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Profitable Promotions

Avoid the Pitfalls of Promo Blunders

January 29, 2013 By: Alissa Ponchione


Hosting promotions is a huge part of the hospitality business. One-off promos, holiday events or weekly offerings, promotion planning requires time, knowledge and an understanding of the customer. Even the most determined owner, however, can’t account for promotion blunders.

Tim Kirkland, CEO of Renegade Hospitality Group, said owners and operators can easily fall into the trap of planning a promotion and hoping customers will come rather than targeting a demographic and focusing the promotion to them. After putting the promotion together, “the last step is, we sit back and see who wants to show up,” he says. “That’s an old-school way of designing a promotion.” He continues by noting that this is a flawed system because we “wash all our media with this promotion and miss a lot of people.”

Promotions can go awry if there’s not enough time or a team dedicated to the event. “Simply not allowing enough time to properly plan and put the promotion together, then communicate it to their customers,” is when promotion mistakes happen, explains Glenn Schmitt, founder and president of MarkeTeam. “With all of the responsibilities operators have, often planning for upcoming events gets pushed for ‘hotter’ priorities.”
 

Common Mistakes
One of the major blunders owners make is focusing on deep discounts instead of value. With value-add marketing, the customer is identified and owners know those customers ultimately will help their bottom line. “Discounting is the devil of promotions,” Kirkland warns.

With promotions, it’s about making new guests into regular customers. “If I attract someone with a discount, they’re not loyal customers,” he says. “These low-value customers ping pong back and forth.” Those customers will always find something cheaper. 

“Promos should be designed to showcase the best of your business,” Kirkland explains. “High-value guests value something other than price; they value imported beers and exotic flavors. The big mistake is selling the worst beer and the cheapest food, discount it and get low-value customers.” Instead, he says, market the top-shelf liquors and signature beverages. “That’ what your competitor isn’t willing to duplicate,” he says.

Another common mistake, Schmitt says, is one-day only promotions. These types of promos “makes it really hard to be successful,” he adds.

His advice: extend the events—even holidays—into multi-day programs. “Think Cinco de Mayo weekend instead of just May 5,” he says.
 

Promotions That Work
Schmitt suggests creating a promotion team to spread out the responsibilities and keep the timeline on track. Beyond that, he says that a promotion calendar helps bar owners plan ahead for the holiday and sports events throughout the year. (Hint: Take a look at Nightclub & Bar’s Promotion Planning Calendar by clicking HERE)

The goal is to create seasonal promotions that can be built on and repeated year after year. “Start year one with a manageable-sized program and tweak; adding elements each year as you grow the event or promotion,” he says.

For Kirkland, he said that he likes to start with what the customers want and plan the promotion around that. For example, at one his clubs, Kirkland noticed the venue was always full of bachelorette parties. To capitalize on this crowd, Kirkland and his team designed a promotion based on them, “rather than designing the promo first to see who it appeals to,” he says.

First, he noticed that bachelorette parties showed up adorned with accessories from necklaces, lollipops, T-shirts, etc. So, Kirkland went to the novelty shops where these items were purchased, and put posters up in the store promoting a bachelorette VIP evening, which included a decorated table, streamers, a bottle of Champagne. If the bachelorettes spent $50 at the store, they’d get half off of their bar tab for the night.

“We saved our media presence in tens of thousands of dollars,” he says. “We went specifically for that set and would appeal to that set. We design big promos with a customer in mind.” Kirkland continues by stating that “our job is not to get people through the front door. Our job is to convert people that come in to becoming regular customers. You only make money when people come back” and well planned promotions certainly help.

 


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