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Give Away Free Food, Increase Revenue 300% -- And Also Build A Stronger Community
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.
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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Wait staff there
Speaking of which I'm off to my Tuesday special ... $1 shrimp tacos
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Food Costs
Pasta has the largest cost to price charged ratio due to the ease of prep and relative low cost of ingredients which is why you generally get a huge plate of it.
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Re: Food Costs
...which contributes to why so much of the American population is so fat.
Portion control in this country is out of control. Too many people extend their Costco value mentality to restaurants.
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Food costs should be no more than 35%, and the lower end entrees shouldn't be more than about 50-60% of the total bill.
So really, giving away the entree on average will still make about a break even check, plus you wait staff get tips, the place is business on a monday when it might otherwise be empty, etc.
It's a nice idea, something that has been used many, many times before in various ways, such as two for one, second meal free, etc.
Very little "new" here, even if the term "FREE!" is in there.
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Re:
Really people, no one cares if the model is new or old. They only care if it works or not.
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Oh well. We can always visit Denny's in Japan. Mmmm. Looks tasty.
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But ..
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Re: But ..
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Re: But ..
piratebay money in offshore accounts.
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already tried in Melbourne
At Lentils as anything, the staff don't have a fixed salary either.
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15% of free
I'll gladly tip 100%.
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Re: 15% of free
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Re: 15% of free
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Re: Re: 15% of free
What is the point of going to a "free" night if you end of paying the same amount?
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Monday is a slow day anyway
If we assume that the restaurant is a dine-in affair (rather than a takeaway) then the exposure of the owner to punishing costs is limited because there is a maximum number of diners who can claim at any one sitting and the cost of the food has been restricted by the offer (they aren't giving away the lobster thermador). The deal is probably limited to one free meal per sitting.
I dare say that it would be a different story if they were giving away as much beer as you can drink with a meal. There would be a lot of full plates and empty beer bottles in what was left of the restaurant!
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Taxes
I wonder if that will apply to this place?
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Re: Taxes
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Spending more in gas than you would have for expensive tacos... mmmmmmmmmm.
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Free at restuarants
BTW, the prime rib was $5.00, no other charges for the full meal.
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waiting for the lawsuit
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Free food is just great!
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free food
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