Customers’ Responses to Social Couponing University... · Mike Montanari, VP, Strategic Accounts,...

Cornell Hospitality ReportVol 11 No 20 November 2011

Restaurant Daily Deals

Customersrsquo Responses to Social Couponing

by Sheryl E Kimes PhD and Utpal Dholakia PhD

Advisory Board

The Robert A and Jan M Beck Center at Cornell UniversityBack cover photo by permission of The Cornellian and Jeff Wang

Cornell Hospitality Reports Vol 11 No 20 (November 2011)

copy 2011 Cornell University This report may not be reproduced or distributed without the express permission of the publisher

Cornell Hospitality Report is produced for the benefit of the hospitality industry by The Center for Hospitality Research at Cornell University

Rohit Verma Executive DirectorJennifer Macera Associate DirectorGlenn Withiam Director of Publications

Center for Hospitality ResearchCornell University School of Hotel Administration489 Statler HallIthaca NY 14853

Phone 607-255-9780Fax 607-254-2922wwwchrcornelledu

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Raymond Bickson Managing Director and Chief Executive Officer Taj Group of Hotels Resorts and Palaces

Stephen C Brandman Co-Owner Thompson Hotels IncRaj Chandnani Vice President Director of Strategy WATGBenjamin J ldquoPatrickrdquo Denihan Chief Executive Officer

Denihan Hospitality GroupBrian Ferguson Vice President Supply Strategy and Analysis

Expedia North AmericaChuck Floyd Chief Operating OfficerndashNorth America

HyattGregg Gilman Partner Co-Chair Employment Practices

Davis amp Gilbert LLP

Tim Gordon Senior Vice President Hotels pricelinecomSusan Helstab EVP Corporate Marketing

Four Seasons Hotels and ResortsJeffrey A Horwitz Chair Lodging + Gaming and Co-Head

Mergers + Acquisitions ProskauerKevin J Jacobs Senior Vice President Corporate Strategy amp

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SAS InstituteGerald Lawless Executive Chairman Jumeirah GroupSteve Levigne Vice President US Strategy amp Insights

McDonaldrsquos CorporationMark V Lomanno CEO Smith Travel ResearchBetsy MacDonald Managing Director HVS Global Hospitality

ServicesDavid Meltzer Senior Vice President Global Business

Development Sabre Hospitality SolutionsWilliam F Minnock III Senior Vice President Global

Operations Deployment and Program Management Marriott International Inc

Mike Montanari VP Strategic Accounts Sales - Sales Management Schneider Electric North America

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Thank you to our generous Corporate Members

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ASAE FoundationCarlson HotelsHilton WorldwideMcDonaldrsquos USAPhilips HospitalitySASSTRTaj Hotels Resorts and Palaces

4 TheCenterforHospitalityResearchbullCornellUniversity

ExECuTivE SuMMary

Asurveyof931USconsumersfindsthatthosewhohavepurchaseddailydealsfromacasualdiningfast-casualorquick-servicerestaurantarenotnoticeablydifferentinbehaviororattitudesfromthosewhohavenotdonesoOnedifferenceinattitudesprovides insight into those who purchase social coupons they like to be ldquomarket

mavensrdquowhostayonthecuspofmarkettrendandpriceinformationThosewhopurchaseddailydealsweresignificantlymorelikelytobeyoungerbemarriedandhaveahigherincomethannon-purchasersOnbalance the study indicated that thebenefitsofofferinga social couponseemtooutweigh thedisadvantagesManyofthepotentialconcernsaboutofferingasocialcouponincludingpoortippingoverwhelmingthestaffandcustomerdisloyaltyarenotsubstantiatedTherewassomeevidenceofcannibalizationas44percentofthoseusingasocialcouponreportedbeingfrequentcustomersbutthecouponsalsobroughtback infrequentcustomersandattracteda substantialpercentageofnewcustomersMostcriticallymanyofthenewandinfrequentcustomerssaidtheywouldreturntotherestaurantandpayregularpricesaswellasrecommendtherestauranttofriendsNewcustomersinparticularwouldnothavetriedtherestaurantwithoutthedailydealofferAllcustomergroupssaidtheyconsideredtherestauranttobeagoodvalueevenwithoutthediscountoffer

RestaurantDailyDealsCustomersrsquo Responses to Social Couponing

bySherylKimesandUtpalDholakia

CornellHospitalityReportbullNovember2011bullwwwchrcornelledu 5

abouT ThE auThorS

Sheryl E Kimes PhD is Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell University School of Hotel Administration where she has also served as interim

dean (sek6cornelledu) In teaching restaurant revenue management yield management and food and beverage management she has been named the schoolrsquos graduate teacher of the year three times Her

research interests include revenue management and forecasting in the restaurant hotel and golf industries She has published over fifty articles in leading journals such as Interfaces Journal of Operations Management

Journal of Service Research Decision Sciences and Cornell Hospitality Quarterly She has served as a consultant to many hospitality enterprises around the world including Chevyrsquos FreshMex Restaurants Walt

Disney World Resorts Rubyrsquos Diners Starwood Asia-Pacific and Troon Golf

utpal Dholakia PhD is William S Mackey Jr and Verne F Simons Distinguished Associate Professor of Management at the Jesse H Jones Graduate School of Business at Rice University He has a masters degree in psychology and a PhD in marketing from the University of Michigan a masters degree in operations research from the Ohio State University and a bachelors degree in industrial engineering from the University of Bombay His research interests lie in studying motivational psychology of consumers and online marketing issues such as virtual communities and online auctions He also studies relational aspects of consumer behavior He has published in a number of marketing and management journals and consults with firms in financial services energy health-care and other industries


CornEll hoSpiTaliTy rEporT

OverthepastyearrestaurantoperatorsreportthattheyhavebeeninundatedwithsalespitchesfromsocialcouponcompaniestorundailydealsfortheircustomersWiththerisingpopularityofsocialcouponingrestaurateursinmanycategoriesareconsideringthebenefitsandconcernsconnectedtogroupdiscountpromotions

OntheplussidedailydealscanhelprestaurantstofillunusedcapacityandtointroducenewcustomerstotherestaurantOnthenegativesidethesteepdiscountsusuallyincludedindailydealsmayencouragedealseekerstopatronizetherestaurantinsuchnumbersthatfull-payingregularsaredisplacedduringbusyperiodsorregularcustomersmaybetemptedtousethediscountoffertherebycannibalizingexistingbusinessOtherissuessurroundingdailydealsincludethepossiblenegativeeffectsonserviceresulting from increased volume and on employee morale based on the perception that daily dealcustomersareldquocheaprdquoandwilltippoorly1

