We totally get it. While you don’t want to risk going down the rabbit hole of promotions, you can’t deny the fact that they are an essential element in restaurant marketing strategies. Any restaurateur worth his/her salt will tell you that while email marketing, loyalty programs and mouth-watering food photos certainly help to spread the word, the promise of a free meal can be effective in filling seats — when it’s done right, of course.
But before you embark on a journey to attract loyal customers, let’s understand the reasons behind restaurant promotions, how they address common pain points and how the right digital marketing tools can solve them.
Pain point #1: Under-utilising off-peak hours
A typical restaurant operates for 12 hours, yet, its average daily peak period only makes up 25% of that. The amount of time a restaurant is under-utilising its full capacity can total to nine hours — a time slot that’s rife with opportunity. Operational costs such as rent and full-time staff don’t change regardless of whether you’re in your peak periods or otherwise.
Run promotions during off-peak hours to attract seat fillers during quieter operation hours. For example, Starbucks Singapore often employs 1-for-1 offers on their Venti sizes during 3pm to 7pm, considerably their off peak period post-lunch and pre-dinner. Go back to menu engineering and figure out which menu items will get customers more bang for their buck.
Pain point #2: No-shows and loss in revenue
Every restaurant seeks to maximise the total revenue they can generate every night. But no-shows remain that one major stumbling block. The thorns in every restaurant’s rose, no-show rates could go up to an astronomical 20% of all bookings, according to Quartz. With sudden no-shows, a restaurant in Singapore can estimate an annual loss of up to $300,000 in revenue.
At Chope, we found that diners who have made reservations and pre-purchased dining vouchers via Chope were 47.6% less likely to no-show. Even if diners don’t show up at your restaurant at that specific date and time, they’re more likely to return to use the voucher at a later date. Think of pre-paid dining vouchers as a form of insurance for your restaurant reservations team. It’s your chance to prolong that restaurant-diner relationship, turning them into long-term customers.
Pain point #3: Finding cost-effective ways to reach more customers
Forbes noted that 92% of consumers believe word-of-mouth recommendations more than other advertising forms. Yet, getting new diners are expensive — around six to seven times more costly. How should you get news about your restaurant out?
Everyone loves a good deal. Consider attracting your potential diners’ interests with ‘loss-leader’ promotions. When Chope ran a ‘$1 Main’ Flash Deal with partner restaurants, it proved to be a major success. 87.3% of diners who redeemed these flash promotions were first-time diners to the respective restaurants.