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Yes Honey, There Really is an Easter Bunny
My friend Jim is a seasoned veteran of the restaurant business and is not real crazy about spending money on advertising. He’s a big
believer in the concept called "word of mouth." We sat down for a
cup of coffee and he told me about an exciting marketing deal that he
recently took on, and filled me in on the details. It was a popular
local program designed to drive traffic into his restaurant, and the
best part of all was that it would cost him zero out of pocket
expenses. Jim was happy and Jim was feeling very good about himself.
Jim was also in deep trouble.
The program was the ever-popular two-for-one dining book that would
indeed bring a big bunch of customers to his place, and the theory was
simple. These people would dine with basically one free entree and
would fall in love with his place and on subsequent visits (without
the coupons) they would pay the full price. They would also tell all
their friends about Jim’s wonderful restaurant (the much anticipated
"word of mouth") and Jim would live happily ever after. He’d probably
have to expand his facility, or even open a second location to handle
the influx of new people.
My first question to Jim was as follows... "Jim, why do I keep seeing
signs in so many restaurants saying that they no longer honor the
two-for-one program?" My second question was more to the point..
"Jim, have you taken total leave of your senses, and is it too late to
cancel?" He looked at me in stunned amazement, and couldn’t
understand my apparent lack of enthusiasm for his marketing
brilliance. OK, so what’s the problem?
The problem is found in the word pyschographics, and in a very loose
translation this is a word that defines the attitudes of a particular
group of buyers and is totally different than mere demographics. It
means that there is an entire segment of the population who will only
buy when there is a sale, and the thought of paying the full price for
anything is abhorrent to them. They love two-for-ones. They also
enjoy having their cocktails in the car, and their standard beverage
of choice during dinner happens to be water. Don’t forget to order
more bread and more butter and God help you if you happen to feature a
salad bar or anything else that’s basically free with the meal.
And when it comes time to leave a tip, you can be sure that they will
forget about the free entree, and they will subtract the taxes and
anything else that will help get them to somewhere around ten percent.
Your waitstaff will absolutely love these customers. And one more
thing, the next time you see them will be the next time they have
another coupon -- and never until then!
But let’s be fair, some of these programs actually support a charity
(you might suggest the charity should be the restaurants they help put
out of business). And it is true that most of my competitors use the
books, and if I don’t sign up, I have no shot at this business (if you
don’t sign-up, the real shot you have is to stay in business). But
what about all the ads that include my restaurant listing
(sophisticated diners avoid restaurants that take part in these
embarrassing programs).
I saw Jim approximately two months after our relaxing cup of coffee.
His accountant has suggested that this marketing decision will cost
him an extra $50,000 per year. And Jim also found out that he
mistakenly committed to a two-year program, and not the one year he
thought he was doing. There has to be a better way to lose one
hundred thousand dollars! By the way, Jim just sold his place and
has moved to Florida.
Page One (bignorthsky, Bob Bradley, Chef D., Terry Jannott, Rosie Saferstein) |
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Two-for-One