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Groupon has been getting a lot of viral attention lately, good and bad. First the news that they sold $11 million in $25 coupons (worth $50) on a promotion for The Gap, then a story of woe from a café that couldn’t handle the deal they made with Groupon (only $6 for a $13 value), neither on the front nor back end. No problems for the former that can handle the volume and probably (Groupon doesn’t advertise their split) made over $5 million in up-front cash on the deal. The latter, however, had problems paying the vig on what amounted to a high-interest, short-term loan. So is this online retail darling a godsend for struggling restaurants, or is it little more than high-tech loan sharking?

If you haven’t heard of it yet, Groupon is a wildly successful discount coupon company, offering a daily deal in your area by email, Facebook or Twitter. To take advantage of the offer, you purchase a coupon from Groupon at a discount of the face value (usually 40%-60%) and, if enough are sold, you can redeem it at the local retailer, often a restaurant, within the next few months.

Sounds great, right? As a consumer I definitely agree; my favorite cost is less or free. I recently bought a Groupon for $25 that is worth $50 at The Gap. And I wasn’t the only one – they sold more than 400,000 of them. I often purchase them for local restaurants. As a restaurant owner, however, I would seriously question the decision. Not only does Groupon take a hefty split, but they do not share the purchasers’ information, cutting of a vital lifeline to leads for future marketing efforts. I can see why they are said to be valued at over $1Billion – a recent study estimates that an email address alone is worth $948 in potential revenue, and they apparently have 18 million of ‘em.

But back to the loan-shark quip. A typical deal at a decent restaurant in my area is to pay $35 for $70 worth of food and drink (tax and tip not included). I had dinner a few nights ago at The Foundry on Melrose with that exact Groupon.

As you can see, 1565 of them were purchased. If the split was 50%, that means Groupon and The Foundry each made roughly $27,000 up front. This is probably nice for both parties, and many of these deals sell 2000-4000 units. One of the difficulties for the restaurant, though, is that they now must honor the Groupons that can be worth over $100,000. Even if their cost of goods and services is only 50% of the value, they are paying back a loan of $27K with $55K.

Now I know it’s not exactly a loan, and I’m sure most restaurants would welcome 1500 patrons over the next few months. I would like to know if any of the restaurants have data on the number of new clients, return clients, follow up visits, etc. One of the flaws that I see happening when the database is overlooked, is that there is rarely any follow up. Of the several restaurants where I have used a Groupon, only one had the systems in place to follow up with me, and I was happy to fill out a nice card with my email address and Twitter and Facebook handles. Looking at it from another perspective, in this example they are paying Groupon $27K for one-time access to a database instead of spending resources to grow long-term relationships.

I really enjoyed my time at The Foundry; great food, great service and I spent an additional $125 with tax and tip because I wanted the Chef’s Tasting Menu. I even had a nice, casual chat with the chef, Eric Greenspan, about the restaurant business in LA and NYC. I will take the time to follow up with him and his restaurant through social media and in-person, but if they would have ensured it there would be no danger of it slipping my mind.

Props to Groupon for making good use of social media resources. I don’t wish them any ill will, but restaurants could cut them out as middle men and manage a campaign through social media that would be more effective. One idea that comes to mind is to build a network of a few thousand fans or followers and regularly incentivize them. With location and time-sensitive deals, both sides would be engaged. Granted, this does not put $27,000 in their pocket today, but the $100,000 doesn’t leave their pocket as quickly either. More important, though, is the connection with the client. Building relationships with repeat diners. Oh, and database ownership.

I was watching a slick film on influencers and started thinking about how I make my buying decisions (watch the film at end of post). There is a lot of hype lately about “influencers” in social media as if it is a new and exciting concept. Monitoring platforms like Radian6 , Sysomos, Alterian, and Synthesio all tout the importance of detecting who is talking about your brand and how influential they are. Hootsuite includes Klout scores on their profiles, and Twitter makes recommendations on whom to follow based on a reputation score that they calculate on all users (they aren’t disclosing these scores yet, but if they do it might render Klout obsolete?). The value of influencers is nothing new, however. They have always been important, just ask Heather Locklear and Faberge from the 80’s

“Social” influence has always been everywhere, not only online (at least since high school). Elihu Katz and Paul Lazarsfeld wrote a book outlining the importance of influencers called “Personal Influence” in 1955. I have always developed and adjusted my tastes and opinions by having an open mind with others, especially those that I trust and admire.

When I speak with clients or friends about the importance of influencers online, they often think that it is complicated and difficult to develop a strategy targeting them. I would agree, because the strategy should be to listen and engage with them for mutual benefit, not to “target” them. An example I like to relate in my offline life is a friendship with Steve Moyer, who is currently a celebrity. Though he was a friend before the fame, I have noticed that for some reason I am more generous and open with people I meet through him. We recently went to see Pavement and Sonic Youth at the Hollywood Bowl with a few of his friends that I didn’t know and, though I don’t need validation of my tastes, I was very happy that we shared common interests. When I attended his wedding to Anna Paquin, I was a sponge for the opinions of others even though I knew nothing about them personally.

Though this realization makes me feel a bit superficial, I gained a great deal from my openness at the wedding. My wife and I were seated at a table with Anna’s sister Katya and her partner Russel Norman, who is a Co-Leader of the Green Party in New Zealand. He and I got into a conversation about the local and sustainable food movement here in Los Angeles, how his country views Americans, and farming in New Zealand. I was suffering from a bit of sensory overload so I hardly remember the specifics of our discussion. What I do remember though, is that he liked the book “The Omnivore’s Dilemma” by Michael Pollan and I hadn’t read it. I was already interested in the topic, but had not planned on reading the book. I really liked the film Food, Inc., I shop at the local Farmers’ Market, and I keep threatening to visit local farms and buy meat and produce directly from them; I felt that was plenty of involvement. Because of my connection with these influencers, though, I immediately purchased the book and loved it. Now it comes up in my conversations with others pretty regularly. I’m sure some of them have bought the book as a result.

The key for businesses is to get people to try new things, or something they wouldn’t have thought of. For restaurants this can translate into healthy increases in revenue through new customers and regulars going more often. Millions of people share their thoughts and opinions online everyday. Research shows 80% of Internet users trust this information over any other media source. Once influencers are identified, the only difficult part for businesses is to really listen and make the commitment to the relationship. After that it’s pretty simple, really. I was influenced. And like Heather I told two friends and so on and so on. Enjoy the film.

INFLUENCERS FULL VERSION from R+I creative on Vimeo.