The study looked at popular Australian deal of the day sites including Jump On It, Ouffer, Scoopon, Spreet and Zoupon and found that Beauty (37%), Eating (28%) out and Leisure (21%) are the most popular deal categories overall with these three categories making up 86% of deals on offer.

Deal of the Day: Deals by Business Type

Uploaded with Skitch! Source: Altima Interactive

The study supports my view that service businesses that have low product overhead are the best targets for deal-of-the-day sites due to the high costs associated with successful promotions. Unless there are high margins associated with the product/service, it’s a given that the deal will be a loss leader.

So here are some suggestions to work out if promoting will be worthwhile for your business:

1. Work out the real costs of the promotion. Do you have the ability to offer a heavy discount plus pay the fees and still make money?
2. Think about lifetime value. If the initial promotion is a loss leader then it’s important the customers introduced by the promotion come back and buy again. Can you measure lifetime value? How many repeat visits will it take to make your promotion worthwhile?
3. Can you cope? Work out if hundreds of customers over a short period of time is manageable. Will these people get the type of service you usually provide?

Technorati Tags: Deal of the Day, Local Discount Programs, Restaurant Promotion

The best thing about promoting with coupons is you can set the terms and conditions. Some conditions I recommend include:

• If you are busy on Saturday and Sunday nights, then set your coupon to exclude these nights.
• If you are busy during the evenings then create a lunchtime only deal.
• Limit the number of coupons on offer. The best way to do this is by limiting the print, or with online coupon promotions limit the number of coupons available for redemptions.
• Set an expiry date and measure. Again, good online coupon applications will give you statistics to measure performance so use online coupons to set shorter expiry dates and measure.

If you need help with working out what type of deal to offer see my previous post “What discount should I offer” and don’t be pressured into offering a discount to a third party program like the ‘Entertainment Book’ if promoting with them makes you lose control of your promotion.

Technorati Tags: Discount Coupons, Entertainment Book, Restaurant Promotion

7 ways small business and restaurants have used Twitter:

1. Tender Greens, a fast-casual healthy restaurant chain sends Twitter blogs, about three times a day.  Most messages advertise the restaurants’ daily specials or tell followers about finds at the Santa Monica farmer’s market. Twitter was also used to advise public about a late opening of a store.
2. Dallas-based Maggiano’s began tweeting after they found multiple mentions of Maggiano’s during Twitter searches. The restaurant chain has 45 locations and launched a Twitter contest offering $100 gift certificates to two winners (Follow @Maggianos by 5pm CST to be entered to win $100 in Maggiano’s gift certificates). The chain increased their Twitter followers from 130 to 4099 at the time of writing. Meggiano’s uses Twitter to search for mentions of the brand and thank guests for positive comments and get to the bottom of unpleasant experiences. Maggiano’s also use Twitter to tell guests about menu specials, contests and promotions.
3. The Loft at Soby’s in Greenville, S.C send targeted promotions to approved customers with great results.
4. Table 301, a restaurant group with 6 restaurants in Greenville, S.C market via Twitter. Richard Peck, co-founder, believes Twitter is perfect for restaurateurs and hospitality pros who like to interact personally with customers. Addressing them with short messages through mobile devices or computers, which Twitter does simultaneously, is highly effective. There is the bonus of no cost promotion with response to tweets able to be measured.
5. Besh Restaurant Group in New Orleans believes Twitter increases sales. The main benefit of Twitter to Besh is their ability to interact with customers on the platform providing two-way communication not possible with traditional direct mail.
6. Panchero’s Franchise Corp sends tweets promoting the day’s special just before meal periods and claim that this drives people to restaurants. Friday tweets include Trivia questions with winners getting free food.
7. Large groups like McDonalds are following customers that comment on their brands or promotions.

I have some close friends who have built really impressive businesses in the mobile/cell phone marketing space. They assist small businesses including many restaurants with promotions via SMS messaging, another example of short form micro messages. The examples above and the growth of SMS promotions provide solid evidence that people respond to short from messages. Twitter is only going to get bigger and those who embrace the application now will benefit the most.

