Local Business Gets Its Group On

A blog, tweets and Facebook “friends” have become standard operating procedure for small business owners eager to reach out to customers. However, one local business has experimented with “Groupon” to expand its customer base.

, the meal preparation studio formerly in Maplewood and now in South Orange, made its first Groupon offering in late December.  “It is exciting, very exciting,” says owner Mary Smith to be the first in town to try a new business strategy.  

 of Livingston  who runs the LivingRichwithCoupons website explains how it works from the consumer point of view. “Each day Groupon offers a different deal for restaurants, spas, salons, stores and more.  If you like a deal, you sign up but you have to wait until enough people have "tipped" the deal.  Once it's "tipped" everyone gets it at the discounted price.  If the deal does not generate enough interest, you are not charged,” she says.

Discounts can be generous, Livesey notes. Montclair’s Costanera Restaurant recently offered a $35 menu for $15, for example, and Elevation Burger, also in Montclair, made a foray into Groupon this week, offering $20 of food for $10.

"You are exposing your brand to more people," said Matt Jerkovich, an owner of Elevation Burger. "The hope is that they enjoy the experience and will return."

He said this was the business' first attempt at Groupon, so he has "no real idea what to expect in regards to the outcome."

Smith said that she researched and thought carefully before crafting such an offer. A business-savvy friend talked it through with her, and Smith concluded that it made sense. Dinnersmith, she explains, is tried-and-true, with five years experience. At the same time, the Dinnersmith moved to its Irvington Ave. location in late fall and changed its model. Instead of customers assembling their meals from prepared ingredients, they now pick up the components of the meal, chopped, washed, ready to go. Smith decided that Groupon was a way of showcasing the new locale and setup.

According to the website, Groupon negotiates huge discounts—usually 50 percent to 90 percent off—with popular businesses. Groupon sends the deals to subscribers in its free daily email.

Only last year, Forbes magazine called Groupon the "fastest growing company ever."

Founded by Andrew Mason, a 29-year-old music major from Northwestern, Groupon is based in the Chicago area but has expanded to several cities and regions across the United States, including northern New Jersey.

The general idea is that Groupon features one incredible deal every day—such as 50 percent off a spa visit—but one that will only occur if a certain number of people sign up for it.

From the customer point of view, says Livesey, such offers have “great appeal because they have the ability to offer huge discounts on products and services.” She also sees the other side of the equation, noting, “The deals are definitely a great way to get people in the door.”

Smith agrees; her recent experience was a success, with some 600 meals sold in about a day. Customers paid Groupon online, she notes, so the transaction is complete from that perspective. What pleased Smith, she says, is that new customers called to find out more about Dinnersmith. One woman, familiar with the Dinnersmith concept, didn’t do the Groupon offer. Instead, she set up a standing delivery order to her specifications.

Groupon is not for everyone, cautions Smith, who knows exactly what her meals cost and what the margin is on each. She considered the proposition for several months before moving ahead.  Still, Smith knew from her own experience as a customer that there are deals to be had; she tried Groupon for the first time this fall. What did she, a professional foodie, buy? Gourmet items?  Wine?  Cooking equipment?  She smiles. “Pilates.”