Saturday, January 19, 2013

Do “Kids Eat FREE” Promotions Work? Guest Blog by David Archer

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 Dennys 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 kids beverage in order to receive the free meal. Others require the purchase of a regular priced adult meal in order to receive the free kids 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 a limits 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 much like 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 kids 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 kids 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.
Since 1991 retail food consultancy Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more on Foodservice Solutions® Bing or Google Grocerants or visit, or Facebook Steven Johnson

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