In business 13 years on Cape Cod, Massachusetts (seasonal resort area with a strong 10 week summer season and a very, very long and slow winter trade)
Year 1&2 - Experienced steady growth, first two years.- all word of mouth (Annual gross 300K)
Year 3 - leveled off completely
Year 4 - started bold BOGO (Buy one get one free) direct mail coupon inserts (valpak, newspapers, etc) during 9 months of off season. No restriction or limitations to confuse or irritate potential guests.
Year 5,6,7,8,9, - increased traffic and gross 10% each year (increased net even more than 10% after meeting fixed costs each month)
Year 10, 11, 12, - reduced "buy one get one free" to "buy one get one 1/2 price" with no noticeable decrease in sales - again, minimal restrictions, etc.
Year 13: Now limiting coupons and discounts to our 4 slowest months and of course only mid-week (M-H) nights. Still careful not to confuse, deceive, or mislead in our offers.
Pros: Instant store traffic - fully employed staff - instant exposure - your competitors ire Cons: increased wear and tear - The occasional cheap tipper, water & entree, one visit wonders
Results: Waiting lines almost every night (weather permitting) and grossing over 1.5M
Advice: No matter what you do to get them in, as long as you treat them right and feed them well they will return again and again and again.
Any other first hand accounts?
Peter D. Troutman - mailto:email@example.com
I was a bit surprised to hear Bob Bradley's opinion's in this week's newsletter. Not that he was against 2-for-1 deals, but the absolute abhorrence of the patrons that take advantage of these offers.
My husband and I, along with a few other couples in our circle of friends buy the Entertainment book each year. We all enjoy dining out and always make an effort to try new places, and not always go to one of our usual favorite places. We often go in a group, and often, each couple will have an entertainment card. Apparently we are an anomaly though; we always order a bottle of wine (often times 3 or 4 bottles depending on how many we number), appetizers, salads, and entrees. We choose what sounds good and do not order based on the price of the item. We also always tip based on the total, plus the cost of the comped entree(s). We tip between 15% - 20%, depending on the service we received. Sometimes we have gone back and paid full price at these establishments at a later date, sometimes we have not. It really has always depended on whether or not we were "wowed" by the establishment. I think most people, not just a select few, enjoy getting a "good deal" now and then, I really don't feel it's a character flaw. I'll be sorry if too many restaurant owners listen to his advice and stop participating - I guess that we may never know they're there. On the other hand, if a restaurant is already packed to the gills at all times and doesn't need to participate - more power to them, that's the American dream!
At last, Bob Bradley and I agree! It took a while, but we got there. I couldn't agree more with Mr. Bradley's comments about two for one programs. The owner of the restaurant that I manage decided a while ago that two for one drinks on week nights was a good idea. You'll never guess what happened, the customers came in, drank two drinks, paid for one, and left. Guess what else happened? After I finally talked her out of continuing the promotion, those two for one drinkers ceased to be so thirsty! Amazing!
Two for one programs do only two things; cost owners money, and attract customers that you probably don't want in your restaurant.
Evan G. Spiegler
I full agree with Mr. Bradley. A private restaurant will only go out of business two times faster. These "CUSTOMERS" will never be back without a coupon and feel that if you can do two for one dinners, you are probably charging too much in the first place. It never works the way you expect it to. The only two for one will be the extra work in the kitchen to prepare the entree, the usually rude treatment of the waitstaff, the extra dishes the dishwasher will have to clean and put away and the lost seat if you are busy. By the way, they always come when you are most busy even though you may put in a clause otherwise. If you try to enforce any kind of restriction, that is the word of mouth that will get around.
Been there, done that.
In 1992 I started with a restaurant that was already participating in one of these programs. That October (the last month before expiration) I had a sudden rush of redeemed coupons. Since I was fairly new and didn't know my customers as yet I let it all just go past me. We renewed for the next years coupon book. This time I tracked the results.
First Month - good response based on coupons redeemed. Sales up slightly. Guest check average dropped.
Second Month - big drop off on coupons. Sales average. Guest check back up.
Months 3-11 - sporadic usage of coupons. Not recognizing the faces as regulars.
12th. Month - rush on coupons. Finally decided to engage customers about buying pattern. Basically I found that they followed the coupons.
13th Month - dropped out of the coupon book game. Sales increased $250,000.00 between 1992 & 1998. I didn't use coupons.
In a recent stint with another restaurant franchise they participated in a book put out by a local paper. Part of the deal is your ad on a weekly "restaurant page." Not sure just how it happened, but there ended up being an ad on the "page" offering 4 free dinners. I was prepared for droves of hungry people wanting free dinners. After all this paper claims to reach 250,000 readers.
There were a couple phone calls, a handful of in-house inquiries and one lady whom stopped in with the ad and wanted to know if it was correct. When she found out it was an error she left. You be the judge. It's your advertising dollar.
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