Strategies for Last-Minute Discounts in Restaurants: Filling Empty Tables Effectively

The restaurant industry is unique in its operational dynamics, compared to the hotel sector. While hotels can often afford to discount rooms in the last minute due to low variable costs, such a strategy isn’t always feasible or profitable for restaurants. The food, which is a significant variable cost, leaves little room for such last-minute deals.

Variable Costs in the Restaurant Industry

For a hotel, the variable costs often consist of housekeeping and other miscellaneous services. The infrastructure and occupancy costs are largely sunk, making it easier to discount rooms. However, in the restaurant business, the costs for raw materials, such as food, play a crucial role in the financial equation. Disregarding these costs can quickly turn a profitable dining experience into a financial drain for the restaurant.

Can Discounting Ever Work for Restaurants?

While many argue against last-minute discounts, there are still some examples, such as Groupon and Restaurantweek, that suggest certain models may be effective. For instance, Restaurantweek in Amsterdam has been successful in encouraging diners to try a variety of restaurants, some of which may have had otherwise empty tables. This kind of event-driven discounting can bring in new customers and maximize seat occupancy during off-peak times.

Context and Target Audience

Edwin's question delves into the effectiveness of Restaurantweek as a marketing strategy, particularly for mid-range restaurants. Unlike chain operations with diverse customer bases, mid-range restaurants often cater to a more specific clientele. It is crucial to consider the target market, which might be smaller in scale but highly concentrated. By understanding and catering to this group, restaurants can create more meaningful and sustainable marketing efforts.

Marketing Strategies for Mid-Range Restaurants

As illustrated by the example of Restaurantweek, event-based promotions can be a valuable tool. However, for mid-range restaurants to succeed without resorting to discounting, it is important to focus on relationship-building and consistent, high-quality service. Here are some specific strategies:

Pampering Regular Customers: Engage with your most loyal customers. Providing them with special offers such as free drinks or early bird deals can enhance their loyalty and encourage them to spread the word about your restaurant. Utilize Social Media: Engage with customers through platforms like Twitter and Facebook. Create a FB fan page and offer exclusive deals or promotions to users who follow your page. Targeted Offerings: Simplify your menu and focus on your signature dishes. Understand that you might only get 80% of your business from 20% of your customers. Personalize your service to make them feel valued.

Conclusion

In the restaurant industry, last-minute discounts are not always the best approach, especially for mid-range restaurants. Instead, focusing on building a loyal customer base and creating a strong online presence through targeted marketing efforts can lead to sustainable growth. As illustrated by successful models like Restaurantweek, event-based promotions can be effective, but ultimately, the key to maintaining profitability lies in personal customer relationships and quality service.