One of the most enduring questions any restaurant owner asks themselves is “How can I get more people to visit my restaurant?” There are many different strategies for marketing your business, but maybe the most commonly suggested is restaurant coupons.
The thinking is, they’re a good incentive for consumers to try your food, so they’re worth the cost of printing and distributing — not to mention the cost of the discount you’re providing. And lots of coupons are digital now, so it’s a no-brainer, right?
Well, not necessarily.
While there can be some benefits to using restaurant coupons as a marketing tool, there are even more negatives that come with incorporating them into your business plan. Evaluating these pros and cons is an important step in figuring out your restaurant’s marketing strategy.
Pros of Restaurant Coupons
Coupons have been in the marketplace since 1887 as a way to incentivize trial of a product and today, the thought remains the same; coupons are a great way to incentivize consumers who have never tried your restaurant to come in and dine or place an order. It gets them in the door so that they can taste your food for themselves and produce a lasting memory. And if the coupon is specifically for one of your most popular dishes, that means your guest is getting to try the best of the best first.
Once they are in your door, there’s also potential for upselling beyond what the coupon covers. If you’ve trained your servers well, they’ll keep an eye out for opportunities to suggest additions to the order beyond the coupon. Whether it’s picking out one of your specialty drinks or adding on an appetizer for the table to share, give your servers some ideas for what they can suggest to go with that item offered with the coupon.
(That’s if your servers know a customer is planning to use a coupon at the time of order. The solution? Always be upselling.)
The challenge with coupons in today’s economy is the consumer no longer wants to ‘clip’ coupons. Everything is digital and therefore controlling who receives the coupon is muddy. Consumers who utilize coupons will scour the internet to find a coupon for the places they want to dine and take advantage of the discount (it’s easy with Google to find coupons for your restaurant choice). You still have the option to buy ad space in your local paper (and depending on your area it could be effective), but putting out your coupons online could reach more people where they search and at less advertising cost to you.
Cons of Restaurant Coupons
It may seem obvious, but it’s worth noting: putting out coupons for a certain item means you’re automatically going to have less profit for that item. Restaurant coupons immediately add to your per dish costs. On a large scale, that can turn into major dips in your profit while the coupons are valid.
On top of that, coupons put your servers at a disadvantage because a smaller check is likely to mean a smaller tip for the same amount of work.
Just because coupons get the customer through the door doesn’t mean those diners will be encouraged to return. For many, it’s one and done. If your new customer can get that steak for $12, they may not want to come back to order it for $20.
While it is easier for people to find coupons on the internet today, it’s also much harder for businesses to carefully regulate just how many coupons are out in the world. You start to lose that control and could end up selling way more items at a discount than you expected. You also run the risk of customers finding loopholes in your coupon’s terms and conditions to take advantage of the situation.
And frankly, there is no guarantee that your coupon is being used by new customers trying your restaurant. With easy access to any coupon in the market, there are high chances of you giving margin away to your current customers looking for a deal.
But the most crucial negative when it comes to coupons is how they can damage your overall brand: after all, if you’re known for offering coupons, customers will start expecting coupons. Customers may actually hold off visiting your restaurant until they see you’ve put out more coupons. It will start developing your reputation as a “discount restaurant,” devaluing your brand as a whole.
Alternatives to Restaurant Coupons
While coupons might not be a good idea for your restaurant, there are other options proven successful for getting new customers interested in trying out your menu.
Advertise a limited time offer like a seasonal item. As long as the LTO fits with your brand and menu, it won’t dilute your reputation like throwing coupons into the world would. Limited time offers also stir up the tempting FOMO — fear of missing out — and don’t necessarily have to be a discount by comparison to your regular menu items. Consider coming up with a seasonal item for each season so there’s always something new and “around for a limited time” that can entice new customers.
Of course, Rewards Network program restaurants bypass the need for coupons because their customers — new and returning — benefit from rewards of choice we provide on your behalf. The largest restaurant industry promotional program in the United States, Rewards Network partners with some of the most popular brands in the country, not only to help drive in new customers, but provide customers that spend more when they visit.
We drive that member base of diverse and sophisticated consumers to dine at the restaurants — members who spend 13% more on average than other customers when they dine with you. Customers earn rewards, which means more value to your restaurant’s brand, not less. And you get more sales… without resorting to coupons.
Want to know the secret to getting return visits through your doors? Download our free eBook “The Key to Successful Restaurant Marketing” today!