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Restaurant promotions and discounts

Question:

How, in this age of Groupons and deals, can we entice customers without giving away our product?  What ideas do you have for creative promotions that will bring in customers that don't focus on giving a discount?

– Giuseppe Scurator, Chef/Owner, Ceres' Table, Chicago, Ill.

Answer:

Promotions these days are often synonymous with deep discounts. Running a promotion on tequila, for example, may mean your bar is discounting tequila with little added activity. But discounting is just one part of a good promotions strategy.

Here it may help to go back to Marketing 101. The goals of promotions are to:

  1. Present information to guests (awareness).
  2. Increase demand for products or services.
  3. Differentiate a product from the competition.

To be sure, Groupon and the plethora of other discount sites achieve these goals. The email blast and social network sharing can go to thousands of users (awareness), the discount deal offered increases demand, and the combination of price offer and the write up about your restaurant can help distinguish you from the competition. It is very much textbook promotion. The problem, as you point out, is that these goals may be achieved at the expense of your profitability. Restaurateurs give their experiences with these sites—and their impact on the bottom line—very mixed reviews. Some thank the promotion for generating awareness and traffic, potential regular guests, and cash from unredeemed deals. Others complain that they are giving product away to one-time shoppers, wait too long to get paid, and do not cultivate the market they want.

The question, then, becomes what can you do to continue to achieve these three goals of promotion without taking the financial hit of deep discounting.  Consider, for example, generating some buzz about something you offer at your restaurant that no one else can do. This may be a signature dish, unique cocktail or wine offering, showy tableside item, unique design feature, or even a legendary employee who offers something special. Invite some bloggers and food writers to experience this offering or maybe combine the public relations push with some advertising or engaging a PR firm. Press about your unique offering would create awareness, increase demand, and distinguish you from the competition, making it a good promotional effort that could actually add revenue rather than offering a discount.

Alternatively, advertise premium offerings such as a special chef’s tasting along with a kitchen tour and chef meet-and-greet that may yield a small percentage of guests paying a premium rather than a mass-market discount approach.

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