Several months ago, before the good times ended, many restaurant managers and owners were espousing the belief that discounting and/or couponing of any sort was a bad thing, yet it’s now virtually impossible to turn on the TV, radio, or any other media, including email, without being inundated with discount offerings of one sort or another. Most people agreed months ago more damage than benefit results from couponing/discounting, yet now it’s so commonplace that if you’re paying retail you’re in the minority. Some methods of discounting and/or creating value are cleverer than others. Is “a-discount-a-discount” irrespective of how it’s positioned and are some discounting methods better than others? Can customers discern the difference between an outright discount, a two for one, BOGO, or multiple-meal special and does it make a difference?

In my opinion and I think most would agree, before any discount offer is positioned the underlying operation must be excellent. It also seems restaurant management should be front-and-center, thanking new, or increased frequency guest, otherwise what’s the point. Strategies giving people more than before (discount) are not a one time panacea. A discount buys another transaction and that’s it pure and simple, another opportunity to remind that customer why he/she should “trade” (the exchange of money for food) with you.

This week I used two discount offers with mixed results. One coupon was redeemed at a national chain restaurant that definitely gets it; one was used at a local operation that didn’t get-it. The national chain was friendly with staff and managers leading the way towards customer satisfaction. We were thanked multiple times, the food was great and when we left the manager was near the door, thanking guest as they departed. He also presented a free appetizer card for our next visit; I’ll definitely be back, not for the discount or coupon but because the team was so focused on guest satisfaction.

The other discount offer was a different experience, after my guest and I entered it was very clear nothing had changed or prepared guest or another new and fresh look at the operation, the food was good as it always is, but management made no special effort at welcoming or thanking potential new customers, it was pretty much business as usual. When we were presented with the bill, I placed the coupon on the tray with my credit card and you should have seen the look of disgust on the waiters face; I felt like a beggar rather than an honored guest.

Another story; a friend who operates a local chain restaurant, asked my opinion about a value promotion his franchisor is requiring franchises participate in. It goes like this; a smaller version of a popular sandwich has been placed on the menu as a special. This sandwich sells for two dollars less than the one which has been on the menu for thirty years, when packaged as a combo meal the customer saving is greater still. Talking through the details we arrived at the conclusion that the transaction could be reduced by as much as $3.00. This local fast casual operation has an average per person check of about $11.00 and as a result of the new addition my concern was that many would opt for the smaller and less profitable sandwich combination and as a result not only would profit suffer on each transaction.

Here’s the kicker, no advertising will take place other than in-store collateral (POP), which by the way costs about $400.00. I think this is a lousy promotion and will only serve to hurt those it is intended to help, there’s no TV, radio, billboard, newspaper or direct mail advertising supporting the promotion. Am I right? Will frequency of use increase with only in-store marketing driving the promotion?

These are difficult times; none of us need be told that and those who survive will be those who used creativity to get new customers and or increased frequency of use, these tactics also need to make money otherwise what’s the point. Excellent operations, friendly people, clean and attractive facilities and value are now ‘greens fees’, doing less is unacceptable.

Your thoughts on value please.

Views: 0

Tags: customer, marketing, operations, restaurant, value

Comment

You need to be a member of FohBoh to add comments!

Join FohBoh


Non-Operator
Comment by Mark Frank on January 28, 2009 at 10:03am
Right-on brother. Marketing gets them in, operations keeps them coming back. That is the way it is and will always be.

Mark
Comment by David Herfkens on January 28, 2009 at 2:27am
Superior Guest service should not be a "value" in this day and age but a neccessity. Getting the guest in the door and then bringing them back has got to be the main concern of any busness in todays economy. Value based items gives them that much more incentive to come back, the service should be the reason you ARE still in business. Superior guest service is still not a "priced item" on your tab. Unless you are that "Party of eight or more" you are not charged for service. A superior trained staff gives the guest just that one more reason for comming back, maybe to try a more expensive item on the menu.

Non-Operator
Comment by James Kohn on January 26, 2009 at 2:20pm
As my business name (the Customer Service Solution) implies, I feel as strongly as ever that providing superior customer service is the most efficient way to "add value" to a restaurant transaction. We all know that the quality of the service is as important a factor as any in how our customers assess our restaurants. Compare, for example, the experience of two hypothetical parties. They oth come in on the same evening, order the same food, and pay the same check. One of the parties receives less than average service. Maybe they even get the old "sorry, I'm new here" line. The other party receives extraordinary service. So good, in fact, that they might be expected to mention it at work the following day. Which party got more (i.e. value) for their dollar? What was the net expense to the restaurant for providing superior service? Discounting is, more often than not, the beginning of a downward spiral. It's the easy way out, like placing another ad. Creating a superior customer service program requires some effort, but it's worth it because it reduces your customers' price sensitivity, reduces employee turnover, increases productivity, and most of all increases repeat business and creates powerful positive word of mouth. It's good value for the restaurant and the customer! - Jim Kohn, www.theCustomerServiceSolution.com

