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Marketing to Penny Pinchers

How to get people to spend when they don't want to spend.

The key is perceived value: giving customers a deal but making then think they got a steal. BonnieRiggs, a restaurant industry analyst at NPD, is a believer. "It's not necessarily the cheapest price," Riggs says, "but the perceived value that consumers see."

But anybody can offer an eye-popping deal—just slash prices. The trick is making that deal profitable.

Some operators who do it right promote their deals with unique, low-cost marketing efforts, such as blogs on their web sites, rather than by conventional advertising.

However, it's wise to promote deals with a degree of caution. You don't want to be locked long-term into a low-priced menu promotion when the economy improves. In addition, one might think twice about offering discounts on Friday or Saturday nights, which are traditionally the busiest for dining out.

To encourage customer traffic, some operators are offering new value points on their menus. One example is the "choose-your-own" meal deal, which invites guests to select several menu items for a fixed price. It's an effective way of boosting the value customers perceive in a restaurant.

Excerpted from Restaurant Business, March 2009

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