“Promotions? Discounting? Ah sure that’s just a race to the bottom and will decimate my margin, we’ll be busy fools is all”. We hear it all the time but there are ways to run restaurant promotions that can increase your sales and boost your profits.
1 – Know Your Customer Base
Before coming up with specific food promotion initiatives, it’s important to note that no promotion is successful without first identifying, analysing, and understanding your current customers and your target customers. Running a promotion that isn’t interesting to your audience is a waste of energy and money and unfortunately, it happens all the time!
Ask yourself: Are you located near office buildings? A transient population base, a tourist attraction, or a big local market? Do your customers tend to be older or younger? Families? What motivates your customers: having an experience, trying new foods, or saving money, or something else? Work out the answers to these questions and you’ll have a much easier time coming up with restaurant promotion ideas that generate increased visits and increased spend.
2 – Look at Your Business Challenges
Restaurant promotions exist to help restaurants overcome challenges unique to their business.
While some operational challenges can be identified by chatting with your team members, underlying issues are best discovered by diving into the data and analytics from your stocktake and restaurant till system. Is there a section of your menu that isn’t getting any love, or a time of day where your staff are idle? Set up discounts on those foods that aren’t moving and try a happy hour during off-peak times.
3 – Know Your Margins
As you know, it’s important to know the margins of every menu item – both food and beverage. This helps you think up creative bundles of offerings that, together, give you the profit margin you’d like to get. For example, you could just give away free sides / free chips to all customers for a short timeframe, but it might be more beneficial to offer free sides or chips when they buy a drink.
Generally speaking, it’s best to promote offerings with high profit margins as a lead into the rest of your menu. However, it’s more important to thoroughly understand your margins so you not only know how much you can discount, but so that you can make more informed purchasing decisions and identify ways to make your stock go further.
We recommend that the best way to tailor promotions to your business is to write down your top 5-10 business challenges, and then write down the top 5-10 things that motivate your customers. Then, connect the dots.
If you are looking for greater visibility and insight into your food and beverage costs, processes, margins, and usage, contact us today; our vastly experienced Team will work with you to identify and solve any issues potentially present.
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