1OtherservicebusinessesfacesimilarissuesasexplainedinChekitanSDevLauraWinterFalkandLaureMougeotStroockldquoToGrouponorNottoGrouponATourOperatorrsquosDilemmardquoCornell Hospitality ReportsVol11No19(November2011)CornellCenterforHospitalityResearch




GiventheinterestindailydealspromotionswewantedtospecificallyinvestigatecustomersrsquoattitudestowarddailydealsInthisstudywesurveyedconsumerstofindoutwhichonesuserestaurantdailydealswhattheythinkaboutsuchdealshowtheyusethemandwhethertheyintendtoreturntotherestaurantinthefutureOtherthanafewproprietarystudiesondailydealuse2toourknowledgenopublishedre-searchoncustomerresponsetorestaurantdailydealsyetex-istsTheresultsofthisstudyshouldproveusefultorestaurantoperatorsintheirdecisionmakingregardingwhetherwhenandhowtoofferadailydeal

Inthisreportwewillfirstreviewthemajordailydealsitespopularintherestaurantindustryfollowedbyadiscus-sionoftheadvantagesanddisadvantagesofdailydealsWewillthenprovideabriefreviewoftherelevantliteratureondailydealsandcouponsSubsequentlywewilldescribeourcustomersurveyandpresenttheresultsWewillconcludewithadiscussionofhowrestaurantoperatorscanusetheresultsofoursurvey

RestaurantDailyDealCompaniesTherearetwobasictypesofdailydealsitesthatofferrestaurantindustrypromotionsgenericsitessuchasGrouponandLivingSocialandrestaurant-focuseddailydealsitessuchasOpenTableSpotlightRestaurantcomandSavored3Althoughthedealstructurevariesbysitethemajorityofoffersarediscountpromotionsforsomepercentagereductionfromastatedprice(usually40-to50-percentoff)Additionallysomedailydealsitesallowrestaurantstosetrestrictionsonwhentheoffercanbeusedautomaticallyincludeagratuityonthefull(non-discounted)amountofthebillandrequireaminimumexpenditureoverthefacevalueofthedealSuchrestrictionscanhelparestaurantoperatorbettermanagewhendailydealcustomers

2ldquoTechnomicFindsOnlineDailyRestaurantDealsDrivingPositiveConsumerBehaviorrdquohttpwwwtechnomiccomPressroomReleasesdynRelease_DetailphprUID=97viewedAugust142011andLarryFreed

ldquoNewDataGrouponampLivingSocialBringNewCustomers(andExistingOnes)rdquohttpwwwfreedyourmindcomfreed_your_mind201106new-data-groupon-and-living-social-bring-new-customershtmlviewedAugust1520113ForathoroughreviewofthedailydealindustrypleaseseeErikEliasonYohanesFrezgiandFatimaKhanldquoDailyDealsWhitePaperUnderstandingtheIndustryDynamicsofDailyDealsandImplicationsforMerchantsandConsumersrdquoHarvardBusinessSchool(2010)httpwwwslidesharenetHackStartupsgroup-buying-white-paperviewedAugust272011RipEmpsonldquoYipitrsquosDailyDealReportIndustryRevenueDipsGrouponGainsShareAndTravelDealTakesOffrdquoTechCrunch(2011)httptechcrunchcom20110825yipits-daily-deal-report-groupon-up-livingsocial-down-travel-deals-take-offviewedAugust282011JimSullivanldquoGettheMostOutofGroupDiscountsrdquoNations Restaurant News(2011)httpwwwnrncomarticleget-most-out-group-discountsviewedAugust142011andBradTuttleldquoHowCouponsBecameCoolrdquoTimehttpmoneylandtimecom20110606how-the-coupon-lost-its-dorky-penny-pinching-stigmaviewedAugust162011

dineattherestaurantbutsuchrestrictionsalsoriskdecreasingtheofferrsquosappealforconsumers

Inastudyof22000shoppersfromthetop100onlineretailers4Freedfoundthat51percentoftherespondentshadusedGroupon24percentLivingSocial14percentGoogleOffers10percentWootand7percenthadusedoneofseveralotherdailydealsitesAboutone-third(35)reportedthattheyhadneverpurchasedadailydealAbouttwo-thirdsoftherespondentswhohadpurchasedadailydealwereenrolledinatleastonedailydealemailsubscrip-tionprogram

WhileFreedrsquosresearchisnotspecifictotherestaurantindustrythedemographicsofrestaurantdailydealusersislikelytobesimilarDailydealuserstendtobebetween25and44yearsold(averageof43acrossalldailydealsites)haveanincomebetween$50000and$100000peryear(38)andbepredominantlyfemale(59)5

PotentialAdvantagesandDisadvantagesofDailyDealSitesAswementionedattheoutsetdailydealshaveadvantagesanddisadvantagesTheadvantagesincludebull Incremental customersDailydealcompaniesprom-

isetobringinadditionalcustomerswhomayreturntotherestaurantinthefutureArecentTechnomicconsumerstudyindicatedthat48percentofdailydealpurchaserswerenewcustomerswhileFreedrsquosconsumerstudyputthatnumberat35percent6InanearlierstudyofbusinessesthathadoffereddailydealscoauthorUtpalDholakiafoundthatabout80percentofcouponcustomerswerenew7

bull Increased revenue and profitGiventheincreaseintrafficdailydealsitesmayhelpincreaserevenueandprofitJustoverhalf(555)ofbusinessessurveyedintheDholakiastudyreportedthattheymademoneyonthedailydealand481percentstatedthattheywouldparticipateinadailydealpromotionagaininthefutureHoweverrestaurantoperatorswerenotassatisfiedwiththeperformanceofdailydealsTheper-centagereportingthatthedailydealwasprofitableforthemdroppedto436percentandonly359percentsaidtheywouldusethistypeofpromotionagaininthefuture

4Freedopcit5Ibid6IbidandTechnomicopcit7UtpalDholakialdquoWhatMakesGrouponPromotionsProfitableforBusinessesrdquoRiceUniversityWorkingPaper(2011)httppapersssrncomsol3paperscfmabstract_id=1790414viewedJuly72011


bull Brand equity erosionOfferingadailydealmaycausecustomerstothinklessoftherestaurantbecauseofitsuseofdiscountsleadingtoanerosionofitsbrandimage12

bull Poor customer matchDeal-seekersattractedbydailydealscouponsmaybedisproportionatelysensitivetopriceandwouldfailtoappreciatetherestaurantrsquosvaluepropositionSuchcustomersrarelyspendbeyondthedealrsquosfacevalueorreturninthefuture13

CouponStudiesPromotionsandcouponshavebeenwidelystudiedbyaca-demicsbutsincedailydealsitesarestillfairlynewlimitedresearchexistsonthisparticularformofpricepromotion14HoweverweseeseveralconceptsfromthecouponandpromotionsliteratureasbeingrelevanttothestudyofdailydealsAmongtheseareconsumersrsquoresponsetocouponsim-pulsivepurchasebehaviorrelationalorientationandmarketmavenbehavior

