Make me an offer

Posted on Analysis Dec 2011 - by Tandoori Editor
Make me an offer

From the post-Christmas downturn to the summer holiday period, restaurants make all kinds of customer offers to fight off the slump in business. Humayun Hussain takes an in-depth look.

No restaurateur worth his salt will be unaware of the lean month or two which follow the booming Christmas business bonanza. But then that’s not all. Restaurants, and in particular Indian restaurants, will often also feel the pinch during the summer holiday time. Partly because people are often away, partly because wisdom suggests that spicy and heavy curry dishes are the last thing anyone wants to eat during the scorching hot days.
 
As if the downturn in takings during those months wasn’t enough, there are also days just during the week when revenue is down and customers are hard to come by.
 
Let’s take a closer look firstly at the post-Yuletide slump and more importantly what can be done about it. After all, this is a time that presents quite a contrast to the preceding month of December, which is traditionally the busiest time of the year for a restaurant.
 
Yet, when punters have consumed their fill of tandoori turkey, downed all the wine and the office party revellers have concluded on their merriment – it is quite understandable that nobody wants to come back in January and start spending money again.
 
If anything, people want to detox and shed those extra pounds they have put on. Sadly though, it also means that come the other side of Christmas, restaurants can lose anywhere between 20% and 30% in revenue.
 
“Planning is all important when tackling any slow period, but in particular when dealing with the post-Christmas period,” says James Bulmer, director of MyJam Communications, a PR and marketing consultancy specialising in hospitality and events.
 
“I think it is all-important to understand the consumer and their spending habits. They are still keen to dine in January and December, thus restaurants must offer something new and exciting and cost effective, such as exclusive events and value-added incentives.  
 
A lot of restaurants also turn to heavily discounting the product during this period, to maintain levels of covers and thus retain loyal diners. Restaurants need to employ a combination of both for different periods of the week.
 
Our client MotiMahal, in Covent Garden, has just released their first book on the ‘Grand Trunk Road’ and they are hosting a series of exclusive dinners at the end of January focused solely on the food from the book. This is an example of the restaurant offering something other than the standard A la carte menu with the aim of encouraging new and existing diners to re visit in this period.
 
The renowned Northcote, in Lancashire, which is another one of our clients, albeit a modern British one, hosts an annual “Obsession festival” over the January period, where they invite some of the best chefs from across the UK and Europe to showcase their food at their restaurant.
 
Loyal diners at the restaurant know this is a one off opportunity to try some of the best food from around the UK, so are incentivised to dine. The diner will always reward the restaurant with creativity in the slower months, so long as the offer is value for money.”
 
Yogesh Datta, executive chef of both the London casual dining restaurants Bangalore Express and the upmarket Painted Heron, is also a great believer in planning early, though with a different type of offer to what Bulmer describes. 
 
“The way I like to tackle the slow business takings after Christmas,” he states, “is to provide a bounce back offer to encourage customers to redeem their offers during the slow months of January and even February.
 
The best time to launch the offer is mid November. We also observed that generally Indian cuisine is at an advantage during this season as people are generally fed up of traditional Christmas dishes like turkey, brussel sprouts and so on, and curry has always been an alternative during this time. Besides, spicy curries have always been a popular choice during extreme winters.”
 
There is the entirely different view as to how perhaps January can be tackled, which is to do nothing business wise. In other words, to take stock of things and do things you may not have time to do during the rest of the year.
 
Not only do you bite the bullet and face the slump, you use the month to do any pending decor changes and even use the time to make your marketing and other plans for the oncoming months.
 
One of the key ways in which restaurants attract customers is to use online portals for reservations, toptable being the leading one in the UK, featuring over 3,000 restaurants and seating over 200,000 diners each month.
 
“All featured restaurants on toptable benefit from a huge amount of online visibility,” says Lucy Taylor, head of restaurant relations at toptable, “and it is a very simple and effective way for restaurateurs to reach potential diners.  
 
At any one time we have thousands of popular restaurant offers available across the UK. The first couple of months of the year is typically a time when diners may be a little strapped for cash and are even more likely to be looking to eat out for less.  This is therefore a particularly good time for restaurants to feature an offer on toptable and a good opportunity to satisfy existing and win new customers.”
 
Of the other times of the year where business is down is typically from August through to mid-September. During this period, notes Bulmer, the challenge to Indian restaurants is to offer a slightly less spicy product.
 
“Top Indian restaurants, such as Rasoi, Moti, Cinnamon Club, Tamarind, the Quilon and Bombay Brassiere,” he adds, “have worked tirelessly on creating healthier and lighter menus for lunch periods across the year to increase lunch trade and now they have such flexibility in their menus that the summer shouldn’t provide an issue. Our job as their marketing agency is to communicate the message of these developments in offering.”
 
One of the traditional ways in which an offer of any kind or message can be projected is of course via advertising. But one has to take a considered approach on what, how and where to advertise.
 
“This can be a tricky area and I think there are a lot of variables to take on board,” says Rohit Kunwar, restaurant manager of the aforementioned Moti Mahal. “Restaurant budgets are often not big enough, so I’m a firm believer in investing money in collaborations with other companies such as local businesses, which are more beneficial and offer more for money.”
 
Bulmer states that advertising can be useful depending on the nature of the restaurant and its location.
He adds: “Like any release of information into the public forum, the important factor is about making sure the message is not only on brand but also directed to the right demographic for your restaurant.
 
With regards to mid-market chains and local restaurants, I feel there is still some merit in advertising. It is a good medium to remind local databases and tourists when picking up the paper or mag.
 
It’s all about the content though, and imagery has to reflect the restaurants brand image or it can risk looking tacky. For a top dining establishment, good press cannot be surpassed. There should be a slick communications strategy in place, which negates the need to advertise.”
 
Outside of advertising, one of the tried-and-tested methods of attracting customers via offers is doing discounted offers and value-added offers. The former is a simple percentage off the price of a menu or dish or even a two-for-one for instance, whereas the latter is where for example a complimentary glass of wine or champagne is given, or even a free side dish or dessert.
 
“At the top end of the market,” says Bulmer, “we favour the implementation of value-added offers, as we feel that for the long-term this is the best strategy for any business.” 
 
Discounted offers are short term, quick fix solutions, which can be often off brand. Toptable have their 50% off the food bill offers on the website and this is incredibly popular and useful for restaurants to fill their gaps when they are not that busy.
 
A valued offer is also determined by the clientele – and is normally appreciated by loyal customers and often focuses on repeat business. Often we find diners that take up discounted offers will have no loyalty to one restaurant and will move on to the next offer. Value-added offers are positive movements in strategy that allow the restaurant to let the diner know they are truly valued in the hope they become a regular visitor.”
 
Ultimately though, with greater methods and tools from where you can get the message out – from internet-based reservation portals through to social media such as Facebook and Twitter and even iPhone apps – are customer offers really necessary and do they downmarket the image of a restaurant?
 
“This is a very real struggle that the restaurant industry has faced and will continue to face with the economic climate the way it is,” concludes Bulmer.
 
“The challenge for any restaurant or group is to create subtle methods of giving value to the consumer in a downturn, as once the economy picks up it makes it incredibly difficult to change tack and put up your prices back up.” 
 
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