Restaurant Promotion Gone Afoul: The Most Expensive Free I’ve Ever Seen…

Ok, so this hit my desk in the early AM on 9/9/09: “Restaurant.com Stretches the Dollar with 90% off Gift Certificates”.

A limited time promotion they are running using the date of 9/9/09 as an excuse. I don’t care what day it is on the calendar this is a terrible promotion. Well, let me clarify that – this is a terrible promotion for any restaurant.com client. Who can deny it’s a good deal for the customer – A $25 certificate, which they usually discount to $10 anyway, is then $1 – yes, one dollar. And customers are indeed going crazy for it – a quick search on Twitter shows countless people sharing the news. That’s all well and good – but from the restaurant side, I find the promotion disgusting. I know if I was a restaurant on their site, I would call up and immediately cancel with them. Of course, they lock restaurants in for 12 months so that’s not really an option – and I guess they hope that restaurants forget about these kinds of promotions when it comes time to renew.

So, let me elaborate. I’m a restaurant and I’ve got a pretty nice place. And some lame-brain marketing person desperate for sales at restaurant.com makes my $25 certificate worth a buck! That makes me and my restaurant look like an ass.

I’ll say it again – like an absolute ass.

Here’s the deal…

• Restaurant ABC signs up for “free” to restaurant.com
• Restaurant ABC receives a decent looking presentation of their restaurant on the website
• Restaurant ABC decided on a couple of certificate offers to make available – i.e. $10 for a $25 certificate and decides on the restrictions for it – i.e. with the purchase of $50 or more..
  – Restaurant ABC agrees to redeem the certificates when they come in the restaurant

Ok, maybe that’s a good idea – I strongly say no it’s not – but let’s continue to go with it.

Here’s the rub…

• Restaurant.com doesn’t share any of the dollars from the sale of certificates with the restaurants.
• For example, in the case above, restaurant.com would receive the $10.
• Or as the case would be in this 90% sale, the $1
• Since they don’t have to worry about sharing this revenue and it’s all just digital certificates they hold a wacky sale like this.

Good for them, because consumers flock to buy these cheap certificates – well “coupons” really – it’s a very big stretch to call these things gift certificates. And they get some sales volume and new customers and media attention, etc.

But is it good for the restaurants – their so called “partners”?

Well maybe if the restaurant just wants someone to walk through the door at any price. But certainly not if the restaurant has any inkling of branding and image. It’s hard to look cool, hip and happening when they are shilling your $25 certificate for a measly dollar. It’s just the wrong impression. It’s just the wrong tactic. It’s just wrong.

There are countless ways to do better restaurant marketing. The marketing machine of restaurant.com has somehow fooled thousands of restaurants. Maybe because it seems easy and free, restaurants say what the heck and give it a try. Well, let me just say that “free” can sometimes be very, very expensive. And that is the case here.

Maybe you think different – that’s fine – post your comment. And forward a link to the restaurant.com people, they are welcome to respond as well.

All the best,
– Jaime

P.S. Don’t take this as a harsh criticism if your restaurant has chosen to use restaurant.com. Do take it as a constructive critique that you can do better with your marketing and be more creative and inventive and build true value with your marketing programs. That’s what we help with – we have tons of marketing resources for folks at RestaurantReport.com and RunningRestaurants.com.