Coupon-responsive behaviorConsumerswhopur-chasedailydealoffersmaysimplybethetypeofcustomerswhoseektousecouponsfortheirpurchasesResearchhasshownthatconsumerswhoarevalueconsciousaremorelikelytousecoupons15Suchconsumersreferredtoasldquocou-ponpronerdquooftenusecouponsasasignofagooddealandmaynotevenconsiderthecostsavings16CouponproneisdefinedasahigherchanceofredeemingacouponbecauseitmakesconsumersfeelbetterabouttheirpurchaseValueconsciousnessisrelatedtocustomerswhowanttopaylowerpricesforaproductorservicegivenacertainlevelofquality

Wepredictthatdailydealpurchaserswillbemorecou-pon-responsivethannon-usersandwillshowbothhighercouponpronenessandhighervalueconsciousness

Impulsive purchasing behaviorDailydealusersmayalsobelessimpulsiveintheirbuyingbehaviorthannon-usersImpulsivebuyingisdefinedasacustomertendencytopurchasethingsinaspontaneousmannerwithoutneces-sarilythinkingofwhytheitemisbeingpurchasedSimi-

12BrandeauopcitSullivanopcit13BrandeauopcitHowardopcitSullivanopcit14PleaseseeDholakia2010opcitDholakia2011opcitandBen-jaminEdelmanSoniaJaffeandScottDukeKominersldquoToGrouponorNottoGrouponTheProfitabilityofDeepDiscountsrdquoHarvardBusinessSchoolWorkingPaper(2010)httpwwwslidesharenetfoodshoto-groupon-or-notviewedJuly23201115DonaldRLichtensteinRichardGNetemeyerandScotBurtonldquoDis-tinguishingCouponPronenessfromValueConsciousnessAnAcquisi-tion-TransactionUtilityTheoryPerspectiverdquoJournal of Marketing54(3)54-67(1990)16ValarieAZeithamlldquoConsumerPerceptionsofPriceQualityandValueAMeans-EndModelandSynthesisofEvidencerdquoJournal of Market-ing52(July1988)pp2-22

bull ExposureDailydealsitescanalsoserveasamarketingtooltohelprestaurantsincreasecustomerawarenessoftheirbusinessForexampleinacasestudyontheadoptionofaGrouponpromotionatastart-upcateringcompanytheauthorsfoundthattheexposurebenefitsoftheGrouponpromotionlastedwellafterthepromo-tionended8

Thepossibledisadvantagesincludebull CostManyoperatorshaveexpressedconcernsabout

thecostsassociatedwithdailydealsAlthoughthelargestvariablecostforarestaurantisthefoodcost(typicallyabout30)personnelcostscouldincreaseifbusinesspicksupandadministrativecostsassociatedwiththedailydealcouldalsoplayaroleEquallyimpor-tantdailydealsitestakeasignificantshareofrevenuemdashusually30to50percentofthefacevalueofthedeal

bull CannibalizationIffrequentcustomerstakeadvantageofthedailydealtherestaurantmaybecannibalizingitsregularcustomerswhowouldhaveeatenattheres-taurantandpaidthefullamountanywayStudieshaveindicatedthatthepercentageofdailydealuserswhoarealreadyfrequentcustomersrangesfrom30to40percent9

bull DisplacementIfalargenumberofdailydealpurchas-ersdecidetousetheirvoucherduringabusyperiodregularcustomerswhopayfullpricemaybedisplaced

bull Employee frustrationEmployeesareoftenconcernedthatcouponanddailydealusersarelikelytobeldquodeal-seekersrdquowhowillfailtotiponthegrossamountofthebill(andjusttiponthediscountedcheck)10Dholakiarsquosresearchhasfoundthatthemostimportantfactordriv-ingdailydealprofitabilityishowsatisfiedemployeesarewiththepromotion11

8UtpalDholakiaandGurTsabarldquoAStart-UpsExperiencewithRunningaGrouponPromotionrdquoRiceUniversityWorkingPaper(2011)httppa-persssrncomcol3paperscfmabstract_id=1828003viewedJuly82011andDholakia(2011)loccit9TechnomicopcitandDholakia2011loccit10MarkBrandeauldquoGroupDealGamblerdquoNationrsquos Restaurant News(2011)httpwwwnrncomarticlegroup-deal-gambleviewedAugust282011andHannahHowardldquoServedTheRestaurantCouponInvasionrdquoSeriousEats(2011)httpwwwseriouseatscom201105served-the-restaurant-coupon-invasionhtmlviewedAugust14201111UtpalDholakialdquoHowBusinessesFarewithDailyDealsAMulti-SiteAnalysisofGrouponLivingSocialOpenTableTravelzooandBuy-WithMePromotionsrdquoRiceUniversityWorkingPaper(2010)httpssrncomabstract=1863466viewedNovember232010andUtpalDholakia

ldquoWhyUnhappyEmployeesCanWreckPromotionalOffersrdquoHarvardBusi-nessReview2011httphbrorg201101why-employees-can-wreck-promotional-offersar1viewedJuly72011


larlydailydealusersmayalsobemoreconsciousoftheirspendingthannon-usersRicket alintroducedascaletomeasurecustomersrsquospendingconsciousnesstheTightwad-Spendthriftscale17Thisrankscustomersonan11-pointscaleinwhich1=tightwadand11=spendthrift

Wepredictthatdailydealuserswillbelessimpulsiveshoppersandthattheywillbemorelikelytobespendthriftsthannon-users

Market mavenFeickandPriceexaminedatypeofcus-tomerconsiderthemselvesasagoodsourceofinformationaboutnewproductsandservices18TheycalledthiscustomertypeMarketMavenswhoenjoyintroducingnewbrandsandproductstotheirfriendsWepredictthatdailydealuserswillhaveahigherlikelihoodofbeingaMarketMaventhannon-users

Relational orientationDailydealusershavebeenac-cusedofbeingfickleandonlyloyaltothenextdeal19Offset-tingthatfickletendencyiscustomerloyaltyCustomerswithahigherrelationalorientationliketobeloyaltocompaniesthattreatthemwell20Wepredictthatdailydealuserswillhavealowerrelationalorientationthannon-users