Tips for promoting your tweets:

1. Get your message across in 140 characters and be clear with the message.
2. Don’t send too many messages as you increase the chance of important tweets being ignored.
3. Try link tweets to your website or other social media pages to give additional detail about your promotion.
4. Be personal and interact as you would in person.
5. Know your identity and ensure your tweets are consistent with this identity.
6. Follow bloggers and writers in the industry.
7. Don’t go for too long without promoting. Your followers expect to get updates.

Special thanks ‘The High Powered Food & Beverage Forum’ members who gave their feedback and suggestions. If you like what I have to say you can also follow me on Twitter @sladesherman.

Technorati Tags: Marketing Tips, Restaurant Promotion, Twitter for Business

1. The local discount program that has many 5% discounts (low value offers) is unlikely to attract attention of customers. Saving 5% on a meal isn’t that sexy compared with a 2 for 1 deal! So 5% discounts can lower the perception and uptake of the entire local discount program.
2. For the customers who do take notice of the program, you should expect to get a better result from a 10% deal compared with a 5% deal….it’s natural selection!

I always encourage merchants to think about the discount in terms of ‘what is the perceived saving?’ (view the presentation below to find out more). If you are offering 5% on a meal the saving only equates to 50c on a $10 purchase and I don’t believe this is enough to motivate people to use the voucher. Put yourself in the shoes of the customer and ask ‘would this saving motivate me to use the voucher?’.

Feel free to connect with me on Twitter or subscribe to my blog so we can keep in touch!

Technorati Tags: Discount Coupons, Restaurant Promotion, Web2.0 Weapons

The best advice I can give for coupon restaurant promotion is to (1) limit your exposure and (2) use ‘perceived value’ to your advantage. Attracting new customers with a discount coupon is great for business as long as the terms of the offer limit your exposure by not giving away too much margin. You also want perception of value so potential customers feel compelled to use the coupon.

So here are some suggested marketing tips to attract customers and limit your exposure:

1. Put a maximum on the value of the discount. If you are offering a 25% discount on the food bill then consider applying a cap to the total saving. As a guide the cap should be equal to 25% of the value of four average full price main meals. So if your average main meal is $30, the cap on the saving should be ($30 x 4) x 25% = $30.
2. Structure a discount that is easy for your staff and customers to understand and calculate. It’s much easier to understand the value of 20% compared with 22.5%.
3. Limit the discount to ‘food only’ or ‘main meals’. The perception to the customer of ‘25% off the food bill’ and ‘25% off main meals’ compared with ‘25% off the bill’ is the same. In their mind they are saving 25% but options 1, 2 and 3 in table 1 illustrates how a perceived saving of 25% can actually only result in a 10% reduction in the bill.
Discount Calculation

View more presentations from sladesherman.
4. Consider BOGOF deals as opposed to percentage discounts. BOGOF deals are ‘2 for 1’ meal deals and are usually worded “Buy one main meal and get the second equal or lower priced main meal at no charge”. They have excellent perceived value as 2 for 1 implies a saving of 50%. In reality most people purchase more than just two main meals so the actual discount is less. Table 1 shows that the difference between the perceived saving and actual saving for a BOGOF offer is significantly better than other options reviewed so far. The chart below represents the perceived saving vs. actual saving for the four options in Table 1.
   Restaurant Promotion
   
   View more presentations from sladesherman.

My example in table 1 relates to a typical bill for four people but every restaurant is different so I encourage you to review the options and how they relate to your restaurant. Measuring your offer: Once you are promoting your offer, hopefully it’s resulting in increased patronage, but if not here are some things you can review:

1. Measure how many coupons you collect and ask customers who come in with coupons why they selected your restaurant.
2. Ask the local discount program to give you an indication of how many members are in your area. Check if the members match your target market (this also applies to paid advertising in which you are promoting a discount).
3. Ask the local discount program what sort of usage other restaurants in your area are getting and what discounts they are providing. If possible, change your offer so that you are more competitive.
4. Review the ‘perceived value’ of your offer. The best way to do this is to ask customers what they think of the offer and ‘listen’ to their feedback.
5. Test discounts by doing local letterbox drops or promoting your offer with local retailers and measure which coupons yield the best results.

Technorati Tags: Discount Coupons, Marketing Tips, Restaurant Promotion