Foodie Friday, and although the title of today’s rant sounds as if it involves improving the bottom line by drastically reducing overhead, nothing could be further from the truth. Since we’re food-related today, the topic is how restaurants that do daily deals manage to do them well. If you’re like me you’ve probably had the experience of buying a deal from GroupOn, Living Social, or even Amazon and having a so-so experience. That might be due to the fact that a great number of restaurants that do these deals regret having done so (about half of them, depending on whose research you believe). So why do they seem so popular?
The ability of daily deals to generate new customers remains the primary reason for featuring a daily deal for a majority (53%) of restaurateurs that use them. Bringing in new customers is one thing; getting them to return is another. In addition, if all the deal does is bring in existing customers who dine at a discount, the promotion has done very little to grow the business.
So what makes some restaurant deals work while others fail? GroupOn commissioned a study on that and found:
unsuccessful daily deals promoters struggle with many of these same goals – especially the goal of getting customers to return. The key to using daily deals effectively seems to lie in implementing the right steps before, during, and after to better assure success. To be successful with daily deals, companies need to first-and-foremost prepare their staff for the promotion. This one factor, alone, is the strongest differentiator between successful and unsuccessful daily deals users.
In other words, the staff needs to execute, and what that means is instructive for any type of business. After all, many of the places using these deals are not busy enough. What business ever thinks it is? But that leads to chronic understaffing. For these restaurants making sure that they have enough staff to serve the new customers during the deal is critical. I mean, would you go back to a crowded place where you couldn’t get a server’s attention?
It’s important as well to have a staff meeting to explain the promotion and set objectives for the deal campaign. Again, better communication with the team means everyone is aware of the goals. In addition, it’s a chance to remind them that many of the customers will be visiting the restaurant for the first time and to make a great first impression to keep customers coming back. They also need training on the mechanics of the deal – how to enter codes, how to track spending, etc. For the deals to work well, the customer needs to spend beyond what they get in the deal – buying wine that’s not included or maybe a dessert. Training the staff to upsell those thing s can make a big difference in the margin these deals provide.
All of those things remind us that being successful is a team effort and that an informed team that understands what you’re doing, why you’re doing it, and how success can be determined increases the likelihood that they will execute well. Deal?