SurveyResultsWeconductedanonlinesurveyofUSadultswhohadpurchasedarestaurantdailydealwithinthepast3monthsWesetthatthree-monthlimitforrespondentsbecausewewereconcernedthatpeoplemightnotclearlyremembersomethingthathadoccurredbeforethattimeForthesakeofcomparisonwealsosurveyedsamplesofUSadultswhohadneverpurchasedarestaurantdailydealandthosewhohadpurchasedadealbutnotinthepreviousthreemonthsWorkingwithawell-respectedsurveypanelcompanytoobtainoursampleweconductedoursurveyinAugust2011andreceivedatotalof931responsesApproximatelyone-third(31)ofrespondentswhostartedthesurveyhadpurchasedadailydealSincethefocusofourresearchwasondailydealusersweusedaquotasampletobesurethatabouttwo-thirdsofoursamplehadpurchasedarestaurantdailydealandone-thirdhadnotdoneso

Therespondentswerefairlyequallysplitbetweenmalesandfemales(45to55)Abouthalfoftherespondentswere45yearsofageorolder(18-24925-342235ndash441745ndash542255-6419and65orolder11)Themajority(59)ofsubjectsweremarriedandabouttwo-

17ScottIRickCynthiaECryderandGeorgeLoewensteinldquoTightwadsandSpendthriftsrdquoJournal of Consumer Research346(2008)767-78218LawrenceFFeickandLindaLPriceldquoTheMarketMavenADiffuserofMarketplaceInformationrdquoJournal of Marketing511(1987)83-9719BrandeauopcitHowardopcitandSullivanopcit20UtpalDholakialdquoHowCustomerSelf-DeterminationInfluencesRe-lationalMarketingOutcomesEvidencefromLongitudinalFieldStudiesrdquoJournal of Marketing Research431(2006)109-120

Exhibit 1

respondentsrsquo demographic profile

Gender non-users users

FemaleMale 5743 5446

age non-users users

18-24 51 107

25-34 134 261

35-44 166 169

45-54 239 213

55-64 255 159

65+ 156 91

Marital Status non-users users

Single 252 274

Married 551 614

Widowed 45 23

Divorced 153 89

income non-users users

lt$25K 242 151

$25 - 50K 322 252

$50 - 75K 220 234

$75 - 100k 14 16

$100 - 150K 45 14

$150K+ 29 7

location non-users users

Urban 185 269

Suburban 436 536

Small town 182 85

Rural 197 107

number of Children non-users users

0 688 609

1 153 185

2+ 160 207

thirds(64)hadnochildrenathomeAbouttwo-thirdshadafamilyincomebelow$75000peryearwhile18percenthadanincomeofover$100000peryearThemajorityofrespondentslivedinanurbanorsuburbanarea(urban24suburban50)


Exhibit 2

Type of restaurant visited

Quick service Fast casual Casual upscale casual Fine dining

50

45

40

35

30

25

20

15

10

5

0

Exhibit 3

restaurant customersrsquo dining party

60

50

40

30

20

10

0 Spouse or partner Family no one Friends

Exhibit 4

how restaurant was chosen

past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0

DemographicProfileDailydealusersweresignificantlymorelikelytobeyoungerbemarriedhaveahigherincomeandliveinanurbanorsuburbanarea21Therewerenosignificantdifferencesinusagebygenderorbythenumberofchildreninthehouse-hold(Exhibit1)

21Weusedone-wayANOVAtoanalyzethedataAllresultsreportedassignificantwerestatisticallysignificantattheplt005level

DailyDealExperienceWeusedarecallmethodinwhichweaskedrespondentstodescribethelastrestaurantdailydealtheyhadpurchasedAftertheydescribedthedailydealtheyhadpurchasedweaskedavarietyofquestionsabouttheirexperiencewiththedailydeal

Type of restaurantAbouthalf(47)ofthedailydealofferspurchasedwereforcasualrestaurantswithanother


third(32)forquick-serviceorfast-casualrestaurantsOnly6percentofthedailydealspurchasedwereforfine-diningrestaurants(Exhibit2)

Who they went withMostrespondentswereaccompa-niedbytheirfamily(52)orspouseorpartner(15)Only12percentwentwithfriends(Exhibit3)

How they chose the restaurantThemostcommonreasongivenforchoosingaparticularrestaurantwaspastex-perience(53)followedbyconvenientlocation(40)theavailabilityofapromotion(38)andprice(32)(Exhibit4)

Number of deals purchased during the past yearAbouttwo-thirdsoftherespondentshadpurchasedbetweenoneandfourrestaurantdailydealsinthepreviousyearThirty-fivepercentrecalledpurchasingoneortwodealsand30percenthadpurchasedthreeorfourcouponsAbout7percenthadpurchasedmorethantenrestaurantdailydealpromotions(Exhibit5)

Relationship with the restaurantOnly22percentoftherespondentssaidthattheywerenewcustomersAbout44percentofrespondentswerealreadyfrequentcustomersandtheremaining34percenthadbeentotherestaurantbeforebutdidnotconsiderthemselvesregularcustomers(Exhibit6)Basedonthesepercentagesinouranalysiswerefertothesecustomergroupsasldquonewrdquoldquofrequentrdquoandldquoinfrequentrdquo

TippingOneoftheconcernsraisedregardingdailydealcustomersisthattheymaytiponthenetamountof

Exhibit 5

number of deals purchased in prior twelve months

40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6

patronage status at daily deal restaurant

new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7

Tip behavior (based on check size)

Frequent patron infrequent patron new patron

100

90

80

70

60

50

40

30

20

10

0

Full check net check no tip other calculation


thecheckratherthanthefullvalueoramountbeforethediscountOurresultsprovideevidencethatthisfearisunfoundedparticularlyfornewcustomers22Inthistip-pinganalysisweeliminatedquick-serviceandfast-casualrestaurantstoavoidconfoundingdataAhealthypercentageoftheremainingcustomersreportedthattheytippedonthefullvalueamountofthedealWefoundthatnewcustomersweresignificantlymorelikelytotiponthefullamountofthebill(877)followedbyfrequentcustomers(853)andinfrequentcustomers(831)(Exhibit7)

FrequencyofDiningOutRegardlessofthetypeofrestaurantdailydealusersweresignificantlymorelikelythannon-userstopatronizearestaurantwhetherforlunchordinnerOverhalf(547)ofdailydealuserswentoutforlunchordinneratleastonceaweekwhileonlyaboutone-third(349)ofrespondents

22NotehoweverthatbecausethisisasurveyofcustomersthereisanissueofsocialdesirabilityofresponsesinthesensethatrespondentsmaybelesslikelytoadmitthattheytippedpoorlyornotatallwhenusingthedailydealeveniftheydidsoAssuchthisresultshouldbetreatedasapreliminaryresultindicativeofthecustomerrsquossideofthetippingstory

Exhibit 8

Frequency of dining out

Daily deal user

non user

35

30

25

20

15

10

5

0 less than once a 2-3 times once a 2-3 times Daily once monthly month a month week a week

