The Bottom Line
Make Promotions About More than Just the Money
Lowering prices is a surefire bet to increase customer turnout [supply equals demand, after all], but it may not always be the most economically viable way to promote your restaurant. Tons of options exist beyond your classic 10% discount, or heaven forbid, 50% discount, that will bring more people through your door. Experimenting with non-monetary promotions may very well do a better job of driving traffic while saving you money in each transaction.
When I say ‘non-monetary promotion,’ I mean that the promotion doesn’t revolve around a direct price discount, such as 10% off. It all revolves around consumer psychology: Sometimes offering more product rather than a lower price is perceived to have greater value. Of course all promotions do come at a cost, but the key is to frame them in terms of the product rather than the price. This method allows customers to focus away from the money they spend, devoting their attention toward the benefits they receive.
To put this into clearer terms, let’s use a non-business example. You call on a friend to help you move into a new house. In exchange for their time and effort, you take them out to dinner after you’re done. Could you hand them some cash? Of course, but introducing hard money removes the personal aspect of the transaction. Your friend now feels less like a friend and more like underpaid labor. The meal, on the other hand, demonstrates far greater value by showing your personal gratitude, even though it probably costs less than the cash you’d otherwise dole out.
Restaurants have so many ways to show customers this kind of ‘personal’ gratitude. Free food and drink promotions are at the top of the list. Appetizers, sides, desserts, add-ons and premium beverages are all great ways of enticing someone to come in through your door. One of the biggest benefits of these promotions, of course, is that the retail value, or customer’s perceived value, is far greater than your cost of making the product. If you were to ask most customers what they think when they see “free appetizer,” very few of them would respond with “a few bucks for the food and labor.” Few of them would allude to the appetizer’s menu price. In the eyes of most customers, something like a free appetizer equates to a fuller restaurant experience that they wouldn’t otherwise enjoy on their own.
Take full advantage of these promotions by making these giveaways experimental/new menu items—Nobody is going to turn down a freebie, and they can provide valuable feedback to determine if the item will be a profitable addition to your repertoire. You can also use these promotions to clear out inventory, such as ingredients nearing the end of their prime or wine that needs to be cleared out to make room for a new shipment. In both cases, be sure to serve only what meets your quality standards. Everything tastes better when it’s free, but subpar products will take away from the experience as a whole as well as your overall brand.
Another successful promotion is bundled menu items. Prix-fixe, tasting menus, ‘Restaurant Week’ menus and the like all reflect the same value-add of a more comprehensive restaurant experience for less than what you’d pay for each individual component. Bundling works to your advantage in multiple ways, presenting customers with ‘a deal they can’t refuse’ while at the same time upselling them on items they may not order a la carte.
If you decide to experiment with bundling, be sure to keep two huge points in mind. First, choose items that best reflect your restaurant. Customers want your most famous appetizer, entrée and dessert. If you try to throw in a lower-tier item into any part of the mix, your bundle runs the risk of being seen as a scam. Second, your portion sizes need to be the same as they would be if ordered a la carte. Unless you’re adding more courses [i.e. serving half-portions of two entrees], customers will be furious if their entrée is 2/3 the size of their neighbor’s.
These are just a few food-based promotional options, and each category presents seemingly endless possibilities. People go out to eat with the intention of enjoying great food, atmosphere and service, so push that benefits-based mindset rather than bringing up the price they will pay.