Menu pricing is one of the most important decisions that you make as a restaurant operator. With already slim margins across the industry, you may be hesitant to offer food discounts at all. But as any business owner knows, promotions are a great way to drive sales and loyalty. By taking a strategic approach to discounts, your restaurant can reap the benefits and achieve your business goals — whether you want to attract new customers, drive repeat business, or increase profitability.
In this article, we’ll share the benefits of offering restaurant discounts, as well as tips and creative ideas to help you determine the right promotions for your business. We’ll also discuss how to successfully leverage DoorDash’s built-in marketing tools to acquire and retain customers with promotions.
What customers expect when it comes to discounts
More than ever, consumers seek out discounts before making a purchase. A 2021 RetailMeNot study found that 73% of Americans say that finding deals and discounts is the most important factor when considering a restaurant.
This trend will continue as younger generations gain more buying power — 74% of millennials and Generation Z use websites or apps to search for discounts and deals on restaurants.
Research firm Valassis found that when deciding between several restaurants they like, 54% of overall respondents and 60% of heavy (weekly) diners will choose the one that offers a coupon.
How to create a discount strategy for your restaurant
Before launching a promotion, it’s important to first take the following steps to help you choose the discount strategy that will work best for your unique needs.
- Determine your business goal: Different discounts achieve different results, so be sure to identify the business challenge you’re looking to solve. Are you trying to generate sales? Expand your customer base? Improve your restaurant profit margin? Increase ticket sizes? Drive loyalty? Focus on one or a few key goals and choose discounts that align with them.
For example, if you already have a community of dependable regulars, a loyalty program may not be your biggest priority. Instead, a referral program that encourages existing diners to invite friends will help you acquire new customers while rewarding your dedicated following.
- Analyze your restaurant profit margin: Your restaurant profit margin demonstrates what percentage of your sales has turned into profits. Make sure your discount program allows you to increase or at least maintain your profits.
Promotions that drive profitability include strategies to promote high-margin menu items, drive larger ticket sizes with upsells, or generate more overall sales. Rather than offering a discount on an already low-margin dish, brainstorm ways to bundle it with a higher-margin item. For help understanding your business’ financial health, download our free, editable Profit and Loss Statement Template.
- Know your customer base: Your discount strategy will depend on what type of restaurant you operate. Think about your customers — what motivates them to make purchases? What demographics do you reach (e.g., families, office workers, young couples)? Which days are your busiest? Which dishes are most popular, and which items are often ordered together? (Note that the Insights Tab in the DoorDash Merchant Portal provides sales and customer analytics, including popular menu items, busy times, new customers, and more).
The same Valassis survey found that 72% of respondents use coupons when trying new fast casual, family and fine dining restaurants for the first time. If you’re a fine dining establishment, perhaps a holiday discount would help attract new customers looking to splurge on a special occasion.
- Review different types of discounts: When launching a promotion, don’t limit yourself to a simple $5 off coupon. There are many different ways to entice customers with discounts — including taking a percentage off, offering a limited-time promotion, giving away a free item with a purchase, providing a discount after spending a certain amount, and many more. Experiment with a variety of promotions, but always make sure the offer aligns with your business goal.
Ideas for restaurant discounts and promotions
To get your discount creative juices flowing, here is a quick list of ideas for your next restaurant promotion, as well as the goals they’ll help you achieve:
- First-time customer discount: Looking to attract new customers? Give them a warm welcome by offering a percentage or dollar amount off of their first purchase.
- Loyalty program: Whether you integrate a points system into your POS, build your own app, or simply offer an old fashioned punch card, create a loyalty program with rewards for each purchase to entice repeat visits.
- Holiday promotions: Offer limited time discounts or seasonal menus to drive holiday sales and encourage diners to celebrate special occasions at your restaurant. Go beyond traditional holidays to capitalize on sports events, social media holidays (e.g., National Margarita Day) and cultural events that align with your brand such as the premiere of a popular TV show.
- Partner with another local business: Talk to other business owners in your neighborhood about offering joint discounts. For example, give customers 15% off their purchase when they show you a receipt from your partner’s store. This will not only drive sales, but help support your local community.
- Bundle menu items: Bundling items together is a way to provide convenient meals to groups while driving larger ticket sizes. Restaurant operators can create bundles or combos featuring multiple entrees for a family or group, or one entree with sides, beverages, or desserts.
