staying, enjoying the music and having a drink," Raja says. "You know, the whole ambiance we’re trying to sell. I think the quality (of Groupon) is gone. It’s more about the quantity now."
Therein lies the problem…
When Groupon first hit KC, early adopters were younger, hipper, Web wise sorts. The kind of clientel smaller boutiques like Jardine’s are totally out to reach. But as it grew from 50,000 to 100,000 to 400,000 and to its now gargantuan proportions, the hipness factor appears to have been dilluted by the cheapskate factor.
"They’re not cool and hip anymore," Raja says. "They used to be cool and hip. Just the whole attitude and the dynamics of the people who buy Groupons has changed. They just came in and yakked away during shows. And a lot of the first Groupon people were my regulars who I didn’t have to discount, so I wasn’t really gaining any new customers.
"The other people who came in didn’t care about jazz or anything. They just wanted the food and if I’d box it up for them, they’d take it with them. They’re not going to come back. Maybe 10 percent will come back. I mean, that’s a lot of money to give away to get just 10 percent back."
The $64 million question: How happy will the KC Symphony be when a buncha yahoos and hoo hahs show up – cellphones blaring away – mostly because they saved 51 percent on tickets to its Christmas Festival?
Raja’s bottom line: "You have to know what works for you and what doesn’t. And right now Groupon definitely doesn’t work for me."