Case Study: The Benefit of Being First

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When Google Offers launched in Washington D.C. last week, it did so with a $3 for $6 deal at Amsterdam Falafelshop in Adams Morgan. Restaurant CEO Arianne Bennett says she was impressed by the “do no evil” ethos that a Google rep explained to her when pitching the new product. This was not the first time Bennett has taken part in a daily deal company’s launch. Amsterdam Falafelshop also ran deals with Scoutmob and LivingSocial Instant Deals when their products were first introduced to the D.C. market earlier this year.

How did your deal on Google Offers come about?
They contacted us because they wanted to work with people in D.C. who were very high up in the food scene. We typically listen to the pitches that [daily deal companies] make, and if it seems like a company that we might want to partner with, then we ask them to come talk. Paul was their representative and he came and talked to us. We learned a couple of things about the deal and about the company that we liked. We didn’t know that Google was this company that was run by nice people who were kind of “do no evil.” They didn’t want to jam [our business] full of people; they didn’t want to take [customer] demographic information. That surprised us and made us feel warm and fuzzy about the company itself. We like to partner with people that we like. The second was that financially they made it easy on us in terms of the extended redemption period. The one-year redemption period was awesome because it means we don’t get all jammed up in one week.

Once you’ve been around for a while, we don’t really need to help you. You’ve got your shit together, you’re known. But we like to partner with people who are starting out.

How far ahead did you plan all this out?
It wasn’t longer than a couple of weeks, and we found out [that we’d be the launch merchant] the week before. It wasn’t like they called and said, “You’re going to be first.” It was like, “Do you mind being first?” We said we would be glad to be. We’re used to handling a lot of volume, so for us it’s easy to participate in deals like this.
So the fact you sold more than 1,500 coupons isn’t overwhelming?
We sell somewhere between 5,000 and 7,000 pitas a week, so I can pretty much handle anything. When we did the Scoutmob push previously we had about 1,800 people who came through in a week, and that’s on top of our normal customers, so it’s not a huge scare for us. Our style of cuisine and our style of our store set-up—with people filing in and out—is conducive to these types of deals.

Is it easier to negotiate on the terms of an offer because there are so many competing daily deal companies now?
I don’t think so. They each have their formula, and each one is different in how they do it. I don’t find that it’s a negotiating game, really. I mean, Groupon has never said to me, “Hey, you’ve done these deals now with LivingSocial, Scoutmob, and Google. Can we negotiate with you?” They do call and say, “Would you like to do a Groupon?” But the terms are going to be the same no matter what.

Have all the companies you’ve worked with offered the same 50/50 split?
No, everybody does a slightly different formula. You can talk to them about what the formula is, but each company seems to do it slightly differently. With Scoutmob they gave away a free falafel to everybody. They did that because they were launching themselves, and they wanted to do something big. We worked out an arrangement where we were compensated for what we needed to be compensated for and they [paid us for] the rest of it. You know, we take a small hit and they take a small hit, and it helped them with their launch.

So you were part of Scoutmob’s launch, too?
Yeah. [Our deal ran] on their opening week [in D.C.]. That’s really the thing. Once you’ve been around for a while, we don’t really need to help you. You’ve got your shit together, you’re known. But we like to partner with people who are starting out. When we first started out people really partnered with us to push customers to us in a very organic manner. Because of that, our restaurant is really successful. Now when a company comes to us and they say, “We’re launching in your area and we’d really like to do XYZ,” we take that much more seriously than if someone like Groupon, who’s already established in the area, comes to us. We were also part of the LivingSocial [Instant Deals] launch, when they did the “Take D.C. to lunch for a Dollar” deal four or five months ago. Again, they were starting out and that’s what was attractive to us.

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This interview has been edited for length and clarity.

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.