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Is this pure gold? Your brainstorming/feedback is requested!

by westhope84
13 replies
Here's the set up:

A monthly paid membership site that features a hip, upscale LOCALLY owned "Restaurant of the Month" every month.

Monthly membership is $9. Members get:

-$18 off a $40 dollar or greater purchase (excluding alcohol) at the restaurant of the month. Limit one use per month.

-A 1 in 10 chance every month of winning a $40 gift certificate to the restaurant of the month. This is the twist that I'm excited about.

Lets say I launch with 1,000 members. The first monday of the month, I will go to the featured restaurant of the month and purchase $4,000 dollars worth of gift certificates (100x$40 certicificates; enough to award 1 in 10 members a $40 certificate). This would really help the restaurant justify their $18 off any purchase of $40 or more and move a tremendous amount of traffic and potential new customers through the door.

My members would be notified by email that they've won and asked to actually go to the restaurant of the month to pick up their gift certificates.

After literally hundreds of hours of research and brainstorming, I feel like this might be the best idea I've ever had for marketing local restaurants.

I feel the incentives are there for both restaurant and member. I'm positive that I would join such a membership site. A 1 in 10 shot at a $40 gift certificate is pretty alluring, especially on top of a $9 for $18 deal. Also, I like to support locally owned restaurants. Who wouldn't want to be a part of the "Foodie Crew?" Ha!

I love the idea of a paid membership site. The best way I can think of to get members at this point is a lot of strategic facebook marketing redirected to a sales page.

I'm a technical idiot and will need to hire a pro to design my site and FB page. I would imagine that there are ways to automate a lot of the processes necessary to run a site like this.


What do you think? Is this a winner? I covet your feedback!
#brainstorming or feedback #gold #pure #requested
  • Profile picture of the author epark732
    Interesting idea. Getting your members would probably be the hardest part.

    The concept is good but it would definitely require some serious effort.

    I like it though
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  • Profile picture of the author ltrain_riders
    I don't see why this method couldn't work if deployed properly. Getting local members would be the hardest part and even harder if you're in a smaller city.

    How did you come up with the membership cost of $9 and restaurants willing to give $18 off orders of $40+? That 45% off an order.

    Have you gone around to any local restaurants to gauge their interest and collect ideas from them? For a project like this, working closely with restaurants will be your best friend and chance for success. They can even help you bring in customers by promoting your site.
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  • Profile picture of the author Aaron Doud
    I was going to write a larger reply but I will stick with a smaller one.

    1. Resturants will be hard to sell on taking a chance of giving 45% discounts. That would be a loss on every dinner. Also how many of your members would have came in anyways without the massive discount? You need to focus on what is in it for the resturants otherwise it will never take off.

    2. You need to keep your costs to get new members low and make sure your churn is low as well. With maximum $5 per month profit off a member with reasonable rates for both you should be able to make a nice middle class income off this if you don't hired anyone somewhere around the 2,000 member mark. Do you think you can make it to 2,000 members within 48 months? If so this could be worth it.
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  • Profile picture of the author westhope84
    ltrain,

    The $9 for $18 is based off research of perceived value for the customer and pricing strategies of most restaurants. I feel it works for both, but I certainly do plan on talking to owners and potential members about the offer to ensure I'm in the sweet spot.

    The fact that I'm goin to be purchasing thousands of dollars of gift cerrtificates from the restaurant of the month will really sweeten the deal for them.

    The big question is how to get 1,000 members paying $9 a month?

    I think it may be a good idea to delay launch until 1,000 members have signed up to encourage members to spread the word in order to start saving.
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  • Profile picture of the author DaniMc
    I don't think the money lies in charging members. The money lies in getting the restaurants to pay you as an advertising platform. You may need to rework the numbers.

    You are making a classic mistake. This is a great idea but it doesn't start with a NEED. You must meet a need of whoever is giving you the money.

    In this scenario, the restaurant needs more business, so they should be paying you. The customer can get special deals and coupons almost anywhere for free.

    If you could get several thousand users, you could then charge the restaurant for the ability to offer a coupon to your membership. They do this now by paying for print advertising.

    You could offer your audience at a very low price point and feature a different restaurant every day of the week. Of course, you would charge more for weekend promotions.

    I would personally start this off as a free service to everyone. The restaurants can promote for free. This will help you build a critical mass of advertisers AND users. Then, when you have several thousand users, you begin charging the advertisers to promote to your audience.

    Not to mention, you advertise other local services and products to the user base while they are looking at the special offers.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by Dan McCoy View Post

      I don't think the money lies in charging members. The money lies in getting the restaurants to pay you as an advertising platform. You may need to rework the numbers.

