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Smaller Operators Mixed on Daily Deals

Smaller Operators Mixed on Daily Deals

Are daily deals a boon or a bane for you? Technomic found a mixed bag of opinions from independent restaurants.

A recent survey by the Chicago-based research firm found that, among restaurants that participated in a third-party daily deal, just over half (51 percent) were pleased with the result and just under half (46 percent) thought the deal provided a good return on investment.
The research also revealed that over 40 percent of restaurants have done daily deals with multiple providers, indicating a lack of loyalty to any single source.

Restaurants that have not used a third party online daily deal believe other forms of promotion yield a better return. A common objection, according to the study, is high commission rates. (Groupon typically collects 30-50 percent of the revenue when someone purchases a deal.)
Another study by Technomic determined that daily deals are good at building a buzz and bringing in new guests. But some analysts think the field may be oversaturated.

“In this challenging environment, restaurants are more actively and objectively assessing which promotional tactics work best,” notes Bob Goldin, Technomic executive v.p. He adds that “restaurants are open to testing new tactics, including online daily deals, but require solid proof of performance before making any of them a permanent part of their marketing mix.”

The findings complement Technomic's Daily Deal Watch—Restaurant Diner Use, Attitudes and Intentions study.