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From Restaurant Start Up & Growth Magazine. Used properly, and tracked, discounting can be one of the most effective methods for restaurants to use to create new customers, and turn them into loyal regulars. But it’s important to understand that, if you use discounts to attract new customers, it’s up to you to keep them coming back. You’ve got to make sure that you and your staff give your customers a first-class experience when they try out your establishment, or you’ll likely never enjoy them as regular customers. You need to aim your marketing message to the right people, and make sure that your message speaks to them in a way that prompts them to act. Remember, discounts are cash and the last thing you want to do is throw cash out the window. So before you move forward with any discount or coupon program, have a clear idea of who you’re going after, and how you’re going to get to them.
“You’ve really got to think about image and a discount format that’s appropriate for your identity in the marketplace,” says Julien Recoussine, owner of Seattle-based Flavor of the City Inc.
A Real Deal
The next thing to think about is which type of discount is going to work best for your restaurant. Flip through any coupon book or direct mail packet and, chances are, you’ll see a range of offers. Some of the most common
include:
- 10% to 50% off an entree
- Buy one entree, get one free.
- Free appetizer/dessert with purchase.
While there’s no exact science to choosing the offer that’s going to reap the best results, Recoussine says there’s a good rule of thumb that all restaurateurs should keep in mind. “Don’t be a cheapskate. The worst thing for a restaurant to communicate, whether it’s an inexpensive diner or gourmet bistro – is an attitude of being cheap to your customers,” he said.
“Remember,
discounts are supposed to attract new customers and
encourage the existing ones to come back more often.”
Spread the Word
Once you’ve decided which type of coupon will best suit
you, you need to think about how you’re going to
distribute the deal. Should you take out an ad in your
local newspaper? Or distribute them on your own via
mail, or maybe e-mail? Or, perhaps, you should rely on
the distribution capabilities and expertise of a company
that specializes in targeted marketing and/or discount
programs.
Calculate Your ROI
Regardless of what type of offer you decide on, and
which distribution method you plan to use, there is one
thing that is critical to any marketing campaign that
includes discounts: You’ve got to measure the results.
Unlike many other advertising and promotions tactics,
discounts offer the crucial advantage of allowing you to
track the return that you get for your investment.
Discounts allow you to know exactly how the customer
found out about you, and how much they spend when they
come into your restaurant.
It’s imperative that you understand your break-even
point to accurately track your return on investment.
For instance, if your average guest check is $50 and you
spend $1,000 to publish a coupon in a newspaper, you
will need 20 parties to come in with that offer to
recover your advertising costs. But you also need to
factor in the food costs of these visits to get a true
break-even point of direct costs.
In this case, the break-even point is $1,350. So if your
20 parties spend only $1,350 or less, then you’ve either
made no money or lost money. And the true profit will be
if you provide a level of service, quality, and value
that prompts these people to come back again.
Train the Wait Staff
A final and sometimes overlooked issue to consider
when adding discounts into your marketing mix is how
you’re going to educate your wait staff on the program.
Your frontline workers need to understand the rules and
restrictions associated with the discount, how to
process the discount properly so that ROI can be
calculated, and encouraged to upsell appetizers, drinks,
and desserts to those using a coupon or discount for
their meal. There’s nothing more frustrating or
embarrassing to a restaurant patron trying to take
advantage of a discount offer than wait staff members
who refuse to accept a discount because they don’t
recognize it, or who process the discount incorrectly
because they don’t understand the program. |