Exhibit 9

respondentsrsquo awareness and use of daily deal sites

100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0

whohadnotpurchasedadailydealreportedthatkindofpatronagefrequencyRespondentswhodinedoutmorefre-quentlypurchasedsignificantlymoredailydeals(Exhibit8)

DailyDealSitesUsedWeaskedrespondentstoindicatetheirlevelofaware-nessanduseofelevendifferentdailydealsitesNearlyallrespondents(942)wereawareofGrouponandsub-stantialpercentagesknewaboutRestaurantcom(827)LivingSocial(795)andTravelZoo(541)LessthanhalfofrespondentswerefamiliarwithGiltCityOpenTableBuyWithMeBlackboardEatsDailyCandyScoutMoborEverSaveWealsoaskedrespondentswhichofthesesitestheyhadusedGrouponwasthemostfrequentlyusedsite(798ofrespondents)followedbyTravelZoo(575)andRestaurantcom(505)(Exhibit9)

WealsoaskedrespondentstotelluswhichofthedailydealsiteswastheirfavoriteThisgaveusaldquoheartsharerdquometricforeachsitewhichwedefineastheproportionoftherespondentswhodesignatethedailydealsiteastheirfavoriteGrouponhasbyfarthelargestheartshareat423whichismorethantwiceasmuchasthenextdailydealsiteRestaurantcom(169)InterestinglytheheartshareofLivingSocialisrelativelysmallatjust74(orjustoverone-sixththevalueofGroupon)followedbyOpenTable(63)andeversave(54)(Exhibit10)

DailyDealEvaluationRespondentswerethenpresentedwithtenstatementsabouttheirdailydealexperience(seeExhibit11)andasked

Exhibit 10

Daily deal sitesrsquo ldquoheart sharerdquo

Exhibit 11

Statements used for restaurant daily deal evaluation

1 During my visit I was treated like a second class citizen because I used the daily deal

2 I spent more at this restaurant than I usually spend for a meal when eating out

3 I would (not) have gone to this restaurant had it not offered the daily deal

4 I will recommend this restaurant to my family and friends

5 The fact that this restaurant offered a daily deal makes me think less of it

6 I intend to visit this restaurant again in the future even if I have to pay full price

7 I ordered more items than I usually do because I was using the daily deal

8 I intend to visit this restaurant again only if it offers a daily deal

9 This restaurant would be a good value even without the daily deal

10 Overall I was very satisfied with my dining experience at this restaurant


Spending and ordering behaviorOverallthere-spondentsreportedthattheyspentandorderedaboutthesameastheyusuallydidHoweverfrequentcustomersweresignificantlymorelikelytospendmorethanusual(420)ascomparedtoinfrequentcustomers(370)andnewcustom-ers(363)Inadditionfrequentcustomersweresignificantlymorelikelytoordermorethanusual(443)ascomparedtoinfrequentcustomers(363)ornewcustomers(392)(Exhibit12)

Service experienceSincetherehasbeendiscussionaboutwhetherdailydealusersaretreatedaswellasfull-payingguestsweaskedrespondentsabouttheirdiningexperienceaskingthemtoindicatewhethertheyweretreatedlikesecond-classcustomersorwhetherthefactthattherestaurantofferedadailydealcausedthemtothinklessoftherestaurantNeitheroftheseconcernsprovedtobeanissueAsawholerespondentsdidnotfeelthattheyweretreatedlikesecond-classcustomers(frequentcustomers281infrequentcustomers205newcustomers215)nordidthefacttheyhadreceivedadiscountmakethemthinklessoftherestaurant(frequentcustomers262infrequentcustomers176newcustomers179)(Exhibit13)

Cannibalization and new customersRespondentswereaskedwhethertheywouldhavegonetotherestaurantwithoutthedailydealOnbalancerespondentswerestilllikelytovisittherestaurantevenifithadnotofferedthedailydeal(Frequent436Infrequent439New425)(Ex-hibit14)Frequentcustomersweresignificantlymorelikelytogoevenwithoutthepromotion(517)thaninfrequent

Exhibit 12

Spending and ordering behavior

new

infrequent

Frequent

Spent more ordered more

7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2

1 Second class Think less

Exhibit 13

perception of service experience

new

infrequent

Frequent

7

6

5

4

3

2

1 Would have gone without the deal visited without the deal

Exhibit 14

Cannibalization and new customers

toindicatetheirlevelofagreement(1=stronglydisagree7=stronglyagree)ThewordingfornewcustomerswaschangedslightlytoreflectthefactthattheyhadnotbeentotherestaurantbeforeWethencomparedtheresponsesofthenewcustomersthefrequentcustomersandtheinfre-quentcustomers


customers(441)Newcustomerswereunlikelytohavegonetotherestaurantwithoutthedailydeal(298)

SatisfactionTherewerenosignificantdifferencesinsatisfactionlevelsamongthedifferentfrequencygroupsandrespondentswerequitesatisfiedwiththeirexperienceduringthevisitwhentheyredeemedthedailydeal(frequent596infrequent584new584)Frequentcustomersweresignificantlymorelikelytoconsidertherestauranttobeagoodvalueevenwithoutthedailydeal(537)thaninfre-quent(489)ornewcustomers(452)(Exhibit15)

new

infrequent

Frequent

7

6

5

4

3

2

1 Good value even without the deal very satisfied

Exhibit 15

Satisfaction with restaurant

new

infrequent

Frequent

recommend visit at full price

Exhibit 16

behavioral intentions

Behavioral intentionsRespondentsinallthreegroupswereequallylikelytorecommendtherestauranttofriends(frequent571infrequent558new541)andsaidtheywouldreturntotherestauranteveniftheypaidfullprice(frequent564infrequent522new487)(Exhibit16)

NoDealWeaskedtherespondentswhohadneverpurchasedarestaurantdailydealwhytheyhadnotdonesoThemostfrequentreasonswerethattheydidnotknowaboutthem

Exhibit 17

reasons for not using a daily deal

50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1


Construct itemsCronbachrsquos

alpha

buying impulsiveness

I often buy things impulsively

848I buy things according to how I feel at the moment

ldquoBuy now think about it laterrdquo describes me

Sometimes I am a bit reckless about what I buy

Tightwad-Spendthrift Scale

Which of the following descriptions fits you better (1 = tightwad 11 = spendthrift)

Market Maven

I like helping people by providing them with information about many kinds of products

868My friends think of me as a good source of information when it comes to new products or services

I like introducing new brands and products to my friends

relational orientation

When I find a brand I like I tend to remain loyal to it for a long time

832I like to develop long-term relationships with products and brands I like

I am loyal to companies that treat me well

value Consciousness

When purchasing a product I always try to maximize the quality I get for the money I spend

839When I buy products or services I like to be sure I am getting my moneyrsquos worth

I always check prices at the grocery store to be sure I am getting the best value for the money I spend

