How Restaurants Can Use Coupons Effectively (Part 2)

In Part 1 of this blog entry, we considered several issues related to discounting, including knowing your audience, aligning your program with your brand, what kind of offer to make and measuring your results. In Part 2, we look at how to spread the word and how often, whether you should use the internet, and training your staff.

How to spread the word and how often to do it
Once you have decided on the form and substance of your offer, you must determine how to get the word out. With as much as restaurateurs have on their plates, a turnkey program from a local direct mail marketing company or advertising agency may be the best way to go. Most restaurateurs do not have the time necessary to commit to a program like this and run their business.

Repetition is key to results. According to many restaurant consultants, three or four attempts make for a good test. Then you can analyze the results and see if you want to continue. One mistake many proprietors make is sending out a coupon once, not getting the results they hoped and then quitting.

Should you use the internet
We all know internet distribution of coupons has grown exponentially over the last few years. Should you use it? It has pros and cons.

On the plus aide you get potentially greater geographic coverage – a direct mail piece typically reaches a three- to five-mile area – as well as potentially lower incremental cost. A direct mail piece sent out via first-class mail will generally cost 41 cents per piece. Internet offers can be posted on a restaurant’s Web site for virtually no cost, other than development and maintenance expenses.

On the negative side is the risk of over redemption and/or counterfeiting. Fortunately, there are safeguards that some companies that distribute restaurant coupons via the Internet use to minimize the likelihood of either. You can most likely answer this question by considering the other issues above.

Train your staff
Make sure your wait staff is trained on any coupon or discount program. Your frontline workers need to understand the rules and restrictions associated with the coupon or discount, how to process the discount properly so that ROI can be calculated, and encouraged to up-sell appetizers, drinks and desserts to those using a coupon or discount for their meal.

Coupons can create repeat customers
Used properly, and tracked, discounting can be an effective method to create new customers, and turn them into loyal regulars. It’s important to understand, however, if you use coupons/discounts to attract new customers, it’s up to you to keep them coming back. You’ve got to make sure that you and your staff give your customers a first-class experience when they try out your establishment, or you’ll likely never enjoy them as regular, full-price-paying customers.

You may want to read Is Your Restaurant Ready for More Customers (Part 1) and Is Your Restaurant Ready for More Customers (Part 2).

If you are a restaurateur thinking about increasing marketing, making capital expenditures, or otherwise investing in your business and looking for a restaurant loan, try Advance Restaurant Finance, LLC (ARF). ARF has been making short term business loans to restaurants for almost a decade. Despite the economy, ARF never stopped making business loans to restaurants, and ARF makes restaurant loans up to $1,000,000 per location and starting as low as 11.5%. If you are looking for a restaurant loan, ARF is one of the first calls you should make.