from the nope,-free-doesn't-work-at-all dept
This year, it seems, there's been a big trend for restaurants to experiment with free food promotions. While I've been a bit skeptical about some of them, they do seem to be working wonders. David sends in yet another story of free food doing quite well for a restaurant. In this case, it's a pair of restaurants in Texas that are offering free entrees on Mondays. It's not all entrees, but apparently it's a pretty decent selection. Diners are still required to pay for any other food (appetizers, desserts, drinks, etc.) and (of course) tip. Apparently the promotion is doing amazingly well -- increasing the revenue on Mondays by 300%. While the profit margin is obviously down a bit due to the food giveaway, it's not that bad. The giveaway stuff was the lower margin items -- the paid food is higher margin. Plus, the restaurant is actually saving a lot of money because it killed its marketing budget, recognizing that this acts as a better promotion.
But, perhaps the most interesting phenomenon of all is that the restaurant has really used this "free Mondays" to better "connect with fans." Apparently, there's now a group of regulars, and it makes the overall restaurant feel more like a family gathering -- as patrons keep coming back, saying that "It makes it feel like it's a neighborhood restaurant." Those same people are coming during other days as well, now that they feel so comfortable at the restaurant, so it appears that it helps boost revenue on other days. Once again, when used properly, free absolutely makes sense as a part of a larger business model.
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