The Secret to Avoiding the Restaurant Summer Slowdown
Every restaurant faces the inevitable “slow month.” It’s the month sales take a dip, sometimes a significant decline.
It happens every year. In most restaurants I've worked with, it’s August or September - both of which will be here before you know it.
Customers spend weekends at the lake, in the mountains, or simply spend time outside. Whatever the reason, sales can suffer in your restaurant during certain times of the year.
But, I’m happy to tell you there is a way to completely avoid the coming slowdown and make that month become one of your best every year.
It’s easy, works in any restaurant, and is exciting for both your customers and staff.
Should You Focus Your Efforts on New Customers or Existing Ones?
Keep in mind, it can cost up to 10x as much when you focus on attracting a new customer.
Therefore, the worst thing you can possibly do to offset your slow period is to pour a bunch of money into attracting new customers. It’s hard enough to market to new customers during “normal” times of the year - let alone when the business is slow.
Instead, use the advantage of your current customer base and get them excited about visiting more often. We call this connecting with your Hungry Tribe.
Accomplishing it is easier said than done. However, by working with hundreds of restaurants across the country, we’ve fine-tuned a system for turning slow months into annual winners.
This system isn’t dependent upon type of restaurant, check average, geographic location, or sales volume. It works almost every time if it is executed well.
People Love Winning
Have you ever watched what people do to win a $4 t-shirt shot out of a cannon at a hockey game? It can get insane.
Winning (AKA gamification) is the basis for compelling your customers to visit during your slow month. Give them the opportunity to “win” something during and watch herds of them show up.
This is what is referred to as the "No-Peek" method.
How it Works: The No-Peek System in Action
One of our customers has traditionally experienced a slow-down during two months of the year. Without fail, August and February sales were disappointing.
In 2011, we first implemented our No-Peek system for the local casual dining place with a sports theme.
In July, they handed out a sealed envelope with every receipt during the month. Each envelope is clearly marked with three important instructions:
- Don’t Open This Envelope (Hence, “No Peek”)
- Bring Back this Envelope in August
- There's a Prize Inside, and You’ve Already Won
They were shocked how interested, excited, and curious their customers were. Amazingly, over 38% of those customers brought back their envelopes in August.
Total sales for those customers retuning with envelopes was $78,439.00. Plus, it created an unbelievable buzz with both customers and employees.
The restaurant has repeated the No-Peek promotion every year since, and has no plans to stop.
Here’s How the No-Peek System Works (in Three Phases)
Phase 3 - Customer Redemption
Yes, we are starting with Phase 3, because it is the easiest and most fun part of the system, and makes the other two phases much more clear.
Best of all, Phase 3 is when you get to see customers enjoying “the win.”
It’s pretty simple, really. During the “slow month,” your customers bring in their winning No-Peek envelopes and open them in the presence of a server or manager. Every customer wins a prize (usually something with a cost of only a few dollars.)
All the instructions on what they win, how your servers handle winners, and how customers claim their prize is right on the winning certificate in the No-Peek envelope. It is a self-managing, self-executing system at this point.
All you do is sit back and watch your previously empty restaurant fill up with your best customers during the month…and enjoy the results.
Phase 2 - Distribution of No-Peek Envelopes
The month before your slow month, customers receive the sealed No-Peek envelopes. One is offered with every receipt during the month.
For example, if you want to boost business in August this year, then plan on handing out sealed envelopes in July.
Phase 2 of your No-Peek system is handing out your envelopes and watching your customers' eyes light up with anticipation.
Phase 1 - Set-up and Production of the No-Peek System
The design, creation, and production of the No-Peek system is critical to its success. Phase 1 is all about getting this done correctly.
Start With Your Prizes
You should have five prizes selected. List them on your envelope so customers can see what they might win.
Here’s the recommended value of each prize:
- Level 1 Prize: A value of $2 - $5. (A soft drink, etc.)
- Level 2 Prize: A credit of your average appetizer price, or a free appetizer.
- Level 3 Prize: A credit for your average entrée price.
- Level 4 Prize: A pricey gift, like a TV or iPad.
- Level 5 Prize: An expensive gift card from your restaurant.
Quantity of Each Prize
For every 1,000 No-Peek envelopes you are distributing, here are the recommended quantities to print for each prize:
- Level 1 Prize: 0 (print none of these)
- Level 2 Prize: 798
- Level 3 Prize: 200
- Level 4 Prize: 1
- Level 5 Prize: 1
You’ll notice that we recommend producing zero of the lowest value prize. The reason for this is simple:everybody expects to win this prize. And, when they don’t win it, they are thrilled! It adds an extra level of fun and excitement to your system.
Keep in mind that approximately 1/3 of your No-Peek envelopes will be redeemed, so not all your prizes will be given away. Statistically, you won't even have to worry about the expensive gift card or the TV - chances are it won't be redeemed.
Here’s What Your No-Peek Should Look Like
Now, you’ve got the basics in place for your No-Peek system. The only thing left is getting it designed and printed.
The look and feel of your No-Peek envelope and the certificates inside should reflect the story you tell about your restaurant. Use type, verbiage and colors which match your story.
Here are some design hints.
- Simple is better. Don’t over-complicate with extra words or images.
- Use dark envelopes.
- Include all handling and prize instructions on the inside card (so both servers and customers know exactly what to do).
- Make sure envelopes are sealed well.
Work with a trusted printer to produce your No-Peek system. We’ve found the entire No-Peek envelope system can be produced for between 30¢ and 45¢ each, dependent on quantity ordered. Give yourself 10-14 days to get it printed.
If you are planning on handing out more than 2,500 No-Peek envelopes during your promotion, then you may wish to consider using 6” x 4” scratch-off cards instead. These work as well as envelopes, and they are less expensive to produce when using higher quantities.
Restaurant Success Report
In The End, How Does No-Peek Help Your Restaurant?
Most importantly, this system helps your financial situation as well.
Recently, we ran a No-Peeking system for an old-school, been-around-forever, local restaurant with about 150 seats. Here are the highlights of their system and their results:
- 4,000 No-Peeks produced
- 1,416 redeemed (~35%)
- Total sales for customers who redeemed: $31,607
- Total cost for production and prizes: $5,676
- Food cost: $9,798
- Gross margin: $16,133
- Return on Investment: 284%
For every dollar they spent on the No-Peek System and their prizes, they received $2.84 in gross profit. After speaking to this restaurant, they felt like 80% of the revenue generated from the No-Peek system would not have occurred without it.
Of course, we can’t guarantee these results for you. Your results will be different. They might be better, they might be worse.
Before undertaking this promotion, you should check your state statutes and consult with an attorney to determine what laws - if any - govern the promotion in your area. Participants of your promotion should be directed to an online web page where your official rules can be viewed.
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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.