Austin Bakeshop’s Groupons Reward Existing Customers, Entice Newbies

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When newspaper and magazine ads failed to deliver the customers she’d hoped for, Olivia O’Neal turned to the web. As the co-owner of Sugar Mama’s Bakeshop, O’Neal has used group coupons and positive online reviews on sites like Yelp to help turn her from-scratch bakery into a dessert destination for foodies in Austin.

What is Sugar Mama’s Bakeshop and what makes it different from other bakeries?
We’re an all-dessert bakery in Austin, Texas, that is focused on making Americana-type desserts. I think what makes us different is the quality of ingredients that we use and the care that we put into our products. We purchase from an artisan point of view, as far as the types of ingredients we use. We buy local when possible; organic when possible. We just have a really dedicated team of people who really feel passionately about baking as a craft, as opposed to being just a production bakery.

How has the way you advertise changed over time?
We have tried print advertising in magazines, as well as in local newspapers, but we just haven’t felt that we’ve gotten a really good return there. We even tried to run some coupons [in newspapers] just to see if people were actually reading the advertisements, but after running a coupon in one very popular Austin paper that people advertise in, we had only two coupons come in — and we ran the advertisement for a month. If we do something on Twitter or on Facebook, then we see a really quick return from a much larger group.

What impact does location have on your advertising efforts? Are customers in Austin different from people in other cities?
I think so, yes. People in Austin are really local-centric. That is certainly something that is catching on, even in places further from Austin. People are really shunning the bigger chains and supporting the people who open startup businesses in their own communities.

I know you recently did a Groupon. What made you go that route?
Groupon has approached us several times. When they first approached us, they hadn’t really started in Austin yet and we were really unfamiliar with the concept. We wanted to get feedback from some of our peers about what they did first.

To be honest, we’re a small place and we were worried that we wouldn’t be able to support the demand. We didn’t want to let a lot of people down. So, we wanted to be sure that we were in a really good spot with our infrastructure and with our staffing to be able to take something like that on.

How has it worked out?
It has worked out really well. People have had a really positive response to it. People have been really friendly, excited, and passionate about trying us out. So it has been really, really good. I’m happy that we did it, and my staff has had a positive experience. Overall, the people who have come in have been really great.

What do business owners want from coupon sites, whether it’s Groupon, Living Social, or anything else?
We kind of approached it not just as a way to put ourselves in front of new customers but to reward our existing customers, too. We had quite a few people who have been in our shop since we opened purchase the Groupon, and they have come up and thanked us for it. They have even sent us emails saying, “We really appreciate this.”

There are certain people who purchase Groupons with a sense of entitlement. Like, they think, “I would never pay full price for this place,” or “Let’s see if they are really good.” They do sometimes come in with an attitude. We’ve definitely heard of that, and experienced it ourselves. But at the end of things, people are generally happy with the service or the product, and we haven’t had any negative feedback.

Sugar Mama’s has great reviews on Yelp. What impact has that had on your business overall?
I think Yelp has definitely had an impact, and for us we’ve had a largely positive experience with Yelp. But, I’m not the biggest fan of how Yelp works with the merchants who are written about.

Even though we have overwhelmingly positive reviews, we have had instances where we felt Yelp was obstinate. Their main focus is making money for them. It’s not really about making a community. So, from that viewpoint, I don’t love the site. But we’ve had some really great people and friends we’ve made through the site, so I find that to be pretty valuable.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.