Frequent Diner’s Club

The coupon is as American as apple pie, and American shoppers love a good bargain. Some people love to clip coupons and some feel that it is beneath them, that somehow using a coupon makes them less of a person. I’m not quite sure I understand that one, but to each his own. Despite American’s aversion to haggling, there is no doubt that there are a lot of goods and services in America with variable prices. It is just that in most cases, instead of asking for a deal, you have to know about a deal ahead of time. This usually means knowing where to find the coupon.

Similar to the stories of three people in a row of airline seats having paid vastly different prices for seats next to each other, in the same way, three diners may all be paying different prices for the same entrees. Whether companies want to admit it, the same is true for many other products and services as well.

The internet intensifies this phenomenon of variable pricing and has the potential to spread your coupon beyond those you intended to give it to. The most famous story is the story of the free iced coffee coupon that Starbucks distributed to some of its employees encouraging them to share it with friends and family. The problem is that one or more of those friends and families posted it on their websites and suddenly Starbucks was facing more redemptions than they anticpated. They chose to stop accepting the coupons altogether, touching off a negative PR firestorm.

So, how can restaurants make technology work for them instead of against them? The first thing that all restaurants should be doing is trying to identify their most frequent patrons and engaging them in a meaningful dialogue. In order to have this kind of dialogue the restaurant must be careful about the kind of communications they send, and seek to offer personalized opportunities that occasional diners do not get. Imagine a restaurant that is used to having 70% or more of its reservations for the evening full by 6pm and the rest of its capacity filled by walkups, but one evening it is only running at 30% full by 6pm. An ordinary restaurant would just suffer through a poor night.

A smart restaurant might take advantage of their preferred diner program to text the members that live within ten miles of the restaurant to let them know that if they come in this evening that they can choose a special price on the evenings’ special or have the evening’s special appetizer or dessert for free. This helps the restaurant fill spare capacity, helps loyal customers feel special (and even more loyal), and will the reduce the amount of food waste.

A restaurant that tracks preferred diner’s tastes, might be able to organize special events that speak to the preferences of different customers on slow nights, or possibly allow the restaurant to draw in certain customers on nights that certain specials are offered that might please a certain group of customer’s palettes. There is also no denying that pulling in customers on their birthdays (with a free meal or glass of wine) tends to pull other people along with them. Are there other occasions that you can think of an offer that you could provide that might encourage the preferred diner to bring others along with him or her?

Are you using your loyalty program to fill spare capacity?

Are you really using it to reward and encourage loyalty?

@innovate