Using Gift Certificates and Coupons to Your Advantage

As in any business, there a variety of pros and cons to using coupons and gift certificates (GCs).  It just happens that, unlike other businesses, it’s difficult to avoid them in this one.  It is the cons that are most obvious.  They reduce your margin and generate customers who only come out when they find a deal.  They also tend to be brought in by amateur diners—guests who fail to order much and rarely eat out.

However, there’s a winning philosophy in this business that says the more behinds in the seats, the more successful the restaurant.  Coupons and GCs are a great way to bring in guests during slow times of the year.  They’re also a great way to generate new clientele, and an opportunity to showcase your restaurant and create long-term regular guests. 

There are many ways that coupons and GCs can be an asset to your restaurant when used properly.  They are a great way of thanking your guests, when offered as part of an exclusive email lists (which are an essential marketing tool).  Coupons can be attached to items with low food costs, such as chicken, shrimp or vegetable appetizers, or low-cost desserts.  They can also be attached to special occasions, such as birthdays and anniversaries. This gives you a chance to thank your guests while encouraging them to choose your restaurant for their celebration. 

Aside from typical retail sales, GCs can be used effectively for each of the following purposes:

Complaints: Using GCs as a remedy for complaints should be hand-in-hand with personal correspondence and follow-up dialogue.  There is one goal with complaints, and that is to win back the clientele.  A well-crafted apology, a modest GC, and a follow-up is a great strategy for winning back guests. They are your opportunity to overwhelm guests with excellent food and service.

Trade: Many operators use GCs as compensation for services rendered, and it’s a good idea.  Your cost drops dramatically and you gain a chance to win over a customer.  Many long-term customer relationships begin with a simple trade GC instead of monetary payment.

Donation: Participation in community charities may not fit into your business model.  However, they are a clever, low-cost way to gain advertising for your restaurant while helping a worthy cause.  The market that you serve likely has interests they consider worthy charities, such as a church, school, philanthropic auction or political group.  Donation GCs also give you a chance to win new guests.

Special Offers: Offering GCs at a discounted rate for retail purchase during certain times of the year, such as the holidays, is a great way to generate business and bring in new guests.  GCs purchased during the holidays are typically given away as gifts, meaning that they are often returned by people who haven’t visited your restaurant before.  This is a great method of cultivating new business while boosting sales during the holidays, and many restaurants have used it successfully.

In each case, GC holders should be treated as VIP guests in your restaurant, especially when they are first-time diners. They should be thanked for coming upon arrival, and their status as GC holders should be communicated to their server.  A visit from the operator or manager is appropriate, as is their acknowledgement that their experience is an excellent one.  This can happen through rapport-building and specific questions about their experience.  VIP treatment often includes a token of appreciation, such as an after-dinner drink, an amuse bouche, or tiny dessert. 

To be fair, there are pitfalls to coupons and GCs.  For this reason, many restaurant operators avoid them entirely.  Large chains tend to be all or nothing about coupons, and it’s hard to argue.  Flooding the market with coupons can send the wrong message to a customer base, and establish a business as the “coupon restaurant”. 

However, for independent and smaller restaurants, the advantages are often too great to pass up.  Ultimately, there are always new customer bases to covet and new marketing strategies with which to targeting them.  Using well-placed coupons and GCs in the context of personal correspondence, as thank you’s to your guests, and during the slow times of the year, can be a great way to generate traffic while minimizing cost.