Restaurant Owners, Conquer the Coupon Catch-22

by Rudy Vener

Published on this site: July 28th, 2005 - See more articles from this month

What restaurant hasn't used coupons at one time or another?

There is no arguing that they work. At least they do what you expect them to do, bring in the customers like crazy.

But at what cost?

Along with the big boost in sales, coupons bring big problems. Most of the coupons are used by your old customers. Your old and loyal customers who would normally buy your food at regular prices are now buying it at the discount. And there are a lot more old customers than new. The coupon inherently reduces your value proposition. No one who buys one of your pizzas at a discount will want to pay full price for it later, especially if they know that by waiting until they find another coupon, they can buy at the discount again. And how do customers who don't have coupons feel about someone next to them buying the same thing they are but at a lesser price? Naturally you are going to have some unhappy customers, it's human nature.

Wouldn't it be nice if you could tempt new customers with coupons which your existing customers couldn't use? Couldn't see? Wouldn't even know about?

This is the concept behind coupon codes for web coupons used with online ordering.

As part of your online ordering service, you can promote web coupons. Most of these web coupons are visible and can be used by anyone. They are simply a way to highlight an offer in the specials section of your online menu.

But not all. Some of your offers are invisible until the customer enters a coupon code during the online order process. Once the coupon code is entered, the hidden offer becomes visible in the special offers section. As a matter of fact it is moved to the top and becomes the first thing the customer sees.

Without the coupon code the special offer doesn't show up on the menu. In this way the restaurant can offer first time customers extraordinary introductory deals to get them to place their first order, without offering the same deal to existing customers.

But how do you provide only new customers with the coupon code?

When someone registers for online ordering, the online order system collects their email address. The online order control panel can create an email list of those who have registered, but never ordered. It is a simple matter to send this list an email that includes a web coupon and its associated code for the special introductory offer.

How do you prevent customers from re-using the coupon code?

The online order system's control panel lets the coupon code be changed at any time. When this is done, the special offer becomes invisible until the next crop of customers are given the new code.

In this way, new customers get a chance to use the offer, but cannot continue to use it once its code has changed.

By regularly changing the coupon code for the special offer and getting the latest list of people who have never ordered, you can limit your special introductory deal to only those real first time customers.

In addition, by changing the coupon code after some pre-announced time, you induce first time customers to take advantage of the special before the time limit has expired and it is no longer available.

In summary, web coupons with coupon codes let a restaurant offer very special deals to only first time customers and can easily prevent abuse of the special offers by regularly changing its coupon code. This also gives the restaurant owner the ability to create scarcity by time limiting the offer. Since current customers will not see the special introductory offer on the menu, they happily pay regular price. This is a good way to convert someone to a customer without lowering your value proposition, reducing revenues or causing customer dissatisfaction.



Rudy Vener is president and founder of Pizza Galaxy Internet Marketing Services. Rudy has combined his more than two decades of experience in software design with his love of pizza to help pizza operators market their restaurants to their local communities on the internet with online ordering, email marketing and other Internet services. Visit the Pizza Galaxy website at http://www.pizzagalaxy.com to find out how he can help you put the Internet to work for your restaurant.