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.