Coupon proneness

I enjoy using coupons regardless of the amount I save by doing so

690I am more likely to buy brands for which I have a coupon

Coupons have caused me to buy products that I normally would not buy

Exhibit 18

Scale items used

7

6

5

4

3

2

1 Deal non-user Deal user

Exhibit 19


(46)thattheyhadneverthoughtofit(28)andthatdailydealswerenotavailableintheirareaEventhoughsomewritersinfoodblogshavesaidtheywouldfeelguiltyaboutusingsuchacouponbecauseofthepotentialnegativeimpactontherestaurantonly2percentofourrespondentsavoidedusingdailydealsbecausetheywerebadforthebusi-nessandnonefeltguiltyaboutusingthem(Exhibit17)

FactorsDrivingChoiceWealsowantedtoseewhatcustomerpersonalitytraitswereassociatedwithdailydealpurchaseRespondentswerepre-sentedwithseventeendifferentstatementsaboutsixdifferentcharacteristicsandaskedtoindicatetheirlevelofagreementwitheachona7-pointscale(asshowninExhibit18)

BuyingimpulsivenessisaconsumerrsquostendencytobuyspontaneouslyunreflectivelyandimmediatelyContrarytoourexpectationsdailydealpurchaserswerelikelytohaveahigherbuyingimpulsivenessthannon-dailydealpurchas-ersDailydealusersrsquobuyingimpulsivenesswas361onthe7-pointscaleonwhichnon-usersaveraged340(Exhibit19)

Lookingatthe11-pointTightwad-Spendthriftscale1indicatesdifficultyspendingmoney(Tightwad)while11signifiesdifficultycontrollingspending(Spendthrift)We


betweenthetwogroupsinvalueconsciousness(users569non-users562)butdailydealusershadahigherpropensi-tytousecoupons(users485non-users432)(Exhibit23)

ImplicationsBasedonourresultsitseemsthatdailydealshelpgeneratenewcustomerswhoaresatisfiedwiththeirexperiencelikelytoreturntotherestaurantandlikelytorecommendittotheirfriendsWealsofoundthatdailydealuserswerenotnecessarilyldquocheaprdquoandunlikelytotiponthefullamountandthatdailydealuserswerenolesslikelytobeloyalthannon-users

New customers and cannibalizationAlthoughsomecannibalizationofexistingcustomersmaybeoccurringourresultsclearlyshowthatdailydealsbringinnewcustomers

Exhibit 20

Spendthrift-Tightwad Scale

Deal non-user Deal user

T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22

relational orientation (restaurant loyalty)

in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2


foundnosignificantdifferencesbetweenusers(596)andnon-users(573)intermsofspendingpatterns(Exhibit20)

OurassumptionaboutdealbuyersrsquowishtobeontopofmarketandpriceinformationprovedtobecorrectDailydealusersweresignificantlymorelikelytobeamarketma-ven(493)thannon-users(426)(Exhibit21)

OntheotherhandourpredictionaboutloyaltywasnotsupportedDailydealusershavebeenaccusedofbeingfickleandonlyloyaltothenextdealbutourresultsshowthatthisisnotthecaseTherewasnosignificantdifferenceinrelationalorientationbetweenusers(536)andnon-users(529)(Exhibit22)

Weproposedthatdailydealuserswouldhavehighervalueconsciousnessandcouponpropensitythannon-usersThiswasasplitverdictTherewerenosignificantdifferences

7

6

5

4

3

2

1 value consciousness Coupon propensity

non-user

user

Exhibit 23

value consciousness and coupon propensity


dealsonlyattractdeal-seekerswhowillnotreturntotheres-taurantiftheydonotgetadiscountsimilartotheonethatattractedtheminthefirstplaceAgainourresultsshowedthatthesefearsmaybeoverstatedInsteadthenewandinfrequentcustomerswhomwesurveyedstatedthattheycouldseethevalueofferedbytherestaurantwithnormalpricingandtheywerelikelytoreturntotherestauranteveniftheyhadtopaythefullbill

Onaveragedailydealuserswerejustasvalueconsciousasnon-usersbuttheywerenomorelikelytobeldquotightwadsrdquothannon-usersOnedifferencewedidnoticeintermsofspendingpatternsisthatdailydealuserstendtobemoreimpulsiveasbuyersWeinferthatrestaurantsmaybeabletocreatesuccessfulopportunitiesforsuggestivesellingwhichbenefitsboththecustomer(whoreceivesevengreatervaluefromtheexperience)andtherestaurant(whichboostsaver-agecheck)

Anothercommonconcernnamelythatdailydealuserswillfailtotipappropriatelyalsomaybeoverstatedparticu-larlyfornewcustomersWefoundthatabout85percentofallcustomerssurveyedreportedthattheytippedonthefullamountofthebillratherthanthediscountedamountMore-overnewcustomersweresignificantlymorelikelytotiponthefullamountofthecheckthanwereinfrequentguests(mostofwhomneverthelessalsotippedonthefullbill)Howeverwecautionthatthisisaself-reportthatshouldbeconfirmedbyfurtherresearch

FinallysomeoperatorsbelievethatdailydealusersarefickleandwillonlyhaveloyaltytothenextdealOurresultsshowedthattherewasnosignificantdifferenceinthisregardbetweendailydealusersandnon-usersThisimpliesthatbothdailydealusersandnon-usersmayexhibitsimilarloyaltypatterns

Inconclusionalthoughwecannotrecommendthatarestaurateurusedailydealsoravoidusingthemwecansaythatmanyofthenon-economicconcernsareoverstatedBasedonthisstudyitappearsthatdailydealcustomersarenotallthatdifferentfromregularcustomersexceptthattheyliketotrynewthingsandtheyappreciateadealThesecustomersliketofeelthattheyareaheadofthecurveonmarkettrendsandonceyouhaveprovidedthemwithgoodvaluetheywillbejustasloyalasothercustomergroupsThusitseemsfairtosaythatawelldesignedcoupondealwillbenefitboththerestaurantoperatorandcustomerOurnextstudywillexaminetheexperienceofrestaurantopera-torswithdailydealndashtypepromotionsn

While44percentofthedailydealpurchasersinoursamplewerealreadyregularcustomerstheother56percentofrespondentswereeithernew(22)orinfrequentcustomers(34)oftherestaurantwheretheyusedthedailydeal

Intent to return and recommendTwoparticularlyhopefulfindingsarethatthenewcustomerswereunlikelytohavegonetotherestaurantwithoutthedailydeal(297)butwerelikelytovisittherestaurantagaineveniftherestaurantdidnotofferanotherdeal(486)Thesenewpatronsalsowereinclinedtorecommendtherestauranttotheirfriends(547)Notsurprisinglyfrequentandinfrequentcustomerswerelikelytohavegonetotherestaurantevenwithoutthedailydeal(frequent518infrequent452)andtheyalsowerelikelytoreturntotherestaurantevenwithoutadailydeal(frequent565infrequent539)andrecommendtherestauranttotheirfriends(frequent588infrequent576)

