3 Long Term Effects of Restaurant Coupons | Business Software Solutions

Three Long Term Effects of Coupons & Discounts for Your Restaurant


In our blog post Should You Be Running Coupons for Your Restaurant?, we discussed some of the pros and cons of running coupons for your restaurant. In that post, we mentioned that restaurants are particularly susceptible to the negative outcomes of coupons. Modern computer systems for restaurants can make it easier than ever to run coupons or discounts, but that doesn’t mean that they are the right way to go for every restaurant. Today, we wanted to delve a little deeper into three of the long term effects that can result from running coupons and discounts in your restaurant.

Coupons and Discounts Can Eat Into Your Existing Revenues

When running a restaurant, it’s important to remember that anybody can use a coupon. Your regular customers can use coupons just as easily as people who are trying your restaurant for the first time. If too many of your regular customers redeem your coupons or take advantage of offered discounts, it can actually eat into your existing revenues without increasing your customer base. You have to make sure that the possible short term benefit of bringing more people into your business has to balance with maintaining your existing customer base long term. You can try to limit coupon use to new customers, but this is particularly difficult in restaurant settings and making the attempt can actually make your regular customers feel unappreciated. A customer loyalty program, on the other hand, rewards your regular customers for returning to your business and might be a better option.

Coupons and Discounts Can Impact Customer Return Visits

When coupons and discounts are run on a regular basis, it can lead to an unsustainable business model. If your customers feel like they can always take advantage of a special deal, they may begin to wonder why they should ever pay full price for your food and drink offerings. This can result in a large portion of your customer base only visiting your restaurant when a coupon is available. If you do choose to run coupons or discount programs for your restaurant, you should make sure that you are not doing it regularly enough that people become unwilling to pay full price for your food.

Coupons and Discounts Can Negatively Impact Your Brand Image

The unfortunate truth is that coupons and discounts, especially when they are run regularly, can actually have a negative impact on your brand image and the perceived value of what you offer. Short term, you may have more people in your restaurant. But long term, you may find that people begin to ask questions that lead to a negative impact on your company’s image. They may begin to wonder why your regular prices are higher than the discounted offer. They may begin to wonder if there is any value in buying your food at menu price. They may even begin to wonder why they should ever pay full price for your food. When people start thinking this way about a restaurant, it can actually cause them to discount the quality of the restaurant in their minds and they will no longer be willing to pay full price for your food. In the long run, consistently providing true value on good food is infinitely more important than getting a few more people to come into your restaurant.

Conclusion

If you are thinking about running coupons or discounts in your restaurant, make sure you weigh short term gains against long term effects before you make your decision. Using a good Point of Sale (POS) computer system for your restaurant can make you better at accounting for your business, helping you determine when and how often you can afford to offer discounts on your products. On occasion, offering coupons or discounts may be the right course of action. But, in our opinion, providing true value and quality service trumps any gimmick you can come up with to bring in a few more people. We also think that rewarding your loyal customers can be a much better idea for long term gains.

Should You Be Running Coupons for Your Restaurant?

If you’re running your own restaurant, you’ve probably wondered about running coupons as a way to attract new business. However, the decision of whether or not to run coupons is not a simple one, and many factors should be taken into account before making your final decision. While Restaurant POS Systems can make honoring coupons easier, we’ve put together a list of pros and cons that should be weighed before deciding if offering coupons is a good idea for your restaurant.


Pros of Running Coupons for Your Restaurant


Running coupons for your restaurant can potentially:


  • Result in a quick infusion of cash,

  • Help you quickly unload unwanted inventory,

  • Entice people to try your restaurant for the first time,

  • Lead to add-on sales of regularly priced items,

  • Attract first-time buyers who may turn into regular customers, and

  • Increase brand awareness.


Cons of Running Coupons for Your Restaurant


It’s important to note that the pros listed above are potential benefits and may or may not happen with your business. Unfortunately, restaurants are particularly susceptible to the negative outcomes of coupons. That’s why we’ll be going a little deeper into the cons of running coupons in your restaurant so that you can make an informed decision for you business.


  • Running coupons can be costly. As with any form of advertising, weigh the cost against the potential gains. And don’t forget to include anything you will need to pay to the coupon service in your calculations.

  • Coupons may not be a sustainable promotional strategy. Offering coupons can result in a large portion of customers who only buy the discounted item or only visit your restaurant when they have a coupon available. If you run coupons frequently, it can be difficult to get customers who are willing to pay full price for your food.

  • You can eat into your existing revenue. Offering coupons can actually result in a decrease of overall revenue if too many of your regular customers opt to use the coupons. In a restaurant setting, it can be difficult to limit coupons to first time buyers, so you may actually do better in the long run by offering some kind of loyalty reward system instead.

  • It can decrease the perceived value of your food. If you have a luxury or high end restaurant, it’s important to realize that offering coupons can make people perceive your business differently. Unfortunately, it can actually make people question the value of your food and wonder why they should spend money with you. Be careful in making your decision that it doesn’t damage your company’s image.

  • You can end up losing money. Make sure that you fully understand exactly what you can afford to give away. This requires understanding your profit margins and overhead well enough to know what you can discount, how much you can discount it, and how often you can afford to discount it. Understanding these numbers can be difficult without computer systems. For restaurants, it’s especially important to understand the labor costs associated with your product prices.


Conclusion


As we said at the beginning of this post, running coupons is not a simple decision. We hope that this list of pros and cons will help you make a decision that is profitable for your business. We’d also like to remind you that the right software and a good restaurant POS system can help you be better at accounting for your restaurant so that you can keep serving your customers (hopefully at full price) for years to come.

Updating Your POS System

Many business owners have different ideas about how to achieve success with their customers and their employees. They try unique marketing techniques and make an effort to appeal to these important people. Even though they go to great lengths to please everyone, the best way they can offer good service is through a well operating business. When glitches and kinks arise, customers and employees feel annoyed and unsettled. Prevent these discontent feelings by purchasing a new POS system that allows your business to run in it’s prime functionality.

Why Update Your POS System?

It can be hard for retail business owners to justify buying a new point of sales system if they have one that “works perfectly fine”. These managers bend over backwards trying to keep their store running smoothly and fail to see what the problem is. Nevertheless, an outdated retail POS system can only slow your business down. A system that requires much maintenance and patience is not the right system for a busy, thriving retail business like yours.

Upgrading to better technology for your store can only benefit your business. Some managers fail to see the lasting effects of new POS systems. They see a new system as a great expense that will change the flow of their business and confuse their employees. Instead, it’s important to view a POS system as a crucial investment that can impact the way you sell your products and provide customer service. Most POS system providers won’t leave you floundering with the new technology you know nothing about. They can help you and your employees adapt to the change in a gentle and subtle way. This way, your business won’t miss a beat.

In time, your new POS system will prove to be more helpful to your business goals. An upgraded system will give you more flexibility to work with your customers and provide them with service that will leave them smiling. Technology is advancing every day and you can’t let your business get left behind. You will be surprised by how helpful your new point of sales system can be in adding to the success of your retail business without harming the flow you have already set with your employees.