How Restaurant Discounts Drive Member Engagement

What makes dining discounts a crucial component of your member benefits program's success?

Because people eat out...A LOT.  In fact, I’m amazed by how frequently people go out to eat.

To gauge the prevalence of dining out, I turned to my colleagues and posed a simple question: how often do you purchase prepared food in a given week? From coffee runs to leisurely dinners and everything in between, the responses were varied, ranging from once a week to a whopping fourteen times.

So ask yourself: how often do you purchase any type of prepared food in a given week?

It's no real secret that Americans love dining out - the average person eats at a restaurant 4.2 times a week, which adds up to over 18 times a month. According to the Bureau of Labor Statistics, the monthly cost of eating out is around $232, or $2,784 a year. However, for those in the top 20% income bracket, this number skyrockets to a staggering $6,510 annually.

Let’s face it. For most of us, eating out is just part of our weekly routine. Whether it’s our preferred choice for meal preparation or a reward for surviving the daily grind, we all get varying levels of pleasure from having someone else cook for us. 

So just imagine how much joy you would deliver to your members if you gave them a way to spend less on their frequent purchases at local restaurants, coffee shops, and bistros.

By providing irresistible discounts for local restaurants, your organization can achieve several objectives, such as:

1. Increasing their relevance in the daily routines of their members,
2. Fostering goodwill among members,
3. Remaining at the forefront of their minds, and
4. Giving members a reason to anticipate your emails.

Dining Discounts Must Be Compelling

In order to truly captivate and engage your constituents, building a network of local discounts or utilizing a turn-key discount platform is essential.

However, not all dining deals are created equal.

To motivate your members to use them, you'll need to offer deep and irresistible discounts - which unfortunately, are hard to come by. Restaurant owners reserve their best discounts for special marketing reasons, making these killer deals a rare find.

Restaurateurs use discounts as a powerful tool to lure in new customers, while simultaneously avoiding giving discounts to existing customers who are already willing to pay full price. As a result, the best dining discounts are often found within closed networks, where restaurant owners can limit exposure to their discounts and offer them exclusively to a targeted demographic of consumers who are likely to spend more and visit more frequently than the average consumer.

These exclusive discounts are how restaurants keep their loyal customers happy and attract new ones. Unfortunately, without access to a private discount network, these amazing deals will remain out of reach for most.

The Popularity of Local Restaurant Discounts

The local, mom-and-pop restaurants scattered throughout America often create the biggest buzz. However, obtaining a discount at these popular eateries can prove to be quite the challenge. This is because the individual cooking your meal may also be the one making all marketing decisions.

Getting them to answer the phone is a challenge. Getting them to return a call is next to impossible. It takes time and commitment to get decision makers on the phone long enough to negotiate a discount offer and sign a contract.

However, signing up local restaurants can be a daunting task, which is why many discount programs opt to go without restaurants at all. And those that do settle for national chain restaurants with thousands of locations instead. But these chains often don't provide as much value to your members as you would hope, making it important to find a discount program that is willing to do the hard work of building out their network with local, mom-and-pop restaurants.

Why National Chain Restaurants Can Be Stingy with Discounts

While national chain restaurants like Chili's and TGI Fridays are recognizable and popular, they are often stingy with offering true, immediate discounts at the point of sale. Instead, they tend to rely on pre-paid gift cards that offer only modest discounts of 5% to 10% off.

National restaurant chains prefer pre-paid gift cards as a sly business tactic known as "breakage," where consumers often leave a small amount of money unredeemed on their cards, resulting in millions of dollars in profits for the restaurants.

It works like this: Say, for example, you buy a $25 gift card and spend only $23, most consumers will discard or lose the card before they ever spend the remaining two dollars. That unredeemed portion is called “breakage.” If you get millions of people leaving $1, $2 or even $5 unredeemed, you can see how that adds up.  

This study shows that more than $1 billion dollars in gift cards goes unspent every year. Restaurants also love pre-paid gift cards because it spurs higher spending.  This study shows that consumers who use gift cards spend 72% more than the value of the card.  When it comes to gift cards, the restaurants are the clear winner. Not your members.

Unfortunately, many consumers find restaurant gift cards and dining certificates to be more trouble than they're worth. Third-party providers like Restaurant.com have been criticized for their frustrating user experience, with customers often having to navigate a maze of terms and conditions before redeeming their certificates. Furthermore, many pre-paid certificates come with restrictions on dining during peak times, such as Fridays and Saturdays, when most people tend to eat out. These limitations can be a major turnoff for customers looking for a hassle-free dining experience.

Gift cards and dining certificates can be a major letdown for your members, leaving them with a forgettable or even frustrating experience. When a discount offer requires jumping through too many hoops, members will quickly lose interest and move on to something more worthwhile. It's important to offer instant, hassle-free discounts that your members can redeem with ease, so they can enjoy their dining experience without any added stress or frustration.

Where Can You Find The Best Dining Deals?

Finding the best deals is all about convenience - the ones that can be redeemed instantly with just a quick flash of your phone. But these types of discounts can be hard to come by, especially when it comes to local, independent restaurants. However, there are discount networks out there that have put in the effort to build up a substantial network of mom-and-pop restaurants across the country, so that you can enjoy hassle-free savings on your favorite meals.

These discount networks are willing to do the heavy lifting of building out their restaurant network with local mom-and-pops, regional, and national chain restaurants, as long as the redemption is quick and easy.

Ultimately, it is these discount programs that can truly captivate and engage your members with their irresistible deals. When members are aware they can easily find impressive discounts at their favorite local restaurants, it gives them a compelling reason to stay connected with your organization, fostering loyalty and boosting engagement rates.