Utilizing Offers to Optimize Revenue

Don’t let a “one size fits all” approach derail you from utilizing offers to help drive revenue!

If you’re like most restaurant brands, you probably don’t want to be known for offering “discounts.” But with segmented database marketing there IS a right time and place to offer an incentive to purchase. When deciding on the RIGHT offer to the RIGHT guest it’s important to execute against the right strategy. Ask first:

1. What are you trying to achieve with the offer? Know your objective up front and tailor your offer accordingly. Different objectives may have different appeal depending on our guest target.
   1. Move business to an under-achieving daypart?
   2. Promote trial from new customers?
   3. Increase the average check total?
   4. Increase frequency?
   5. Other??
2. What do you know about your member’s data (and therefore purchase behavior)? Try your best to understand how offers may appeal to broader or more segmented audiences (for example, don’t offer a deep discount to an already engaged, loyal guest).
3. Will this offer hurt my margins? Include offer restrictions that may require an additional purchase or minimum spend. It doesn’t make sense to create an offer that costs more than it generates! Do a post-analysis to determine total spend after discount to determine profitability and if possible, measure the repeat frequency (lifetime value) of each guest.
4. How often has this guest segment received an offer? Do not offer too many offers to the same guests within a short period of time. This can erode perceived brand value and negatively impact non-offer visit frequency.
5. Will this offer slow down speed of service? The offer may do more harm than it is worth. ALWAYS partner with operations in assessing offers.
6. Is the offer tailored specifically to its redemption time frame? Use offer restrictions to limit redemption on specific days of week or target dayparts where you need to add capacity.

By always having the discipline to create the appropriate offers (right offer, right guest, right time) you will find that offers or “discounts” can quickly become a highly effective tool in increasing visit frequency and average spend.