By Tim Davies, Chief Operating Officer at Waitrr
I was chatting with one of our restaurant partners the other day about the benefits of using promo codes to drive growth.
Before I go any further, it’s worth highlighting that discounts should be used very carefully. One of my ex-colleagues at Unilever used to say that discounts are like drugs. You use them once and you get a big result, the more you use them, however, the lower the result.
Focus on the right objective: gain insights to grow your business
So how can a restaurant use promo codes without falling into that trap? One answer is to employ them to track the effectiveness of different marketing campaigns/channels, instead of using them to grow short-term revenue.
For example, you could create one promo code for a Facebook campaign, another code for a promotional flyer and another for a poster in a mall. Provided the discounts/mechanics in each of the promo codes are the same, the code with the most redemptions will signify which marketing channel is the most effective.
With these insights, you can optimize your marketing efforts by focusing on the channels that are the best at driving revenue for your restaurant.
Another way effectively use promo codes is to drive trial.
There are real and perceived costs to trying out a restaurant for the first time. People may ask, “What if the restaurant doesn’t have anything I like? What if I don’t end up liking what I order? Would I enjoy eating at my regular restaurant more?”
Newly opened restaurants have the inherent benefit of inspiring curiosity. People naturally ask themselves what the food/experience will be like, and they’ll overcome their hesitations to go there.
Restaurants that have been around a while have lost that advantage, and restaurants that have lost customers due to a poor experience, have even bigger obstacles.
Using discounts is one way to get customers to try your restaurant (again).
Finding the perfect balance:
The trick of course, is to offer just enough of a discount to encourage trial, and only to your intended customers, not to people who would have been happy to pay full price.
This is where digital promo codes (like the ones available to Waitrr’s restaurant partners) really shine. Our partners can limit redemptions per customer (e.g. abc promo code can only be used up to x times). They can set minimum spend and maximum discount limits. They can also test a range of discounts (fixed $ or %) to see what generates the best result.
Keen to give our service a try? Feel free to contact us.