Many of my closest friends work in the restaurant industry. In fact, one of my clients is a local restaurant … as you’ll discover in a minute.
For the last 10 days, my restaurant friends, who are mostly servers, have been totally fed up.
You see, it’s been restaurant week here in Charlotte. That means 10 days of several restaurants offering a three-course dinner for $30.
The restaurants are mostly upscale establishments so the week offers a major discount. I get to hear about restaurant week from the server perspective and they all HATE it. H-A-T-E in capitals … with hyphens. And you'd think they'd love it due to the extra traffic.
To participate, restaurants pay a fee to the organizer. I believe they also have to hand over some gift cards. So, for ten days, a restaurant pays to decrease revenue – and that’s in a low margin business. The fee to participate is either $1,500 or $3,000.
The organizer touts the following benefits.
- Increased traffic in a down period just after Christmas.
- Increase in beverage sales as people will be willing to splurge on wine, etc.
- The chance to get new people in the door.
This leads me to the issue of discounting. For 10 days in the winter (and 10 days in the summer) the participating restaurants get a ton of people to visit. But they have to decrease their prices at least 35% … in many cases much more.
Plus they must organize an atypical menu so they don’t lose too much money. A manager of a big steak house told me she has to add extra staff and order extra food … even more expense. The diners get a watered down experience but they save money.
And then restaurant week totally disrupts the normal flow of the establishment. My server friends complain about the following …
- “Amateurs” who are just there for a deal and don’t tip well.
- The absence of high-tipping regulars.
- The extra work for no extra money.
- A lack of business before and after restaurant week.
- The people who show up will rarely be back as many come from a long way.
Again, my manager friend said it was pretty much a nightmare. Some restaurants GAIN business by not participating; diners call up and want a refuge from the chaos of the restaurants participating in restaurant week.
In a spirit of total transparency, I persuaded my restaurant client to start a discounting program: if you sign up for the email database and stay on the email database, you get a free birthday dinner – an entrée or appetizer. It costs the restaurant about $15.
So I’m guilty, as charged, of discounting … when I’m generally anti-discounting. In direct response, we strive to stress value to avoid straight-out price battles.
The free dinner is one of the oldest direct marketing tactics and, as a direct response copywriter, I’m going to start with that one.
But after 3 years of the “birthday club” at Sir Edmond Halley’s, it’s been a big success. A small restaurant has built a significant and growing email database – always valuable.
We measure the results and a chunk of the database comes in for the birthday dinner. Some come in alone but the majority bring 3-4 people. And several bring big parties of 10 or more.
This rewards loyal patrons and encourages new people to visit the restaurant…which is difficult to find. The additional business, in terms of food and beverage sales, more than covers the free entrée. The program doesn’t interrupt the normal flow of the restaurant. If just a few of the newcomers become semi-regular patrons, that’s another big benefit.
Restaurants keep signing up for restaurant week so there must be something in it. But my restaurant friends all hate it – even with floods of people.
Ironically, I’ve sent emails to my client’s database touting that they DON’T participate in restaurant week … and the restaurant was busy during that week.
As I always say, discounting is dangerous. It must be handled very carefully.
I'm a direct response copywriter. I write direct response copy for clients around the world. Enter your information to the right for my free series: Seven Steps to High Converting Copy. Or contact me here if you have a project you'd like me to quote.
I'm also a Dan Kennedy Certified Copywriter for Info-Marketers.
Disclaimer for the above.
The Dan Kennedy Copywriter for Info-Marketers Certification is awarded to professional copywriters who have successfully completed a course of study of preparation for such copywriting. This Certification has not been provided by an accredited education institution. It does not constitute endorsement of or liability for any individual copywriter by Mr. Kennedy or any companies or organizations affiliated with Mr. Kennedy. The client's relationship is solely with the individual copywriter retained via any agreement.