Advertisments

 

DEPARTMENTS

Social Wine Club for Craft Wineries

Smartbrief

PepsiCo exec Lisa Walsh shares path to leadership

Industry leader Lisa Walsh, vice president of PepsiCo Customer Management, has risen through the ranks at the company since j -More

Checkers, Philly Pretzel Factory seize opportunity at Wal-Mart

Checkers and Philly Pretzel Factory are hoping to benefit from Wal-Mart's popularity by embracing new franchise development o -More

Quickserve eateries entice customers with local and sustainable angle

Locally-sourced, conscientious ingredients are gracing menus and grabbing loyal consumers at an increasing number of restaura -More

Galbani® Mascarpone. Gold Standard True Italian Taste.
Italy has a flavor all its own. When it comes to cheese, chefs who know choose Galbani. For irresistibly savory risottos and pastas, try classic Galbani mascarpone. Its rich, creamy goodness makes it perfect for favorites like tiramisu and cannoli. Galbani mascarpone, one of the fine brands from Lactalis Culinary. For paring suggestions, click here.

JOBS & CAREERS

Posting a job or finding a job starts here at FohBoh. Call us about special $50 posting packages to syndicate across all major jobs boards.

National News

Gen Z, the First True Digital Generation, Represents the Future Foodservice Consumer

Gen Z, the first true digital generation, represents the future foodservice consumer. They're a generation on the move that strongly prioritizes speed of service, technology, and having what they want, when they want it. Millennials, more so than older generations, prefer to visit restaurants that offer new and unique foods and flavors. Gen X and Boomers converge on several preferences—such as the importance of a convenient location.

Red Robin Gourmet Burgers Celebrates Its 500th New Restaurant Opening

Red Robin's 500th new restaurant opening will open on Aug. 4 at 11 a.m., in Milpitas, Calif. at the Great Mall of the Bay Area.

Darden Completes Sale Of Red Lobster To Golden Gate Capital

Darden Restaurants, Inc. (NYSE: DRI) and Golden Gate Capital today announced that Golden Gate has completed the acquisition of the Red Lobster business and certain other related assets and assumed liabilities for approximately $2.1 billion in cash.

Dunkin' Donuts Announces Plans For Seven New Restaurants In Duluth, Minnesota With New Franchisees Brian And Sharon Weidendorf

Dunkin' Donuts announced today the signing of a multi-unit store development agreement with new franchisees, Brian and Sharon Weidendorf, to develop seven restaurants in Duluth, Minnesota and the surrounding areas. The first restaurant is planned to open in spring 2015.

Wendy's Names Brandon Solano Senior Vice President of Marketing

The Wendy's Company (NASDAQ: WEN) announced today that Brandon Solano, 43, a veteran brand builder and product innovator, has been named Senior Vice President of Marketing.

CROWD FUNDING

If you are looking for capital to start or grow your restaurant, create the next 501c3, develop and launch the next app for the restaurant industry,or want to help your peers in some meaningful way, we want to know about it.

TED TALKS VIDEO

TED: Ze Frank: Are you human? - Ze Frank (2014)

Have you ever wondered: Am I a human being? Ze Frank suggests a series of simple questions that will determine this. Please relax and follow the prompts. Let's begin …

TED: Heather Barnett: What humans can learn from semi-intelligent slime - Heather Barnett (2014)

Inspired by biological design and self-organizing systems, artist Heather Barnett co-creates with physarum polycephalum, a eukaryotic microorganism that lives in cool, moist areas. What can people learn from the semi-intelligent slime mold? Watch this talk to find out.

TED: Shih Chieh Huang: Sculptures that’d be at home in the deep sea - Shih Chieh Huang (2014)

When he was young, artist Shih Chieh Huang loved taking toys apart and perusing the aisles of night markets in Taiwan for unexpected objects. Today, this TED Fellow creates madcap sculptures that seem to have a life of their own—with eyes that blink, tentacles that unfurl and parts that light up like bioluminescent sea creatures.

TED: Nikolai Begg: A tool to fix one of the most dangerous moments in surgery - Nikolai Begg (2013)

Surgeons are required every day to puncture human skin before procedures — with the risk of damaging what's on the other side. In a fascinating talk, find out how mechanical engineer Nikolai Begg is using physics to update an important medical device, called the trocar, and improve one of the most dangerous moments in many common surgeries.

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service