5 Restaurant Marketing Ideas That Can be effective during the Slow Economy:
Yesterday I had a chance to have a breakfast with one of my friend- Alex at iHop who has years of hands on restaurant experience from Asia, Europe, Australia to US. He has successfully ran quick service restaurants like Great Wraps, Gorins Sandwiches and currently runs Dairy Queen as a owner, located in Atlanta. I thought it would be great to talk direct to the restaurant entrepreneur who has seen the business very closely in good times and bad times like today. So I was curious to know how he was doing his marketing in order to survive this economic turmoil. I was intrigued and fascinated by some of the simple marketing techniques that he is implementing yet very unique and very effective in a long term. Alex was frank and honest to tell me that he had learnt some of the ideas from marketing books and some that he just picked up from some of the chain restaurant. Never the less, he is successful in executing those marketing techniques whether it is his own idea or some that he emulated from others and modified to make unique to his restaurant business. Some of the marketing ideas that we discussed are:
- Free entree during the next visit with the receipt of previous purchase
- Free Entree for the winner on the Roulette Game Contest.
- Free Coffee with the purchase of the Chicken biscuit breakfast.
- Free Cheeseburger with the purchase of fries and drinks.
- Local Charity Drive-50 % of the sales on that charity day goes to the Local Charity Organization
Free entree during the next visit with the receipt of previous purchase: During the slow economy, people have a tight budget so they are always in a thought of savings. So keeping in mind the current customers economic situation, Alex has decided to offer a free entree which is a Dairy Queen burger in his case, to the customers who ever purchased a combo meal or any item from the menu and presents the previous purchase receipts. This strategy does two thing. First of all it pulls the regular local corporate customers into his restaurant as he has offered an incentives as opposed to nothing by his competitor who doesn’t have a clue what is he doing. If he was serving 300 customers daily on a regular day, with this promotion he has a chance to increase to 500 customers. With the increase of that extra 200 customers he has made enough to pay for the free item that he gave away. But the important thing that Alex achieve is that despite sluggish economy, he does his marketing very effectively and increase his sales and profit. More importantly his customers like him more than ever because he is the only one giving them free stuff.
Free Food for the winner on the Roulette Game Contest: The marketing idea behind this is to attract customers with the idea of contest to begin with. His Dairy Queen is inside a Mall so there are lots of people from other states just visiting. So outside the store when they create some sort of contest like “Roll the Roulette and have a chance to eat FREE Fries or Blizzard”. Then this becomes interesting and fun for the people walking by. They don’t have to pay to play. But they will have a chance to win. Most of the time they do win some thing. So lets say a walking by customers plays a roulette and wins FREE fries. He is going to redeem in Dairy Queen.Chance are that he is going to buy burger and drink with the Free Fries that he redeemed. So this guy who was there just visiting with no intention to eat at Dairy Queen, is entertained to dine with Dairy Queen. I call this selling by entertaining.
Free Coffee with the purchase of the Chicken biscuit breakfast: Free is a magic word that works in your restaurant marketing if you use it correctly. Alex does it very well with this promotion. Now he understands that coffee cost is may be 10-20 cents. So When he offers this as free with the purchase of 2 Chicken biscuits it is very attractive to the customers as customer saves almost $1.59 and may be more if you go to Starbucks. At the same time, Alex doesn’t lose a lot in his food cost as it is very minimal on the coffee. This strategy of offering free coffee is recently used by McDonald’s to attract Starbucks customers to theirs. Every now and then I see this kind of promotion with Dunkin Donuts too. So it is a proven strategy and it works. All you have to do is modify to fit into your business.
Free Cheeseburger with the purchase of fries and drinks: This strategy is good for lunch and dinner and in between break time. McDonald and all the other Chain restaurant does it which they call it “Dollar Menu”. But Alex’s marketing idea is little bit different than McDonald’s in the sense that it is free in the first place however with the purchase of Fries and drinks. As we all know that McDonald’s or Dairy Queen, they all make their most of their profits from those two items Fries and drinks. I believe Alex’s marketing idea is more attractive and sustainable as he is able to attract more customers which would not have come had there not the free cheese burger promotion. Though he lost little bit on his cheese burger which is not that high any way in food cost can be be recuperated by the high margin sales of Fries and Drinks. The success formula in this strategy is that with the free cheese burger he is able to increase the number of customers he attracts to his restaurant. The extra customers that is funneled into his restaurant pay itself for the cheese burger that he gave away to those many customers. On the other hand, McDonald’s $1 menu strategy is not a revenue generating rather customer attracting strategy with the hopes that they would buy other high margin food like fries and colas. But what guarantee is there that the customers would buy the other items. That’s why the $1 menu in most cases for all the major restaurant chains has been the loss leader but just because of the competitive restaurant market they have to put it there. But smart restaurant entrepreneur like Alex doesn;t have to follow that. He can take the idea , modify it and make it profit generating strategy.
Local Charity Drive-50 % of the sales on that charity day goes to the Local Charity Organization: They also recently had Local charity drive where they pledged to provide the 50% of the sales of that particular day to go to the Local Charity that Dairy Queen had picked. This achieved two things. First thing, people were thrilled and supportive towards this promotion that was for some great cause. Their customers had a chance to support the cause indirectly by buying food from them as they knew that 50 % would go to the Local charity. This instilled respect in their customers mind towards Alex’s Dairy Queen. They felt that Dairy Queen was not in their community to suck the money for profits only but also do some great work for the community sharing the same values and aspiration, and hope for better community. Second thing, because of this huge support from the community for this local charity event more people were involved and there were more people than any normal day. So when they added up at last, though they had to give away 50% to the charity, they made more because of the extra volume that they did on that particular day.
I looked at the promotion that was on the menu stand while we were having breakfast. Basically people can go their for breakfast and their pancake is free on that day. The customers who ever feels like offering some money as a charity for the cause can voluntarily do and that would go towards that particular Children’s Miracle charity. Thought I liked Dairy Queens charity promotions where the business gives away 50% from the sales, the idea of customers giving away for charity is also good. Whatever the case may be or strategy you may implement, it has to be aligned to do good for the community. Since your business is within the community and depends on the people living in the same community, it is at the best interest of your restaurant business and the community to help each other and flourish and grow strong.
Tomorrow is national pancake day at iHop. There is a buzz on Twitter. Every body is talking about iHop national pancake day. I even tweeted about the iHop buzz word on the twitter to my followers. Imagine how many people might have tweeted and retweeted the same stuff before it has reached to millions via web on computers and mobile phones. This is the power of Twitter that can be so effective and powerful if you use it cleverly and effectively.