SatisfactionDailydealusersregardlessoftheirprevi-ouscustomerstatuswerequitesatisfiedwiththeirexperi-enceandalsothoughtthattherestauranttheypatronizedwasagoodvalueevenwithoutthedailydealGiventhatcustomersatisfactionhasbeenlinkedtoafirmrsquosprofitabil-itycustomersatisfactionofthistypemayleadtoincreasedrestaurantrevenue

OverstatedConcernsInsummaryletrsquosspecificallyaddresstheconcernsaboutdailydealsitesthatwetestedOurresultsshowthatsomeoftheconcernsmaybeoverstated

CannibalizationGiventhat44percentoftherespon-dentswerealreadyfrequentcustomersoftherestaurantwecanconcludethatsomecannibalizationmaybeoccurringamongthesecustomerssincetheysaidthattheywerelikelytogototherestaurantdealornodealConsequentlyforadailydealtobeprofitablethispossiblecannibalizationmustbeoffsetagainstanyincrementalrevenuethatmaybegeneratedfromthenewcustomersplusstepped-uppatron-agefrominfrequentcustomersFortunatelywehavestrongindicationthatthedealdidattractnewcustomersandalsobroughtbackinfrequentpatrons

Brand equityOurresultsdidnotsupporttheconcernthatcustomersmaythinklessofarestaurantifitoffersadailydealTothecontraryrespondentsofferedfavorablecommentsabouttherestaurantandtheirdiningexperienceAlsonotsupportedwastheideathatdailydealuserswouldfeelliketheyaretreatedlikesecond-classcitizens

Customer type attractedTheldquodealseekerrdquoconcernalsowasnotsupportedThisinvolvestheconcernthatdaily


The Executive Path Hospitality Leadership Through Learning

Complete program information and applications available online

wwwhotelschoolcornelleduexecedPhone + 1 607 255 4919 Email exec_ed_hotelcornelledu

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Vol11No3Compendium2011

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2011 ProceedingsVol3No7ImprovingtheGuestExperiencethroughServiceInnovationIdeasandPrinciplesfortheHospitalityIndustrybyCathyAEnzPhD

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Publication Indexwwwchrcornelledu


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Cornell Center for Hospitality ResearchPublication Index

wwwchrcornell edu

Advisory Board

The Robert A and Jan M Beck Center at Cornell UniversityBack cover photo by permission of The Cornellian and Jeff Wang

Cornell Hospitality Reports Vol 11 No 20 (November 2011)

copy 2011 Cornell University This report may not be reproduced or distributed without the express permission of the publisher

Cornell Hospitality Report is produced for the benefit of the hospitality industry by The Center for Hospitality Research at Cornell University

Rohit Verma Executive DirectorJennifer Macera Associate DirectorGlenn Withiam Director of Publications

Center for Hospitality ResearchCornell University School of Hotel Administration489 Statler HallIthaca NY 14853

Phone 607-255-9780Fax 607-254-2922wwwchrcornelledu

Niklas Andreacuteen Group Vice President Global Hospitality amp Partner Marketing Travelport GDS

Rarsquoanan Ben-Zur Chief Executive Officer French Quarter Holdings Inc

Scott Berman Principal Real Estate Business Advisory Services Industry Leader Hospitality amp Leisure PricewaterhouseCoopers

Raymond Bickson Managing Director and Chief Executive Officer Taj Group of Hotels Resorts and Palaces

Stephen C Brandman Co-Owner Thompson Hotels IncRaj Chandnani Vice President Director of Strategy WATGBenjamin J ldquoPatrickrdquo Denihan Chief Executive Officer

Denihan Hospitality GroupBrian Ferguson Vice President Supply Strategy and Analysis

Expedia North AmericaChuck Floyd Chief Operating OfficerndashNorth America

HyattGregg Gilman Partner Co-Chair Employment Practices

Davis amp Gilbert LLP

Tim Gordon Senior Vice President Hotels pricelinecomSusan Helstab EVP Corporate Marketing

Four Seasons Hotels and ResortsJeffrey A Horwitz Chair Lodging + Gaming and Co-Head

Mergers + Acquisitions ProskauerKevin J Jacobs Senior Vice President Corporate Strategy amp

Treasurer Hilton WorldwideKenneth Kahn PresidentOwner LRP PublicationsKirk Kinsell President of Europe Middle East and Africa

InterContinental Hotels GroupRadhika Kulkarni PhD VP of Advanced Analytics RampD

SAS InstituteGerald Lawless Executive Chairman Jumeirah GroupSteve Levigne Vice President US Strategy amp Insights

McDonaldrsquos CorporationMark V Lomanno CEO Smith Travel ResearchBetsy MacDonald Managing Director HVS Global Hospitality

ServicesDavid Meltzer Senior Vice President Global Business

Development Sabre Hospitality SolutionsWilliam F Minnock III Senior Vice President Global

Operations Deployment and Program Management Marriott International Inc

Mike Montanari VP Strategic Accounts Sales - Sales Management Schneider Electric North America

Shane OrsquoFlaherty President and CEO Forbes Travel GuideThomas Parham Senior Vice President and General Manager

Philips Hospitality AmericasChris Proulx CEO eCornell amp Executive EducationCarolyn D Richmond Partner Hospitality Practice Fox

Rothschild LLPSusan Robertson CAE EVP of ASAE (501(c)6) amp President of

the ASAE Foundation (501(c)3) ASAE FoundationMichele Sarkisian Senior Vice President MaritzJanice L Schnabel Managing Director and Gaming Practice

Leader Marshrsquos Hospitality and Gaming PracticeTrip Schneck Managing Partner District Hospitality PartnersK Vijayaraghavan Chief Executive Sathguru Management

Consultants (P) LtdAdam Weissenberg Global Travel Hospitality amp Leisure (THL)

