Restaurant Discounts – Are they worth it?
Considering offering a discount? It’s not just coupons these days. There are so many discount sites for goods and services online now. And, for the savvy restaurateur, knowing when and how to use sites like Groupon, LivingSocial, and Pigsback – just to name a few – can make the difference between becoming the hot new place in town or the formerly promising restaurant that gave its house away for free. As the use of discount sites becomes more prolific, it pays to know what you’re doing and how you’re doing it.
First things, first — what should you consider when deciding whether to use a discount site for your restaurant? If you’re a relatively new restaurant, or maybe just underappreciated, discount sites can be a great way to let people know who you are and what you do. These discounts can even lead to the creation of new fans and loyal customers. Additionally, offering a discount can bring on a sudden rush of revenue that can help you tackle a debt or cover expenses quickly.
On the flip side of the coin (no pun intended), these discount services can have their drawbacks. The new customers that these discounts attract may not be the type of customer you want. And while a discount can bring in a sudden influx of cash, profit margins from these deals can be low. Often a discount results in your business being paid less than half – sometimes even less than a quarter – of what they usually make for a full-priced menu. As you know, businesses with low-profit margins – like restaurants – often face the greatest challenges in making these kinds of discounts work. One way to tackle this problem is by offering items with a high-profit margin, such as drinks.
It’s also key to keep in mind what offering a discount might say about your business. Does that discount say, “We’re family-friendly and accessible” or does it say, “We’re not worth paying full price?” These are important questions to consider before you decide to offer any sort of discount. However, if you’re doing your job right as a restaurateur, these are questions you will have likely considered as you’ve built your business.
Just based off of their popularity and wide-spread use, discount sites are here to stay. So whether you choose Groupon, LivingSocial, Pigsback, or any other local site, just make sure that you’re going into it with eyes wide open.
The experts at Solve can help inform you of the costs and benefits these sort of discount services can have on your bottom line. Whatever you decide to do, it’s important to know what you’re getting into and to use these services as just one of many tools to make your restaurant business a success.