Boosting sales with item-level discounts: Does the strategy work?
- coolrahul2881
- Sep 26, 2024
- 3 min read
Updated: Mar 26
Running a restaurant is all about finding the right balance between keeping your customers happy and making sure your business stays profitable. One powerful tool that restaurant owners have used successfully is item-level discounts. When applied strategically, these discounts can not only increase sales but also bring in new customers, boost order volumes, and even help manage labor costs during slow hours. A study shows that on a popular delivery app, restaurant-funded discounts rose by 70% year over year. Here’s a real example of how item-level discounts worked for a restaurant owner and how they might work for you too.
The Power of Item-level Discounts
A restaurant owner decided to offer item-level discounts during happy hour and lunch. The results were impressive:
Happy hour sales increased by 33%.
Lunch sales increased by 23%.
By lowering prices on specific menu items, the restaurant attracted new customers who might not have visited otherwise. At the same time, existing customers were encouraged to order more, making the discounts a win-win for both the restaurant and its patrons.
How Item-level Discounts Can Help Your Restaurant
Here are a few key ways item-level discounts can benefit your business:
1. Attract New Customers
Discounts are a great way to get new faces through the door. Offering a deal on a popular item or a new dish can be enough to draw in customers who wouldn’t have come otherwise. Once they experience the quality of your food and service, they’re more likely to come back at full price.
2. Increase Order Volume
When customers see a discount on an item they like, they’re often tempted to order more. For example, someone might add an extra appetizer or dessert to their meal just because it’s on sale. This increase in order volume means more revenue per customer, even when you’re offering a discount.
3. Larger Orders Mean Bigger Sales
In this restaurant owner’s case, the discounts led to not only more orders but larger orders as well. Customers might take advantage of discounted items to buy in bulk for a group, leading to a bigger ticket size for each transaction.
4. Boost Sales During Slow Hours
Every restaurant has slow periods where foot traffic dies down. For this owner, discounts during slow hours helped bring in customers during times that are usually quiet. Whether it’s a mid-afternoon lull or late night, offering discounts can help fill those empty tables and generate extra revenue.
5. Balance Labor Costs
Keeping your team busy during slow hours is another great advantage of using discounts. When you generate more sales during off-peak times, you’re covering labor costs that might otherwise cut into your profits. Plus, it keeps your staff engaged and productive, ensuring they’re always ready for the next rush.
How to Make Item-level Discounts Work for You
Ready to try item-level discounts at your restaurant? using our software, you can implement discounts quickly and easily. Here are a few simple tips to get started:
Start Small: You don’t have to discount your entire menu. Start with a few popular items or items you want to promote, like new dishes or slow-moving inventory.
Time It Right: Focus on times when you want to boost sales, such as lunch, happy hour, or late night. Offering discounts during these periods can help drive traffic when you need it most.
Promote Your Discounts: Make sure customers know about your discounts! Use social media, email newsletters, and signage in your restaurant to spread the word.
Track Results: Keep an eye on your sales data to see which discounts are working best. If one discount is driving more sales, you might consider expanding it or trying something similar.
Item-Level Discounts as a Growth Strategy
So, if you’re looking for a simple yet effective strategy to boost sales, item-level discounts might just be the answer. Ready to take your restaurant to the next level? Give item-level discounts a try and watch your sales soar!
DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Cactus does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Cactus 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.
