Revenue Management Solutions reposted this
Promotions and discounts have become the U.S. restaurant industry’s go-to lure for lapsed customers. But these deals aren’t always translating to profit and customary loyalty. Robert Sroka, an assistant professor of sport management at Towson University, said he goes to Shake Shack some Sundays, when the chain offers free chicken sandwiches with a minimum $10 purchase. He swooped when Domino's offered half off on parts of its menu and, after that deal disappeared, pivoted to its carryout promotion for a $7.99 one-topping pizza. “I get the deal that I want, and that’s usually all they’ll get out of me,” Sroka said. Restaurant prices are up around 30% from prepandemic levels, according to the Labor Department, and chains are struggling to keep diners coming. Traffic to fast-food restaurants was down this year through September compared with last year’s period, restaurant consulting firm Revenue Management Solutions said. Leading restaurant-chain executives are now having to gut-check whether discounts and freebies are paying off. Have any promotions enticed you to visit a fast-food restaurant? 🔗 Read more from Roshan Fernandez and Heather Haddon: https://lnkd.in/eJRa5B4Y
A spotless restaurant, correct and accurate orders, customer oriented employees that treat customers, all customers, with kindness and respect. It is fast food and it should be just that, quick to order, pay and receive. If I am going to pay almost as much as full restaurant prices for a meal, I expect all of this, flawlessly, or my next visit will not be to that QSR. This will create more repeat customers than value meals.
Jon temple
6d
Doubtful and not a great LONG TERM strategy.. My recommendation, provide them a FREE service that cost you nothing, and gains you EVERYHING! LEGENARY GUEST SERVICE! Steps of service plans, new training, and employee empowerment to enhance your teams experience levels!
what do you get when you offer something for free? answer cheap people who will never be a real customer. ask red lobster and the buffet joints
Jason Price
5d
They are temporary boosts to revenue but the costs add up. And the giveaways tend to not be sticky as the customers that utilize them stop coming when the freebies stop. Building customer loyalty and buying customer loyalty are two very different things.
Working at Jimmy John’s for 9 years I have had the experience first hand in how sales have dropped. We use to need 5 drivers for a lunch rush now it’s just me.
Shari Zimmer
6d
Very informative
Antonio Roa
5d
Very informative
I agree!
President and Founder, Dinner With Our Friends
6dI agree and as a previous operator turn supply side it’s painful to see deep discounts to build guest traffic when great options exist. The principle that states it’s not wise to try to fix pricing through promotion. It’s 100%true, and if your products are always on sale, they never really are on sale. I believe too many spectacular businesses might have felt it necessary to veer from the initial plans that made them successful and are now working to be all things to all people. That ends up feeling as though the group will be something like the “Jack of all trades, master of none”. Of course, that’s just a thought and I can call out several chains that make it work but I’m guessing they’d be able to say that 80% of their sales are concentrated in possibly 20% of their menu items. It’s exciting when you can offer your teams the opportunity to explore plans that offer new ideas that provide original programs to build long term volume and profit. They’re there, you just have to look.