Although failures of coupon campaigns in the eatery industry is driving my focus study in this article, parallels can be drawn easily between the food-serving industry and other business sectors. Readers in other circles can liken restaurant owners as service directors who own profit and loss (http://en.wikipedia.org/wiki/P%26L), food as products or services, and gratuity as commission or simply income to readily relate to this examination.
Coupon is usually extensively used but wrongly implemented
Using coupons as a brand promotion scheme is widely popular, particularly in the restaurant trade, yet most eateries do not achieve their intended effect and some even end up alienating their customers. The reason is that there exists a natural dissension between a restaurant owner and his employees which often demises a coupon campaign’s target benefits. This article suggests an approach that will guarantee employee income and quality of product and service under any coupon arrangements so as to captivate customer satisfaction and business growth at the same time.
The innate contention on coupon drives
Ever since Asa Candler (http://en.wikipedia.org/wiki/Coupon#History) initiated the coupon marketing strategy in 1887 to eventually transform the small-time tonic company Coca-Cola into an international behemoth, coupons have created a love-hate relationship between eatery owners and their employees. This strife is particularly acute in the restaurant industry because owners want to build and enlarge customer base at the expense of immediate profit when stewards prefer higher daily generosities over long term income potential. Restaurants rolling out coupon campaigns to increase customers without an existing alignment mechanism to tame this discord often harm rather than help the intended course.For many owners, it is acceptable to lessen profit by giving out coupons if they will acquire new customers because the lifetime value of the additional happy customers will normally far exceed the cash discounts given and price reductions frequently stimulate ancillary sales -especially on drinks which command very high profit markups – that immediately help their bottom lines. Although the ramification of enlarging customer base is good to the staffs as well, it is difficult for many to justify the potential instant gratuity impacts because a good number of patrons tip a certain percentage of their final bills, not the pre-coupon totals. Unenthusiastic, sometimes even hostile, wait staffs drive away coupon-using patrons instantly and those others who learn of the staffs’ service attitudes through word of mouth or from online venues like Yelp (http://en.wikipedia.org/wiki/Yelp,_Inc.) and Zagat (http://en.wikipedia.org/wiki/Zagat) progressively.
Two testimonies of failed coupon promotions – dissatisfied clientele
One sunny day in Houston in early August 2013, several coworkers and I decided to have lunch at a Thai house because one fellow had purchased a 25% discount certificate from restaurant.com. To avoid unpleasant surprise, he showed the coupon to the stewardess after being seated to ensure that it will be honored.It might just be our imaginations,we sensed however her smile went south when she saw the voucher. Overall, it was not an enjoyable lunching experience for any of us because on top of the chilled service, the meal volumes seemed to have been pruned and the tip was pre-calculated for us and included in the bill. Gratuity pre-calculated and included in the bill maybe common practice for a big group, but not for a band of only four customers. We talked over this subject on our way back to the office, and I doubt that we will ever go back to that place again.
Attendants suggesting customers to tip based on the pre-coupon total and sometimes even including their desired largesse in the bills as what we had experienced happen from time to time, particularly for large client groups. But this is hardly a good practice nonetheless.An incident(http://www.reddit.com/r/AskReddit/comments/130dag/last_night_a_waitress_reminded_us_after_using_a/) of a similar nature was reported online in November 2012 and generated almost 5000 comments in a short time. Not only had this restaurant displeased its diners, but also had it corroded its brand appeal. Restaurant owners really should be absolutely sure that none of the harmful elements – despised look, trimmed quantity, pre-determined tips – as described here will surface during their coupon drives.
Campaign fails without attendants’ backing
To accomplish the brand building purpose of their coupon maneuvers, restaurant owners need to make sure that the attendants will be enthusiastic participants and supporters of all voucher redemption. It is only when both owners and attendants commit to the success of the promotion that turning out customer-winning service experiences becomes possible.Coupons only bring customers in; ultimately it is distinguished dining experiences that will convert first-time skeptics into ardent frequenters. Coupons that are not packaged with exquisite dining experiences will likely hinder rather than enhance business growth.
