Thursday, January 9, 2020

Dickey's Barbecue Pit Tries Driving Customer Traffic with Kid’s Eat Free at What Cost?

January can be a very slow month for chain restaurants and most chain restaurants leverage price to drive customer back into the stores according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. Dickey’s Barbecue Pit is starting of a new decade by offering free delivery and extending its popular Kids Eat Free Sundays to every day during the month of January.
Laura Rea Dickey, CEO of Dickey’s Barbecue Restaurants, stated “With these offers, families can enjoy an easy, delicious meal in our home or theirs throughout January, all while sticking to their budget.” Guests can receive free delivery when they order online or through the Dickey’s App. Kids Eat Free is available at participating locations with any $10 dine-in adult purchase.
So, one of the classic traffic drivers for restaurants is the Kids Eat FREE promotion. It used to be found mainly in family style restaurants such as the IHOPs and Denny’s of the world, but now as guest traffic is down across all categories, you see more and more types of restaurants running a Kids Eat Free promotion. The question is, "Does it work?" The easy answer is, yes it works to drive traffic, but the better question is, "Is it right for my business?"
Free is a very good price, and will always bring people in to get the free food. Look at the lines out the door each time a national chain has a free food giveaway promotion. The problem is, just getting people in the door no matter what it costs is not why you're in business. Sure, you need customers, but you need to make a profit on those customers. Your ultimate job is to make money for yourself and your investors, not just drive guest counts.
The typical Kids Eat Free promotion has some strings attached so you can be guaranteed to recoup your food costs. Some restaurants require the purchase of a kid’s beverage in order to receive the free meal. Others require the purchase of a regular priced adult meal in order to receive the free kid’s meals. These requirements protect you from going into a negative transaction territory where you're actually losing money on the deal. There's also often there a limit on the number of children allowed per adult, usually 2 kids per adult meal purchased, so you don't get a busload of kids from the local camp and only sell one adult meal to their leader while you give away 27 kids meals.
A price-based promotion like this does not build loyalty. It attracts customers who are price sensitive, and without the low-price incentive to come in, they won't continue to keep coming. It's akin to your coupon customers. If they have your coupon in hand this week, they'll visit you, but if they have your competitor's coupon in hand next week, they'll visit them. I was involved with a chain that offered Kids Eat Free on Saturday and Sunday nights, two very slow nights for this chain. While we promoted Kids Eat Free, guest counts grew quickly, but as soon as we took it away the counts went right back down to their previous levels.
The other factor to consider is the length of time you're willing to offer this promotion. Many owners roll out the kid’s promotion as an immediate fix to low guest counts on a certain day or daypart. Once that fix starts working, the increase in guest counts is like a drug and you want more and more. If it worked for Tuesday, let's also offer it on Thursday. And at some point, you've devalued your product in your customer's eyes.
Why should I pay $5 for this kid’s meal today when it's FREE tomorrow? And if you keep the promotion in place for any length of time, your customers grow to expect it. There may be a backlash of angry customers when you decide that it's time to stop offering the promotion.
So, should you rollout a Kids Eat FREE promotion? If you do, go into it with a plan. Know what it costs you. Know how much growth you need to offset the food costs. Prepare a marketing plan because you have to tell the world about it, otherwise you're just giving away money to current customers. And make an exit strategy. Offer it for the summer or a certain period of time, to keep customer expectations under control, create some urgency, and keep yourself out of the situation where customers expect to have their Kids Eat Free at your restaurant forever.
Are you looking a customer ahead?  Will your year over year customer counts be positive for January 2020? Success does leave clues.  Is your brand extending it value to more consumers in 2020?  Foodservice Solutions®, Grocerant Guru® has customer focused ideations you can leverage.

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