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It's a mixed blessing to have a dining room full, but full of people who paid .20 cents on the dollar for the meal in front of them, drink water and tip poorly.

Discounting your product and service to the market is, as many restaurants have found, not always the best way to drive traffic - particularly if all they come in for is the discount offer, nothing else on the ticket and then never return. 

Teddi Davis, VP marketing at ProfitStreams cites an article in the Harvard Business Review in her recent post at the 360DegreeBlog.com.  Turns out that Teddi really knows her stuff too - she's a 20 year marketing veteran and owns an Irish pub in North Denver.

The gist of the post is that yes, a discounting strategy can be used to help drive awareness and trial, but to rely on it for consistent business and revenue is a path filled with real challenges and possible failure.  Discounting can be  just one of the tools in the tool bag, but not the only one.  Use it sparingly...

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Comments

  • Brother Steven! Can I get an AMEN!

    I'll tell you, we tried doing one of these "groupon" things with "InBundles" and it was a nightmare! All my marketing amigos wraned me, "stats say it's a bad idea for restaurants". Restaurant owners have been crying that it is "bunk" 9not really the word they used but...

     

    So did I listen. No. We did it. We lost $. We didn't gain anything other yes, some new eyes but long term guests and loyalty? Not at all.

     

    It works for other businesses but restaurants get shaffted. Between, paper, labor, food costs. At the end of it all, it's a wash.

     

    By the way, can I say how much I enjoy your commentaries on my posts!? You crack me up and I apologize for not giving rebuttals. Been swamped here in Sullyville but...appreciated my friend! have a great weekend!

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    Ty...out!

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