Restaurant gift cards present opportunity to help sales
Source: National Restaurant Association
As coronavirus disrupts the U.S., restaurant owners and operators are looking for alternative ways to create much-needed revenue for their businesses.
One way is promoting the purchase of online and digital gift cards, especially with everyone social distancing.
Creating instant income
Gift cards represent an instant source of revenue, something that’s especially important for small, independent and local restaurant businesses right now.
For consumers looking to support their favorite restaurants, buying these cards is a great way to help without leaving home. Card sales act as an immediate cash infusion for restaurants struggling to stay open.
Operators like Matt Fish, the chef-owner of Melt Bar and Grilled in Lakewood, Ohio, just rolled out a new Spring Bundle gift card promotion that gives customers who buy $100 worth of gift cards an extra $25 to spend. It is an offshoot of the chain’s holiday gift-card promotion.
“We thought it would be a way to generate some much-needed income. The residual revenue will help us pay our bills, keep staff, and keep the kitchen open.”
The company is using its website, social media and weekly email blasts to its database of 85,000 customers to market the program.
With nearly 80 million Americans practicing social distancing to reduce the spread of coronavirus and a growing number of states issuing stay-at-home orders, restaurant sales are suffering.
The National Restaurant Association projects that the industry could lose at least $225 billion and five to seven million jobs over the next three months.
According to Fish, Melt Bar’s sales are already down 60% and he’s been forced to lay off 210 employees at 10 locations. “It’s really bad. I’m hoping I can bring some of them back as business continues,” he said.
How gift card programs help
At this uncertain time, creating additional revenue is crucial to survival. That’s why implementing a gift-card program could be particularly important now. Here are four reasons why:
- Gift cards build revenue. The restaurant gets the cash up front. When the card is redeemed, and the bill is more than the amount on the card, customers make up the difference. If they spend less than the card value, they’ll likely order again to use up the remaining balance.
- Cards create loyalty. Successful gift card programs keep customers coming back for more. Almost 3.5% of Starbucks’ sales come from its gift card program. That’s why it’s important to design a program that incentivizes customers to reload their cards for frequent purchases and return visits.
- They are free advertising. Putting your restaurant’s branding on the gift card is a good way to advertise your business.
- Gift cards are easily accessible. If you offer a digital card option on a smartphone app, customers can buy or give them anytime, anywhere. That’s important in today’s climate.
At Rocklands Farm Winery in Poolesville, Md., COO Shawn Eubank said gift cards – along with its takeout, delivery and retail sales – is helping create enough revenue for the operation to retain its small salaried staff – for now. He also said it’s strengthening the bond the business has with the local community.
Rocklands, which operates a restaurant and retail shop on the premises, promotes its gift card program with twice-weekly email blasts to 10,000 customers, and on social media, especially Facebook and Instagram.
The cards, a small part of Rocklands’ sales, create cash flow, which is so important now. “When something like this happens, cash is king,” he said. “It helps keep operations going.
Cards are also a key way for people to support our business. We’re leaning on our community and are so thankful that people are willing to go out of their way to contribute dollars in different ways.”
5 tips to get you started
- Keep it simple. Make it easy for customers to buy your cards. You have to have a seamless checkout process so they can make the transaction.
- Sell to the right customer. When you’re ready to begin marketing the cards, make sure you advertise it to the people who are most likely to purchase your product or service. For example, if you are a local business, market it to the immediate community.
- Know your audience. Make sure to target your followers on Facebook, Instagram, LinkedIn and Twitter. Hit up GenZs on TikTok.
- Suggest uses: Gift cards are good for personal use, but many customers are buying cards to treat healthcare workers and first responders to meals.
- Be honest and clear. When you share your message, speak from the heart. Have a narrative that explains why you need the support, and also why your gift cards are a value to customers to use now, later or to give away.