Direct Mail Marketing and Coupons Boost Restaurant Businesses

International business management expert and author Peter F. Drucker said, “There is only one valid definition of business purpose—to create a customer. Companies are not in business to make things…but to make customers.”

There’s a lot of truth in that statement, especially for the restaurant industry. Extreme competitiveness, economic stresses and fickle consumers all combine to make restaurants one of the most difficult businesses to manage successfully.

Of course the good news is, the restaurant industry is incredibly healthy, with more consumers than ever enjoying dining out and no slowdown in sight. According to the National Restaurant Association’s 2006 Restaurant Industry Forecast, the nation’s 925,000 restaurants are on track to hit $511 billion in sales in 2006.

One of the ways restaurant owners stay ahead of the curve is by using direct mail marketing. They know direct mail derives its power from consumer acceptance, ease of implementation and tracking – and, most importantly, its ability to target the right audience.

Direct marketing consultant Keith Goodman, in a moderated National Restaurant Association “Table Talk” online discussion, noted “no other means of advertising can give you a better average return on investment [than direct marketing].” Goodman recommends that restaurant advertisers determine who their best customers are and then target groups that are similar. Asked how he would suggest doing that, he said, “If your restaurant truly attracts a cross section of the surrounding neighborhoods, then mail to everybody. If you find that a certain demographic type comes in and tends to order the more expensive entrees, focus on them. Doing a quick survey, say as part of a birthday club or special incentive, is a great way to establish the demographics of your customers.”

Demographic research, then, is a key element to a successful mailing. Whether you do your research on your own or mail with someone who has done it for you, your success rate is vastly improved when your message is presented to the people who are most interested in it.

And let’s not overlook the importance of coupons in a restaurant owner’s marketing campaign. Research from a study published in Cornell University’s August 2002 Hotel and Restaurant Administration Quarterly proved that restaurant coupons offer some great benefits. The study found that customers who redeemed a restaurant coupon were almost 7.5 times more likely to make a post-promotion repeat purchase than customers who didn’t use a coupon.

When asked if discount coupons are a good way to attract new business, Goodman replied, “Coupons are a great way to increase the retention of the mailing since they (consumers) now need to take it with them to the restaurant. This provides you with an accurate tracking device to help you determine the ROI from your
mailing. Test a few different offers and then focus on the one that gets you the best results.”

It’s clear that direct marketing and coupons work together to provide restaurant owners with a one-two punch to drive new business. But to get the most from your marketing budget, be sure to define your target audience, research your market, and test your mailings and offers.

In the nearly 40 years that Valpak has been working with restaurant advertisers, it has been proven that Valpak is a lucrative marketing tool for the restaurant industry. And, since Valpak consumers ask for money-saving dining offers in the blue envelope, they are very open to redeeming them. Combine that willingness to purchase with a nearly 90 percent open rate, and Valpak becomes a marketing partner that you can count on for success.