Marketing

Coupons: Handle with Care

by Patrick Morris

In today’s economy, everyone is looking for a coupon.  So no restaurant concept, regardless of its place in the industry (fast food to fine dining), should dismiss them summarily.  They are valid promotional techniques for a variety of reasons.  But they must be employed with care and…a strategy!

All coupon programs need to be designed to generate some form of return (sales, profits, awareness, etc) and be considered a handy tool in your overall marketing strategy.  Following are just a few strategies:

·         Send up a trial balloon.  Support the introduction of a new menu item or a new concept by enticing guests to try something they may not be familiar with.  Said another way, provide a reward to overcome the risk of trying something new.

·         Counterattack the competition.  Quickly pre-empt competitive openings or their new marketing campaign.

·         Develop incremental business during slumps.  Increase coupon use to boost seasonal sales slumps or other soft sales times.  Avoid using coupons as a fundamental part of your business.  Consider them “boosters” and not the engine of your marketing program.

·         Increase purchase frequency.  “Bounce back” coupons (given to guests in the restaurant) and frequency cards (punch/stamp) should be used to squeeze the purchase cycles of your regular guests.

·         Build a “media bridge”.   A freestanding insert (FSI) in the newspaper and direct mail campaigns can provide an “awareness bridge” to help cover major media hiatus weeks (no TV, radio or print ads running).

·         Improve your day-part focus.  Use coupons to build business in slower day-parts (breakfast, lunch, dinner or in between periods).

But as some operators have learned the hard way, if you’re not careful coupons can easily become a bad habit.  And once you start using coupons with regularity, it is hard to withdraw from the program.  Both your guests and your business become dependent upon them.  Here are some tips to prevent your guests from becoming coupon junkies:

·         Don’t coupon because all else fails.  As mentioned above, coupons can help build your business.  But they can be an expensive salvation.  If everything else is failing, you need to look at your entire business strategy.

·         Consider how coupons will affect your image.  If the appeal of your restaurant is sophistication and elegance, you need to be careful about tarnishing your image.

·         Run the numbers.  Consider the financial effect of your couponing effort on the bottom line.  Know the breakeven of how many new guests are needed of offset the profit impact of the offer.

·         Keep your staff in the loop.  You will need to train the entire staff on how to redeem the coupons, any restaurant policies relative to the offer and ways to up-sell the guest to offset the discount.

·         Make them meaningful.  To be effective the coupon offer must be meaningful to the guests.  Don’t “cut your losses” by offering something minimal, that won’t stimulate the guest to respond.  The offer should be meaningful and strategic (see above).

Finally, take full advantage that coupons make it easy to track their source.  If the cost of a certain coupon vehicle isn’t being offset by the redemption rate, don’t continue to waste your money.  Rethink and Regroup!

Bio:

Head bus boy, Assistant, associate representative to the president, Sultan of strategy…whatever!

Pat Morris has over thirty years experience in the hospitality industry as a Chief Marketing Officer, Chief Operating Officer, and Owner/Operator.

Pat began his restaurant career in marketing at PepsiCo, first with Pizza Hut and later at Taco Bell, where he also completed a Fast-Track Operations Program.  In 1985 he joined Perkin’s Restaurants as Executive Vice-President, helping to re-energize the concept and grow the system dramatically. He repeated this performance at Tony Roma’s from 1990 – 1993.

In 1994 Pat moved to Houston as President/COO of Casa Ole’ Restaurants.  He combined the restaurants of two different organizations into one entity and took the company public in 1995.  In 1998 he became a franchisee of the Winger’s concept and opened a restaurant in Pasadena, Texas. 

In 2001 he decided to combine his experiences in growing large and small restaurant companies; being franchiser and franchisee; and serving as marketer and operator into being a multi-faceted consultant who helps other businesses grow and achieve their goals.  Pat joined the Ala’ Carte Foodservice consulting Group officially in 2002.

Pat has been a guest speaker and panelist at many industry conferences, as well as being a member of the National Restaurant Association’s Marketing Executives.