Turning Promotions into Profit

Turning Promotions into Profits Using Promotions to Drive Traffic and Increase Profitability

Attracting Customers Through Creative Promotions  

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When restaurant operators think of promotions, discounts immediately come to mind. However, promotions are far more than just menu price reductions. There is a broad variety of promotional techniques that restaurateurs can use to attract customers, ranging from integrated menu promotions to special events and coupons. Effective use of promotions depends on selecting the right approach, based on business goals and objectives.

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July 2009

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The Situation • Concept Development. The underlying theme for an integrated menu promotion should be based on business needs. For example, if there is more traffic at dinner than lunch, consider a promotion that builds lunchtime business. Weak business areas are prime candidates for promotion.

Over the past few years, new Internet-based technologies have dramatically changed the way that consumers gather information and communicate. The majority of people today use email and increasing numbers of these consumers are using mobile devices to access the Web and their email. Not to mention that text messaging has become a significant method of communication.

• Image & Pricing. An integrated menu promotion must be consistent with the restaurant’s image. An During this economic downturn, the competition for upscale establishment BrionÌs consumer dollars continues to grow. Independent will not use the same G ri ll e operators must go head-to-head with chains that techniques as a quick$12.99 have deep pockets, large marketing budgets, and service restaurant. Keep Specials frequent promotions. Promotions are a proven way for in mind that promotions Al Tw amo C per o chic independent restaurants to attract new customers and don’t need to feature fec ken hic tion sau br k c bac e, che and s easts g enon. dda mo rille a t S increase visits from loyal customers. Promotions don’t nd reduced prices. As long as r d fres erved chee hered to se w hv ege with m and ith B Gr h tab B les. ashed ickor Q have to be expensive. With some creative thinking and a promotion is consistent US ille pot y D d ato liki A C h Ri es n pot g. Se oice b bey r ato e advance planning, operators can drive more traffic with a restaurant’s brand, es a ved w eef gr il it nd fres h mas led to Ch hv you h ege ed through the door throughout the year. price can be equal to or even more r Th eesa promotional tab i les. exp s class e R doe avio sau lained icexpensive than other items. sn ce a . l nd Serve Ìt ne iAll sala items da nd are s top a BG erved ped w S wit unda ith y o hc e hoc -scoo ur ch o p ola te s of ice ice of cr auc H e an eam (v ouse d w anilla or C hip ped or straw aesar b cre am erry) .

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Integrated Menu Promotions

• w TVendor Coordination. It is important to coordinate rou tpromotions with food vendors. Suppliers can Por The term “integrated menu promotion” means a kC hop often suggest foods that are appropriate and have sseasonal, multi-week, or limited-time special that a attractive prices during a particular season. In restaurant continuously promotes. This marketing addition, the larger volume orders from promotions technique is commonly used by large chain may help lower prices. it’s all restaurants. However, it can be just as effective when here, a re you B 106 rion 2 Ìs used by independent operators.

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An integrated menu promotion might be a grouping of new offerings around a theme, a specific meal, or ale.com seasonal beverage. Unlike daily specials, an integrated menu promotion lasts anywhere from a few weeks to a few months. w.b

Planning is the key. This form of marketing involves everyone in the restaurant from the front of the house to the back of the house, to suppliers and customers.

As a result, preparation is needed to get everyone on board. Restaurateurs can help ensure a successful promotion by using the following tips: • Recommended Schedule. Planning should start at least a month before the promotion will begin. As a rule of thumb, one month of planning is a reasonable amount of time.

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• Staff Training. Because integrated menu promotions affect every function within the restaurant, staff training is essential. Hostesses and servers should know how to discuss the promotion with customers, while the kitchen staff must consider how the promotion will affect food preparation times, freezer space, and serving dishes.

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• Staff Incentives. Offering staff incentives is also important. Rewards should be given to both frontand back-of-the-house staff. Advance planning enables restaurateurs to purchase attractive incentives at lower cost, such as airline tickets to a desirable destination.

After the concept is decided upon, the plan developed, and vendors and staff members are aligned, the key to promotional success is marketing the promotion to customers. Key considerations include the: • Promotion Name. The name of the promotion should generate excitement and interest.

It also needs to be self-explanatory to customers, since it will be used in a variety of media such as banners, buttons, and stickers.

Try testing the name out on a few people to gauge their reaction.

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• Marketing Message. At any one time, an operation should run just one promotion. That promotion must have a clear, easily understood, compelling message which is used broadly in all aspects of the promotion.

(A great example: Subway’s $5 footlong sub. This promotion is simple and clear; everyone immediately gets it. The same message is used over and over in all communications.)

• Marketing Materials. Marketing materials don’t have to be expensive. Personal computers are a great way to create attractive signage for the hostess stand, menu inserts, and fliers. Stickers are also an economical technique for publicizing promotions on takeout bags, servers’ uniforms, guest checks, and menus. Other forms of promotional marketing include print ads, radio spots, table tents, and internal contests.

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Coupons Coupons are another effective form of restaurant promotion. A common mistake is to try a coupon just once and then abandon the technique if big results don’t appear immediately. Experts recommend trying three to four coupon campaigns and then evaluating the outcome.

Before distributing coupons, it is important for operators to identify the specific objectives and the target audience for the offer. The most effective coupons are aimed at a specific group of people and have a message that prompts this group to take a specific action.

Once these elements of the campaign are in place, other key considerations include: • The Offer. There are a variety of formats that are used for coupon promotions. Some of the most common are 10-50% off an entrée, buy one entrée and get one free, and get a free appetizer or dessert.

To be compelling, offers need to significant. They should be worth at least the price of an entrée. Buy one, get one free, or discounts of 50% are usually effective approaches.

