It’s the gift (card) giving season. Are you prepared for the rush?
Immediate Cash Flow: Restaurants often grapple with cash flow issues, especially in a low-margin industry. Gift cards serve as cash up front, injecting much-needed capital into the business with minimal cost of goods sold. This immediate cash can be used for essential expenses like rent, inventory, staffing, and bills, making gift cards an invaluable lifeline for restaurants.
Increased Customer Loyalty: By giving diners the opportunity to give a dining experience upon their dear ones, you foster a compelling incentive for their return to your restaurant. When a patron acquires a gift card, the likelihood of them making a return visit is higher, and they may even extend the invitation to friends or family. This not only increases brand loyalty, but another benefit.
Attract New Customers: Attracting new customers is a perpetual goal for restaurants. Luckily, gift card marketing can play a pivotal role in bringing new patrons through your doors. Gift cards allow satisfied customers to become brand advocates, recommending your restaurant to others by providing a financial incentive. This can introduce your establishment to a whole new audience, with 44% of consumers stating that gift cards encourage them to try new restaurants they might have otherwise overlooked.
Marketing and Promotional Opportunities: Gift cards can be used as a strategy for stimulating foot traffic during quieter periods (e.g. slow days of the week). You can also provide discounts or incentives for gift cards acquired for seasonal promotions. These tactics serve the dual purpose of drawing in new customers while maintaining the interest of your established patrons. Gift cards can be effectively harnessed for upselling opportunities, presenting the chance to propose extra services to the recipient.
There are many ways we give gift cards, and each have their benefits and drawbacks. Here are a few options.
Physical gift cards are preferred by those that want a tangible connection. They’re also a good option when physically bringing a gift, such as a stocking stuffer or under the tree – an email with a barcode just doesn’t quite have that gift feel. They also have the benefits of matching the restaurant’s logo and branding.
There are generally two types of physical gift-cards: barcode/QR codes or magnetic strip cards. The first has a unique barcode or QR code associated with the purchasing customer, requiring a barcode scanner for redemption, ensuring efficiency. More secure than barcode-based gift cards, these cards provide durability and security, even though the magnetic stripe can wear out over time. They can be easily redeemed by swiping them through a credit card reader.
Integration with POS System: Probably the most important part of providing gift cards is ensuring your POS solution allows you to create, promote, and track gift cards efficiently. It’s essential to have a seamless connection between your gift card program and your restaurant’s point of sale (POS) system for a streamlined experience.
Consider Discounts & Special Offers: As with other businesses, gift cards are ultimately a way to attract business and “get you in the door”. Offering 10% off on your gift cards attracts your customers into getting a deal. When customers come to use that card, they may go over the allotted price and make up for that discount. Even if they don’t, the new patronage can be worth it all the same.
Consider Your Audience: Cater to the preferences of your target audience. While digital gift cards are favored by younger consumers, physical gift cards might be more appealing to older clientele or for special occasions, ensuring inclusivity. Offering both is nice, but if you have to choose, consider your core demographic.
Promote Across Multiple Channels: Your gift card promotion doesn’t need to be limited to a bottom line-item on your menu. Promote your gift cards through a variety of channels, both online and in-store. Digital display boards, email campaigns, social media, your website, and offline/online advertising can be effective ways to reach a broad and diverse audience!
Reporting and Tracking: Choose a gift card solution that provides robust reporting and tracking capabilities, allowing you to monitor sales, redemptions, and overall program performance. This data can help in making informed decisions for your restaurant’s success. Restaurant management software and most POS systems makes this process easy by allowing you to map gift card transactions.
Restaurant gift cards serve as a potent revenue-enhancing tool, opportunity to attract new customers, and ultimately grow your business. They can provide advanced cash flow to your business and boost awareness.
Implementing a successful gift card program requires seamless integration with a point-of-sale (POS) system, an understanding of the target audience’s preferences, and effective branding strategies. Robust reporting and tracking capabilities are vital for assessing program performance and making informed decisions.
To make the most of restaurant gift cards, a well-thought-out marketing plan is essential. Staff training, promotion across various channels, engagement with local communities, and offering discounts or bundling options are key strategies to consider. Collaborative co-marketing efforts with local businesses and schools further expand the reach of your gift card program.
In summary, a comprehensive approach to restaurant gift cards can drive revenue, enhance customer loyalty, and position your establishment for long-term success in the competitive culinary landscape.