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Daily deals work—and not just once, Technomic finds

A new consumer-behavior study refutes many of the criticisms routinely leveled by restaurateurs at daily-deal services like Groupon and Living Social.

The report found that the e-mail offers can indeed land repeat visits from new customers. The Technomic data shows that 73% of the people who buy the deal coupons have eaten fewer than two times at the restaurant extending the bargain. The finding contradicts the contention of many operators that the deals are typically purchased by existing patrons, in effect lowering how much a place gets from customers who would’ve visited anyway.

The study also reveals that 67% of the consumers who purchase one of the restaurant discounts will return to that establishment without a daily discount. Critics of Groupon and its competitors say they can lose money because they’re giving something away to consumers they’ll never see again. They contend that there’s no chance to amortize the cost of the discount over multiple visits.

Technomic also discovered that eight out of 10 users of the daily deal will recommend the issuing restaurant to family or friends, and that 34% will talk about the place via citizen-reviewer services like Yelp or Zagat. About 25% will write about the restaurant on their Facebook page, the Chicago researcher said.

“The fact that 85% of consumers plan to continue to purchase online restaurant deals and 79% look forward to receiving them is a strong indication of the impact the online daily deal business is having,” said Technomic executive vice president Bob Goldin. 

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