Leader Deloitte amp Touche USA LLP


Senior Partners





ExECuTivE SuMMary






abouT ThE auThorS



















































Exhibit 1




age non-users users

18-24 51 107

25-34 134 261

35-44 166 169

45-54 239 213

55-64 255 159

65+ 156 91


Single 252 274

Married 551 614

Widowed 45 23

Divorced 153 89


lt$25K 242 151

$25 - 50K 322 252

$50 - 75K 220 234

$75 - 100k 14 16

$100 - 150K 45 14

$150K+ 29 7


Urban 185 269

Suburban 436 536

Small town 182 85

Rural 197 107


0 688 609

1 153 185

2+ 160 207



Exhibit 2



50

45

40

35

30

25

20

15

10

5

0

Exhibit 3


60

50

40

30

20

10


Exhibit 4


past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0












Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu


Senior Partners





ExECuTivE SuMMary






abouT ThE auThorS



















































Exhibit 1




age non-users users

18-24 51 107

25-34 134 261

35-44 166 169

45-54 239 213

55-64 255 159

65+ 156 91


Single 252 274

Married 551 614

Widowed 45 23

Divorced 153 89


lt$25K 242 151

$25 - 50K 322 252

$50 - 75K 220 234

$75 - 100k 14 16

$100 - 150K 45 14

$150K+ 29 7


Urban 185 269

Suburban 436 536

Small town 182 85

Rural 197 107


0 688 609

1 153 185

2+ 160 207



Exhibit 2



50

45

40

35

30

25

20

15

10

5

0

Exhibit 3


60

50

40

30

20

10


Exhibit 4


past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0












Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu


ExECuTivE SuMMary






abouT ThE auThorS



















































Exhibit 1




age non-users users

18-24 51 107

25-34 134 261

35-44 166 169

45-54 239 213

55-64 255 159

65+ 156 91


Single 252 274

Married 551 614

Widowed 45 23

Divorced 153 89


lt$25K 242 151

$25 - 50K 322 252

$50 - 75K 220 234

$75 - 100k 14 16

$100 - 150K 45 14

$150K+ 29 7


Urban 185 269

Suburban 436 536

Small town 182 85

Rural 197 107


0 688 609

1 153 185

2+ 160 207



Exhibit 2



50

45

40

35

30

25

20

15

10

5

0

Exhibit 3


60

50

40

30

20

10


Exhibit 4


past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0












Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu


abouT ThE auThorS



















































Exhibit 1




age non-users users

18-24 51 107

25-34 134 261

35-44 166 169

45-54 239 213

55-64 255 159

65+ 156 91


Single 252 274

Married 551 614

Widowed 45 23

Divorced 153 89


lt$25K 242 151

$25 - 50K 322 252

$50 - 75K 220 234

$75 - 100k 14 16

$100 - 150K 45 14

$150K+ 29 7


Urban 185 269

Suburban 436 536

Small town 182 85

Rural 197 107


0 688 609

1 153 185

2+ 160 207



Exhibit 2



50

45

40

35

30

25

20

15

10

5

0

Exhibit 3


60

50

40

30

20

10


Exhibit 4


past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0












Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu













































Exhibit 1




age non-users users

18-24 51 107

25-34 134 261

35-44 166 169

45-54 239 213

55-64 255 159

65+ 156 91


Single 252 274

Married 551 614

Widowed 45 23

Divorced 153 89


lt$25K 242 151

$25 - 50K 322 252

$50 - 75K 220 234

$75 - 100k 14 16

$100 - 150K 45 14

$150K+ 29 7


Urban 185 269

Suburban 436 536

Small town 182 85

Rural 197 107


0 688 609

1 153 185

2+ 160 207



Exhibit 2



50

45

40

35

30

25

20

15

10

5

0

Exhibit 3


60

50

40

30

20

10


Exhibit 4


past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0












Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu


Exhibit 2



50

45

40

35

30

25

20

15

10

5

0

Exhibit 3


60

50

40

30

20

10


Exhibit 4


past experie

nce

locatio

n

promotion

price

Cuisine

Good reviews

recommendations

from fri

ends

Family fri

endliness

60

50

40

30

20

10

0












Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu








Exhibit 5


40

35

30

25

20

15

10

5

0 1-2 3-4 5-6 7-8 9-10 11+

Exhibit 6


new customer

22

Frequent customer

44

infrequent customer

34

Exhibit 7



100

90

80

70

60

50

40

30

20

10

0






Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu





Exhibit 8


Daily deal user

non user

35

30

25

20

15

10

5


Exhibit 9


100

90

80

70

60

50

40

30

20

10

0

aware

use

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

Groupon


0

5

10

15

20

25

30

35

40

45

Groupon

restaurantc

om

livingSocia

l

openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

10

5

0





Exhibit 10


Exhibit 11
















Exhibit 12


new

infrequent

Frequent


7

6

5

4

3

2

1

new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 13


new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu


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5

10

15

20

25

30

35

40

45

Groupon

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livingSocia

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openTable

Eversave

blackboard Eats

Daily Candy

ScoutMob

buyWithMe

TravelZoo

Gilt City

45

40

35

30

25

20

15

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5

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Exhibit 10


Exhibit 11
















Exhibit 12


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7

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7

6

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Exhibit 13


new

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7

6

5

4

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Exhibit 14






new

infrequent

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7

6

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Exhibit 15


new

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Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

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Donrsquot like

coupons

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business

Feel guilty

7

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value Consciousness




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Exhibit 18

Scale items used

7

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Exhibit 21

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Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu





Exhibit 12


new

infrequent

Frequent


7

6

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4

3

2

1

new

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7

6

5

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Exhibit 13


new

infrequent

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7

6

5

4

3

2


Exhibit 14






new

infrequent

Frequent

7

6

5

4

3

2


Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


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in

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7

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Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu




new

infrequent

Frequent

7

6

5

4

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Exhibit 15


new

infrequent

Frequent


Exhibit 16




Exhibit 17


50

45

40

35

30

25

20

15

10

5

0

Didnrsquot know

never thought

of it

not availa

ble

in m

y area

businesse

s

not appealin

gDonrsquot l

ike

buying online

Would receive

poor service

Donrsquot like

coupons

uncomfortable

with

coupons

bad for th

e

business

Feel guilty

7

6

5

4

3

2

1



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

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rif

t

7

6

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7

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non-user

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Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu



alpha








Market Maven








value Consciousness




Coupon proneness




Exhibit 18

Scale items used

7

6

5

4

3

2


Exhibit 19










Exhibit 20



T

igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

3

2


Exhibit 21

Market Maven Scale

in

cr

ea

si

ng

M

ar

ke

it

M

av

en

Exhibit 22


in

cr

ea

si

ng

l

oy

al

ty

7

6

5

4

3

2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu





Exhibit 20



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igh

tw

ad

S

pe

nd

th

rif

t

7

6

5

4

3

2

1

7

6

5

4

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Exhibit 21

Market Maven Scale

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ar

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av

en

Exhibit 22


in

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l

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al

ty

7

6

5

4

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2






7

6

5

4

3

2


non-user

user

Exhibit 23























Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu






















Success

AdvancingBusiness

andPersonal





























































wwwchrcornell edu


























































wwwchrcornell edu

Customers’ Responses to Social Couponing University... · Mike Montanari, VP, Strategic Accounts,...

Documents

Transcript of Customers’ Responses to Social Couponing University... · Mike Montanari, VP, Strategic Accounts,...