• Image Considerations. Operators must evaluate how a coupon campaign aligns with the restaurant’s image. With a casual restaurant, a coupon in a mass mailer is an appropriate format and delivery vehicle.

This same approach, however, may not be suitable for a more formal establishment. This does not mean that upscale restaurants should steer clear of

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coupons. Surveys show that 95% of consumers don’t think less of a restaurant that offers coupons. The important point is that the coupon format, graphics, and offer must be consistent with the restaurant’s image.

• Distribution. There are many ways to distribute coupons, ranging from the local newspaper, to email, U.S. mail, and by companies that specialize in coupon programs. New restaurant owners may get better results by using a direct mail marketer or coupon book distributor. These companies have a strong brand identity and established distribution channels.

Internet coupons—distributed via email—offer greater geographic coverage than direct mail pieces.

In addition, they often have a lower incremental cost than direct mail. Operators should also consider offering coupons through their website. To avoid over-redemption of Internet coupons, use a one- to two-week expiration date from the time of printing.

An advantage of coupons is that operators can test different promotional offers to different groups in order to see what works best. All coupons should be coded so that operators can measure the results of each offer.

Restaurateurs should not overlook staff training when launching a coupon campaign. Servers must understand the coupon rules, how to key the discount into the POS system, and how to upsell food and drinks to customers using a coupon for their meal.

By offering quality customer service in conjunction with a promotion, operators improve the likelihood of converting new visitors to loyal customers.

Special Events and Locally Oriented Promotions Special event promotions are an great way for restaurants to attract new customers, as well as to reward repeat customers. Birthday and holiday promotions tend to be very popular and successful.

Research shows that 50% of all Americans eat out on their birthday. Automated email tools allow restaurateurs to send secure and well-designed emails to customers in advance of their birthday. Consider

July 2009

incorporating redemption codes into the email to enable promotion tracking.

Holidays, such as Valentine’s Day and Mother’s Day, also offer great opportunities for creative promotions. Offer special menus, gifts to those who reserve well in advance, and coupons or promotions to those who come to bring them back again. For example, at this year’s Valentine’s Day give a guest a gift certificate for next year’s Valentine’s Day dinner.

Business socials are another great way to promote a restaurant, while targeting a core customer segment.

Partnering with a business or charitable organization works on many levels and helps operators stretch their marketing budget. The most effective business socials have food at center stage. Be sure to take advantage of photo opportunities that can be used in the local media.

Hosting locally oriented food events, such as the “Taste of the Town,” helps position a restaurant at the center of the food scene. Restaurateurs can also build goodwill in the community by offering tours for school children, as well as discounts and sponsorships for local sports teams.

Pay What You Want Promotions An emerging trend—especially relevant and appealing in the current economy—is “pay-what-you-want” promotions. This marketing technique gives guests the opportunity to set their own price, in hopes that it will transform them into loyal customers.

There are several approaches for structuring a paywhat-you-want program. One option is to offer one or two entrées where the customer gets to set the price.

Other techniques are to offer the promotion one day a week, or to charge for beverages and allow customers to pay what they want for food.

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Measuring and Monitoring Results With any marketing campaign, it is essential to measure the results. To accurately track return on investment (ROI), operators need to calculate their break-even.

This means that if an operator spends $1,000 on a promotion, they need to know how many additional meals must be sold to cover their promotional costs.

Some promotions are easier to measure than others.

The results from integrated menu promotions and coupons are fairly easy to monitor and measure, thanks to POS system data. The positive effects of business socials and other food events, however, may be more difficult to quantify. As part of routine analysis, operators should examine the effectiveness of one type of promotion over another. This information will help guide future promotions planning.

Developing a Promotion Calendar Independent operators should consider developing a year-long calendar that features different promotions designed around seasonal foods, holidays, and local community events. Hiring a consultant to assist may be a good idea. An expert can create a comprehensive promotion calendar in just a day or two.

Sysco Can Help As you experiment with promotions and develop an ongoing promotions program, Sysco can help. The Sysco Table Top website (www.syscotabletop.com) is full of practical marketing tips.

• TableTrends. TableTrends provides recipes and menu suggestions that incorporate this month’s featured Sysco products. Using seasonal foods in specials and promotions is a sure way to delight patrons.

• Business-Building Tips. Sysco Table Top offers numerous tips for increasing business through holiday, seasonal, and local promotions. These programs help keep a restaurant’s image fresh and top of mind among customers.

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• Tool Kit. Sysco offers menu marketing tools to help restaurateurs create attractive menu inserts. My Menu Lab allows users to customize their own menu inserts, using great new recipes from the Sysco Table Top website.

• The Table Top Library. The Table Top Library provides market and trend research, as well as proven business-building strategies from the nation’s most informed food services experts.

These materials are designed to help restaurateurs prepare their operations to survive and thrive in times when customers are tightening their belts.

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• Sysco iCare. In addition to Table Top, Sysco has formed relationships with several leading marketing companies that can help operators implement promotions. Relevant iCare partners include: – Constant Contact. With Constant Contact’s email marketing tools, it’s easy to create attentiongrabbing email newsletters and promotions.

– Moving Targets. The promotional experts at Moving Targets offer three aggressive, low-cost direct marketing services proven to influence people to visit your restaurant and spend money.

– Fishbowl Marketing. Fishbowl Marketing provides a variety of marketing services and promotional content for email campaigns, as well as assistance with marketing calendar development.

List of Sources Sources for this article include Nation’s Restaurant News, Quantified Marketing Group, RestaurantOwner. com, and Sysco Table Top. Information on the Sysco iCare program and on each iCare partner can be found at www.syscoicare.com.

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