Presidents Day, and many other quasi holidays are often slow times for restaurants that serve business lunches.
The restaurant is open, but their business is 50% lower than on a typical day.
Offering an outrageous deal to loyal customers to bring them in can turn a near certain bad day around.
Even if the restaurant only breaks even on the offer such as a two-for-one entree or other high cost incentive, the ancillary benefit of drinks, sides, and desserts help.
The REAL risk isn’t that the offer will be too generous, but that the restaurant is empty, the staff is unengaged, and the entire vibe is down.
If your business thrives on momentum, pull out all stops to get it moving, because the best way to bring in a crowd tomorrow is to serve a crowd today.
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In these quasi-deflationary times, discounts of 50% are not deflationary time bombs, but the new ceiling of what the consumer is willing to pay for discretionary expenses. As consumers continue to de-leverage, businesses are forced to compress margins to fill vacant tables. In addition to the ‘vibe’ that Dick speaks of, the merchant can count on coupon breakage of 10%-50% percent and an average consumer spend of 50% above the coupon value. Loyal customers will spawn from their de-risked, first time experience if the service and food is good.
Japan has been in this spot for over 20 years on the heels of both a housing and stock market bubble burst. It is likely that we have several more years to go. Restaurants and SMB’s will need to accept the new landscape and assume risks to survive.