      You are making a classic mistake. This is a great idea but it doesn't start with a NEED. You must meet a need of whoever is giving you the money.

      In this scenario, the restaurant needs more business, so they should be paying you. The customer can get special deals and coupons almost anywhere for free.

      If you could get several thousand users, you could then charge the restaurant for the ability to offer a coupon to your membership. They do this now by paying for print advertising.

      You could offer your audience at a very low price point and feature a different restaurant every day of the week. Of course, you would charge more for weekend promotions.

      I would personally start this off as a free service to everyone. The restaurants can promote for free. This will help you build a critical mass of advertisers AND users. Then, when you have several thousand users, you begin charging the advertisers to promote to your audience.

      Not to mention, you advertise other local services and products to the user base while they are looking at the special offers.
      You said it before I had a chance. Yup, the restaurant pays you.

      And the OP started like many others "Launch with 1,000 members". Really?
      Like that's a simple first step. Have you ever tried to sell memberships? Even free ones? You'll need to send a million e-mails, or send 100,000 postcards, or make 25,000 cold phone calls to get that number.

      A website, promoting the idea, Facebook PPC ads, ads on local websites, and a great list already...and you are on your way.
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      • Profile picture of the author westhope84
        Claude,

        Of course I've never tried to sell memberships. Why else would I flippantly mention launching with 1k members?

        Duh.

        ;-)
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  • Profile picture of the author misterme
    You might get some members. I can't say it's such a great concept. I could be wrong. But it seems to me if I look at successful membership concepts, such as Costco, and applied it to your idea, then your members would pay a small annual fee that gives them restaurant dinners almost at cost, at numerous restaurants to select from.

    Your concept though has them paying $108 a year to get 50% off only one restaurant a month, and that will be a restaurant not of their choosing. So you're going to be dealing with whether they want that restaurant's cuisine, ambiance, whether they care for the crowd there or not... and hope they wish to gamble on a perpetual one in ten shot of winning a small prize of 40 bucks for some other restaurant they may not care for. I wouldn't go for that deal at all. I can save more by going through Groupon, but you may want to test it small.

    I'd do it this way: I'd get lots and lots of members for free. Then I'd arrange dinner deals for them with the restaurants that pay me a percentage of the gross I bring in. Just like a club pays a promoter.
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  • Profile picture of the author helisell
    I've had 10 years doin' this stuff and gazillions of expensive mistakes later I really feel for you.

    How many restaurants have you approached who gave a firm commitment?
    How many restaurant goers have you approached who gave a firm commitment?

    Get those 2 answers. Extrapolate the effort/response and you'll KNOW instantly whether this is a flyer or a dud.

    These days I stop myself launching ANYTHING until I KNOW whether it's a goer or not.

    Save a lot of tears. Trust me.

    I hope you get a very favourable response but don't just run with it because YOU or ANYONE ELSE thinks it's a good idea. Get some real commitments and then you'll KNOW.

    Good luck.
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    • Profile picture of the author DaniMc
      Originally Posted by helisell View Post

      I've had 10 years doin' this stuff and gazillions of expensive mistakes later I really feel for you.

      How many restaurants have you approached who gave a firm commitment?
      How many restaurant goers have you approached who gave a firm commitment?

      Get those 2 answers. Extrapolate the effort/response and you'll KNOW instantly whether this is a flyer or a dud.

      These days I stop myself launching ANYTHING until I KNOW whether it's a goer or not.

      Save a lot of tears. Trust me.

      I hope you get a very favourable response but don't just run with it because YOU or ANYONE ELSE thinks it's a good idea. Get some real commitments and then you'll KNOW.

      Good luck.
      This is such a great suggestion.

      You never know anything will work until the market says so and even then its not certain.

      The most important first step is to create a Minimum Viable Product. What is the easiest, cheapest version of this you can produce so you can do some testing?

      Only if that works, then you take the feedback you are getting and begin to improve the product according to what the MARKET wants.
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  • Profile picture of the author DarrenRM
    Def start by offering it free to users. I honestly can't imagine someone paying for something they have never heard of and which has no existing credibility or proof of ROI. I run a website very similar to what you are describing, and I am building a mailing list of users who are interested in menus and exclusive voucher codes.

    The real value will be in leveraging the site traffic and mailing list numbers to the restaurants. I will have something they don't because none of them know anything about internet marketing. That's how my niche is - full of old fashioned offline business owners who don't have a clue about online - an untapped market for me.

    I never start something like this with my hand out before I've proved there is a demand
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  • Profile picture of the author zoro
    Why not do it the other way round. Offer the restaurants membership to reach your subscribers?
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