The coupon itself is a loss leader. One does lose a small amount of income but, if your costs of operation are in line, your business can afford it. Return rates on coupon bargains are about 10% or so. The reason again is simple. People have to tear or cut out the coupon, make sure they put the darn thing in their handbag or wallet, make sure they arrive at the restaurant during the period of time the coupon is valid and order the meals that are discounted by the coupon. WAY too much work for most people. Restaurant meals are supposed to be relaxing affairs not a running blitzkrieg to save a few dollars.
Are there customers who only dine out using discount coupons? Absolutely. But the last time I checked, there was no litmus test for potential restaurant customers to pass in order to gain admittance to an eating establishment. That's not exactly true. There is one test. They must have some way to pay for their meals besides MAYBE having a coupon. Do I make less money off a coupon table that orders no extras? Sure. But the turn time on these tables is usually so quick that I can easily make up for that low tip during the rest of my evening. A few high end restaurants I know of have instituted a policy of including the gratuity on the final bill for customers who use coupons and the gratuity is figured on the total bill BEFORE the discount.
The key to coupons is visibility. Every time somebody picks up the newspaper, magazine, flyer or book that contains the coupon for your restaurant, you are advertising to a potential customer. The name will stay with the customer after a time even if they don't use the coupon. And let's not forget the effect of a full parking lot, a full dining room and a lounge full of customers waiting to be seated. Everyone holding a coupon thinks they're the only person with one. If the customer has to wait a short time to be seated, just think what is going through their mind. "Wow! This place is busy. The food must be good. Glad I found this coupon because we've never been here before." And the comments go on and on and on.
Coupons are an advertising tool that, when used wisely and judiciously, can promote the name of your business, build your clientele and help pull your business through slow periods. Let's face it Mr. Bradley, we are in the business of serving people with cash to spend. Your attitude smacks of snobbery and elitism. It's an attitude that doesn't belong in our industry.
Thanks for the time and space. I always enjoy the newsletter and, as always, peace to all.
I submit to you that the overall response speaks for itself - the chains and semi-chains are different animals and they all use coupons (we once stood in line at the Red Lobster and out of approximately 41,000 people, we were the only ones without a coupon). "Bignorthsky" works in a fancy "Roy Roger's" and has no idea what the real restaurants are all about. His customers have no concept of fresh food and chefs and all that stuff. Fortunately for him, they remain happy in their ignorance. Of course they have coupons - they wouldn't leave home without them! And guess what, they work wonders at this level.
Having said that, coupons or "two for ones" have no place in a quality dining establishment. The people will remember your name and will return again and again because of the presentation (food, service, ambiance, etc.) Coupons are an unmitigated disaster for the upscale independent operator, and I stand by my comments.
I signed my restaurant up for a two-for-one program shortly after we opened a couple of years ago. There are 29 days, 8 hours, 55 minutes and 45 seconds left until the program expires!
I agree that often times 2 for 1 programs do not generate the return business anticipated. I have experimented with them in the past and really never saw the influx of the return visit (despite rave reviews on their first visit). And have friends who use those 2 for 1 books religiously, with no intent to return and pay the full fare.
A better use of that type of marketing expense would be to give a certificate for "two free entrees" to those diners that already are return customers. Never take the return customer for granted. They are the ones that you can depend on to pay the rent. In addition, when they come in to cash in their certificate, give them a form to return to you so you can send a "two free entrees" certificate to one of their friends. The appreciative "already are return customers" will sell your restaurant to their friends much more effectively than any jazzy ad in the local paper. Selling these new visitors appetizers, dessert and beverages along with their entrees would make the visit a break-even scenario.
I usually avoid places that offer two for one deals. My experience has been that they are having cash flow problems or are on the verge of going out of business. I also perceive these places as having inferior food and have to have a gimmick to lure a customer in. A good restaurant does not need to give away food.
Rosie Saferstein - email@example.com
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