- Offer free delivery: The same RetailMeNot survey found that 68% of respondents say free delivery is one of the most important factors when considering restaurants. This type of promotion gives customers an affordable way to enjoy your dishes at home — and DoorDash partners can easily set it up in the Merchant Portal.
- Buy one get one (BOGO) / Buy X, get Y free: Reward customers for purchasing a featured menu item by offering them a free item in return. Whether it’s two of the same item, an item of lesser value, or a discount on a second item, there are many ways to use this discount to increase ticket sizes.
- Tag a friend on social media: Expand your customer base by offering diners a discount if they engage with you on social media. You can launch a giveaway to encourage diners to tag a friend in the comments or post a photo from your restaurant, which will help grow your following and drive loyalty.
- Create exclusive email promotions: Another way to leverage your digital channels for promotions is to offer an exclusive promo code to your loyal email subscribers, or to give customers a discount when they sign up for your newsletter. For more creative ways to leverage this channel, download the free ebook The Ultimate Guide to Restaurant Email Marketing.
- Offer specials during slow shifts: Notice your Wednesday nights are consistently slow? Bring in crowds with drink specials, wine pairings, or new menu items to help drive sales on slow nights. You can also consider regularly hosting live events or performances, such as trivia, comedy, or local bands.
- Donate to charities: Give people a way to make an impact and help their community by offering a discount to anyone who donates to a nonprofit of your choice, or by donating the profits from sales of a certain menu item.
- Boost gift card sales: Restaurant gift cards are an easy, profitable way to acquire new customers and incentivize guests to dine with you again. Consider launching a promotion such as a free $10 gift card for anyone who purchases a $50 gift card.
How DoorDash can help kickstart your promotions strategy
When you partner with a technology platform like DoorDash, you get access to a new way to market your restaurant. DoorDash has tried-and-true restaurant marketing tools to help you drive customer acquisition and retention. Choose from our built-in promotions to make the most of your DoorDash partnership by improving your in-app placement, lowering delivery fees, and helping you reach new customers.
DoorDash partners can easily launch any of these promotions in minutes by navigating to the “Grow your sales” tab in the Merchant Portal. From there, you’ll also be able to manage all active promotions, review past campaigns, and track results to understand which strategies are top-performers for your business. Learn more about DoorDash Marketing and explore some of our most popular promotions, including:
- First Order, $0 Delivery Fee: Get prominent in-app placement and entice new customers by covering the delivery fee for customers’ first DoorDash orders from your restaurant.
- First Order, % Off: Offer first-time customers 15%, 20%, or 25% off of their DoorDash order with you.
- Order Again and Save: Win back previous customers who haven’t ordered from you within the past 45 days by offering a 15%, 20%, or 25% discount on their next order.
- $0 Delivery Fee: Get prominent in-app placement and offer reduced or free delivery for customer orders greater than $15.
- Spend $X, Get Y: Give simple $ or % off incentives to customers who meet a minimum basket size. You can use this to boost your average order value.
- Promote Menu Items: Promote specific menu items to new or existing customers. Use this to incentivize higher basket sizes, build momentum around new releases, or highlight your most profitable items.
Run custom promotions on your website with DoorDash Storefront
You can also test new promotions and attract new customers with DoorDash Storefront, which enables businesses to add a custom online ordering system with integrated pickup and delivery to their own website using DoorDash’s powerful logistics technology — with no monthly or delivery fees. Like the DoorDash App, Storefront also allows you to offer a variety of built-in promotions to your customers, including:
- Discount for customers (percentage or dollar amount)
- $0 delivery fee on all orders
- Discount for larger orders
- $0 delivery fee on larger orders
Simply log into the DoorDash Merchant Portal, navigate to the “Grow Your Sales” tab, then choose the Storefront promotion type, duration, and redemption method. You can either apply the discount to all customers, or create a promo code for them to use.
Toronto-based fast casual restaurant Naan & Kabob launched promotions on Storefront, creating a unique promo code for customers and promoting it across their marketing channels. The Storefront promotions drove an average 214% increase in weekly sales, achieving a 3.9X return on investment. Read more about Naan & Kabob’s promotions strategy.
Don’t forget to promote your promotions
With these tools and tips in mind, you’ll be well on your way to achieving your business goals. But your discount strategy is only as good as you promote it. Whatever promotion you choose, be sure to market it to customers via in-store signage as well as your website, social media, email, and other digital marketing channels.