By Cindi Avila
Special to DNAinfo
CHELSEA — Manhattan's restaurants and shops are finding a new ally in the bid to get noticed by hip young tastemakers — an online discount services site called "Groupon."
The site has helped drive countless new customers to budding young restaurants like Terri, Chelsea's newest vegetarian restaurant, which was inundated with more than 3,000 takers for their half-off discount coupon featured on Groupon on June 9.
"We only have one location, so we're not like Subway where you can use your Groupon at several convenient locations,” said Terri's owner, Craig Cochran, who said business had been slow but steady since the restaurant's opening in February until the sudden spike from Groupon.
Cochran, 32, said sales jumped 40 percent in the days following the offer, and said the boost in customers was worth the trade off of having to absorb the $15,000 in food and staffing costs it took to keep up his end of the promotion.
Customers paid Groupon $5 each for a gift certificate that offered $10 in vegetarian food from Terri, and Groupon kept the $5 customers paid as a service charge.
Groupon keeps an average of half of the promotion price, but businesses say the payoff is worth it, because of the success so far in attracting new customers' attention and keeping them interested.
Since Groupon hit New York in March 2009, it has accumulated 338,000 local daily followers. Customers receive a newsletter with one featured business per day, and have 24 hours to purchase the discounted special, which ranges from a restaurant deal to a spa day to discounted concert tickets, Groupon spokeswoman Julie Mossler said.
Dave Perlman, owner of Essex on the Lower East Side, offered Groupon customers a $15 price tag for $30 worth of Jewish-Latin Fare at his restaurant.
They sold 1502 coupons for the deal — more than the 1,000 he initially hoped for.
"It exceeded my expectations," Perlman said.
He said he picked up the bill for customers' $30 worth of food, but most customers ordered extra items beyond the special, helping his restaurant to net about $14,000 in profits from the deal.
"They are saving $30 but spending an extra $10 or more to treat themselves," Perlman said. "It worked out really well and any loss was minimal in comparison to the gain."
Owners are also impressed with the "high quality clientele" who flock to the online site.
"We never heard of this place until Groupon, so we signed up and got the Groupon,” said 25-year-old Amy Biondo-Adkins, a massage therapist who traveled from Williamsburg to cash in her coupon at Terri.
Gary Ho doesn't normally travel to Chelsea from his apartment in Kensington, Brooklyn just for a sandwich. But after seeing Terri's menu on Groupon, he decided to give it a shot.
"I usually wouldn't go out of way to go here," said Ho, 19, who said a bite of the faux bacon chicken ranch sandwich was enough to hook him for a return trip. "It's organic and vegetarian and it's actually really good.”
Richele Benway, owner of The Local Store, a wine bar in Midtown East, also found her turn on Groupon in April to be a smart move.
"Groupon turned out to be huge for us,” Benway said, after her discount coupon attracted 800 takers.
"I had been researching placing ads and found them to be expensive considering I would have no way of tracking the ad's effectiveness. With Groupon, I did not have to pay to place an ad, and everyone that was interested and saw the ad purchased a coupon which meant they would definitely be coming in," she said.
The coupon also had an unexpected benefit. "I was surprised by the number of people who came in, who told us they saw us on Groupon but had not purchased a coupon,” Benway said.
Julie Mossler, Groupon's public relations manager, points out while those who buy the coupon are initially looking for a good deal, they also have money to spend. "Our customers are primarily female, highly educated and earn more than $100,000 a year. It's the demographic every merchant wants to reach."
Cochran said that the great word-of-mouth and trendy cache made the outlay of money he sacrificed for the promotion worth it.
"All I was hoping to accomplish was to have more people try our food,” Cochran said, “ and we've certainly achieved that.”