The triple Q foundation is critical for customer contentment and loyalty
Let us take the behavior of romantic courtship as an analogy. People are extra careful of what they say, how they talk, how they dress, and how they act when they pursue their objects of romantic interest particularly during their first dates. Why should eating places behave differently when they want to court their prospective customers into faithful habitué? There exist three vital factors where restaurant owners must conquer before engaging in coupon drives. These three components, which the author named the triple Q, constitute the basis of superb purchase experiences that must accompany coupon operations:
- Quality of service: Coupon users must not be looked down upon. Any hint of annoyance by the attendants could pass right on to the customers and the hope of winning their return visits could forever be lost.Coupon holders are particularly sensitive to the waiting team’s service and attitude, and nothing could be a better elixir than outstanding service to transform doubters into devout admirers.
- Quality of product: Food quality – especially hygiene, freshness, look and taste –ought to be at their highest level. Using lower grade materials, stale ingredients, or cheaper substitutes to curb cost will surely transport coupon customers into the deserter camp.
- Quantity of product: Food quantity must not be clipped. Smaller portions or missing side dishes will not escape notice. It has been hard enough to get potential customers to come in; it would be an inexcusable oversight for owners to apply any petty cash savings ploy to blow their coupon expeditions. Skimming on the meal quantity to save a few dollars will most certainly deprive the restaurants future opportunities to serve these prospective customers again.
Crippling the triple Q principle is detrimental to customer enjoyment and the brand
If restaurants cannot deliver their triple Q to coupon clients, then it is better for them not to run these discount programs at all. Dropping on service quality, food quality, or food quantity cripples the triple Q core and demises the restaurants’ coupon programs. In fact, bringing in potential customers to irritate them with substandard dining experiences are not going to help restaurants to win new fans, instead it could cause the targeted patrons to spread negative word-of-mouth demotions that could even deplete their existing customer base, and at the same time tarnish their brands.Simply put, if a restaurant cannot offer their triple Q, then by all means drop coupon drives from its bag of brand promotion strategies.
A gratuity insurance policy is one key to attain triple Q
While owners are more likely to cede current profit to grow their clientele by delivering better values to patrons, wait staff are less inclined to tolerate decreased salary today. Many attendants work short term or part time, and some long term wait staff live paycheck to paycheck. Both types of stewards are not motivated to forgo today’s income. To get these employees to embrace a coupon push, owners must find a mechanism to keep attendants from losing their earnings. The author would like to suggest one system below that would reconcile the inherent friction on coupon campaigns between restaurant owners and their employees.
Owners could devise a fair compensation arrangement to guarantee the tipping income of any attendant who serves a coupon table in the following way. Tips left by the coupon customers will be counted as the owners’ revenue regardless of the tipping amount; in return the owners will pay the staff 15% perquisite (or whatever percentage needed to entice the wait staff to sign on to coupon promotions to gleefully serve their clients) based on the pre‐discounted bill total. This gratuity insurance policy should be welcomed by the wait staff because they are assured to always receive agreed upon gratuities from couponed tables, and owners should be willing to implement this scheme because it creates a higher chance for their coupon clients to obtain great dining experiences which in turn are more likely to entice return visits.
Service directors can equate gratuity as sales bonus/commission that tie directly to customer satisfaction and product pre-discounted prices. Examples of failed coupon ventures should be abound and service directors should be able to map our deliberation – issues and remedy – in the dining business to industries of their picking without any problem.
Businesses should not assume that coupon is always an effective branding development tool for them. They must provide the soil for coupon drives to blossom, and this soil is the triple Q ensemble. Service directors should also understand that the income discord between themselves and their employees is the single most important factor to induce subpar services, and that an income secured mechanism is the desired climate to allow the triple Q soil to bear fruit. Therefore, restaurant owners or service directors must have both the triple Q composite and income secured mechanism under their control before engaging coupons as their brand enhancement strategies.