Don’t Give The House Away, You’re Better Than That

There’s a big difference between marketing and discounting, and it’s important to understand the difference if you want to be successful in making sales and losing your butt.

Discounting is when you offer a product or service at a reduced price to generate more sales. It’s best reserved for a new potential customer; therefore, it’s a new customer acquisition strategy.

Marketing is when you offer something of value to your customers to persuade them to buy from you. Or communicate through multiple media channels to stay at the top of their mind and let them know why they should return to your restaurant.

In most cases, it’s best to avoid discounting and focus on marketing instead.

Why Did You Open A Restaurant In The First Place?

Let’s start at the beginning, though. The important thing to guide you in ALL the decision-making in your business is that the primary goal of your business is to make money to provide for you and your family. When you consider the results of a decision, all outcomes need to support that goal.

You’re not in business to provide your product or service, feed people, or provide for employees. All those things are a by-product, the “why” of what you’re doing, but your overall goal is to make a living doing what you love to do.

Remember, Marketing Is Math

Discounting your prices means you can’t charge fairly for what you’re doing. Charging a lower price doesn’t support your goal. Most buyers don’t make their decisions solely based on price; premium prices will give you premium clientele. Don’t be emotional about money or your business. Make decisions based on the math.

A typical business owner sees cost and expense. A marketer of a successful business sees a return on investment. Let me repeat that…


I don’t care what your accountant says!

Look at anything you’re doing with marketing and say:

  • If I do this, what am I going to get back?
  • What’s my return on investment?
  • Do I like that exchange?
  • If it’s good, should I expand it?
  • Be in firm touch with reality and pay attention to the math.

You Will Never Win A Price War

To survive in business, you must offer more value than your competitors. You need to be the “better than…” option in your market to have longevity and growth.

Discounting and lowering your prices may generate more sales in the short term, but it will ultimately put you out of business because you’ll be selling your products and services at a loss.

When you offer discounts, you’re essentially telling your customers that your products and services are not worth the full price or that you are somehow cutting corners. This is not a good message to send.

Discounting Will Choke Your Restaurant

In contrast to discounting, marketing offers should be incentives that persuade customers to buy from you. For example, you might offer a free bonus for customers who spend over a certain amount. This type of marketing offer is more likely to persuade customers to buy from you, and it sends the message that your product and services are worth the full price and that you appreciate your customers.

If you’re discounting and charging too little, people judge your quality based on what you’re charging for it. If you charge higher prices, you have more money for marketing and more money to go and get other clients and guests.

You have more money to deliver a “wow” experience. That is what’s going to differentiate you from your competition, not a cheaper price.

One of my marketing mentors, Dan Kennedy, always said:

“He who can afford to pay the most for a new customer wins!”

To be successful, you need to focus on marketing your products and services and find ways to give added value for your customers without putting yourself in the red

Marketing Should Be Like A Faucet

Effective marketing offers and campaigns persuade customers to buy from you again, and again, and again (you get the picture.) They reward existing customers for their loyalty and patronage. This type of marketing is more likely to be successful in the long run, as it builds customer relationships and encourages repeat business.

It puts you in charge of the flow of customers to your business, building on the existing relationship you have created with people who already know your products and services and want to do business with you over and over.

Discounts tend to bring in price shoppers who will use their discount and never return because their sole motivator is the cheapest price.

Warning: Don’t train your customers only to buy when you offer a discount. That’s not marketing.

How To Market To Make You Money

So, what will work?

What can you do to bring in more business and grow your sales? Here are a few key components of marketing efforts that will bring a better return on investment than using straight discounts:

  • Use incentives as offers to motivate people to buy. Incentives could include free gifts, certificates for a future visit, special treatment or services, early bird access, contests, or rewards points. By offering marketing incentives, you avoid discounting, which can erode profits.
  • Premiums (a free gift) add value to your product – something extra that will sweeten the pot. To be effective, premiums must be desirable and relevant to the customer. If the item is too expensive, it will eat into your profits. If it’s too cheap, it won’t be seen as valuable. Find a happy medium that will still allow you to make a profit while giving the customer a great deal.
  • Target specific customer segments – recent visitors, lost customers, high- value customers (for this, you need to have a great customer database).
  • Create themed marketing that ties in with current events or events that are already on people’s minds – seasonal holidays, current events like the Olympics, an election, a local community event, or a pop culture reference.
  • Bounce back offers given to the customer who just spent money with you. These are the customers MOST LIKELY to spend money with you, those that JUST made a purchase, so influence it to happen faster.

The #1 Restaurant Promotion Of All Time, The G.O.A.T,
The A #1 Money Maker

The most successful campaigns we provide to our clients are bounce back campaigns – and hands down, the most successful one we do all year is our Red Envelope Campaign. It works so well because it’s given out during a busy month, and needs to be redeemed in a future window of time, a slow month. This promotion can be done ANY time of year, using ANY theme or event at your restaurant to catapult your sales.

The Red Envelope will boomerang your customers back into your business. The expiration date is typically 30 days – to encourage a faster return – and the curiosity factor ensures that people will remember to bring it back. It’s hard to resist a hidden prize opportunity.

Final Thoughts

The marketing ideas in this article are all designed to increase your customer base without discounting. Incentives, premiums, themed marketing, and targeted marketing campaigns will help you grow your business by making the most of existing relationships with customers who know what they want and need from you – not people drawn in through discounts that won’t return once their price shopper
instinct is satisfied.

Marketing is simple math. You want to make more money in sales than you spent on your marketing investment. It can feel like a risky investment for many small businesses to spend money upfront before any returns come back. Using the proven strategies we discussed above, you’ll surely see a sales bump. When you implement these principles correctly, marketing will become one of your best investments yet.

See a video from one restaurant owner who increased his sales by $110,128 using the Red Envelope Promotion. There are many other stories from restaurant owners who have doubled or tripled their sales during their slowest month of the year.

Michael Thibault

Known as β€œThe Done For You Marketing Guy for Restaurants.” International Speaker on Restaurant Marketing. Published contributing author of 4 Marketing Books. Industry expert on Google Searches and Review Sites. Recovering Independent Restaurant Owner and Caterer of over 21 years. And, all-around good guy.