Singing for their supper: why casual dining needs to change

In my wallet, I have two 30% off coupons for Pizza Express. Alongside them, I’ve got some random membership card that entitles me to 40% off at Pizza Express. Oh, and… hang on, yep, here it is: another Pizza Express saver – this time a £10 voucher earned with supermarket loyalty points. That’ll keep the toddler in “Pat A Pony” pizzas for the next few weekends (he seriously needs to learn how to pronounce the word “pepperoni”).

Thing is, I didn’t have to do anything to get these coupons. I didn’t scrub dishes in their kitchens, or win some kind of competition. I didn’t even have to like pizza (I’m ambivalent). Pizza Express just gave them to me because that’s what casual dining chains do these days. They discount. Relentlessly. Aggressively. Dementedly. To the point where it’s no longer about attracting new business or inculcating loyalty, it’s simply a matter or keeping up with the Jones. Or, to be more precise, the Garfunkels, the Carluccios and the, um, Nandoses.

The rest of retail already went through this and – thank god – is finally starting to come out the other end. The turning point arrived last Christmas, when some high profile stores, including John Lewis and Next, drew a line in the sand and decided not to discount until the turkey had been eaten and the Queen had spoken. Meanwhile, everyone else continued their annual race to the bottom and the high street became a pre-Xmas “sea of red” (© Michael Sharp, CEO of Debenhams) as a million and one scarlet “XX% OFF” signs flooded the shopping districts. But here’s the thing: the big winners over the holiday period were the retailers who’d held off on discounting, not the ones who’d dropped their prices quicker than a butterfly in a weightlifting contest.

That came as quite a shock to the sector in general. One of retail’s venerable stand-by tactics wasn’t just looking tired, it was actually damaging the bottom line. But it didn’t come as a surprise to anyone who’s been studying the market: generic discounting has categorically reached its sell-by date. It’s blunt, it’s expensive and, rather than helping you to stand out, it actually camouflages you in a swamp of similitude.

So, has the casual dining industry learned from this? Has it heck. In fact, it’s learned no more from this than it did from the Groupon fiasco of three years ago, when a desperate scramble for exposure and acquisition led restaurants across the land to offer dangerously devaluing savings to deal-hunters – nomadic one-shot customers who had no intention of returning as full-price punters, and every intention of whoring out their stomachs to whichever competitor Groupon waved in front of their snouts the next time they got peckish.

Where once it was Groupon and Living Social owning restaurants’ customers and charging them for access, now it’s the voucher clearing-houses, sites like vouchercloud and HotUKDeals in Britain and RetailMeNot and Valpak in the States. These aren’t vibrant communities of food-lovers; if anything, they’re the gastronomic equivalent of tax loopholes. But, this – as the common misconception has it – is where the people are, so this is where businesses need to be. But is this where the people are, or simply where they go when they want to pay less for their lunches?

If you really want to put your brand in front of people where they’re really looking, there’s one place you actually need to be (especially now that 80% of our online time is spent being social): on their Facebook timelines and in their Twitter feeds. And I’m not talking about paid placements, or the lamentable 2% organic reach your corporate posts achieve among your fans. I’m talking about your existing customers telling your next customers about your food, your experience and, by all means, your offers. Those are the conversations which foster loyalty, drive new business and help elevate you above the generic that’ll-do-ness of a local kebab house.

But how do you get there? Well, there’s two ways. First, you could take the Chipotle approach and run a brilliant social media giveaway à la their #burritowatch campaign, where customers speed-read a hidden URL in a video to claim free food. The ups? It’s entertaining, it’s on-brand and, done right, it’ll get you some valuable earned media. The downside? YOU’RE GIVING AWAY FREE FOOD. As with all competitions: once the noise is over, what have you actually achieved? Significant losses, trashed price perception and a database full of people who’ll actively go to great lengths not to pay for your product.

The alternative? Ditch the freebies and those dumb, fait accompli discounts which no one ever shares – and start offering smart, dynamic rewards instead: offers which depend on sharing, which improve and improve as more and more people participate. That might mean a coupon which increases in value as more people sign up to claim it. It might mean added extras in return for bringing new customers to the table (if you’ll excuse the pun). A thousand people sign up, everyone gets a free starter; 5,000 means a free bottle of wine, etc. You can slice and dice the exact offer any way you choose – the important thing is that you don’t just scratch their backs, you get them to scratch yours first.

Customers respond to this kind of thing. They understand that, unless your product really is worth less than its billboard value, any savings they accrue ought to be earned. They also respond to gamification – the chance to prove they’re one of your best customers, who gets the full red-carpet-treatment in return. So, build some of that in, too. Offer the customer who persuades the most friends to try you out a trip to your spiritual home in Naples, Mexico City or New York. Offer the customer who spreads the word most successfully a catered party for their friends and family. It’s a simple formula: communal rewards to inspire mass sharing, personal rewards to trigger passionate evangelism.

And it’s so easy to get started. You already have the perfect seed audience, a ready-made advocate army of happy customers waiting to be fired up and let loose. You already have leeway in your margins, capacity to discount to the right people, in the right way. All you need to do is put the two together, and watch the sparks fly.

It’d be great if Pizza Express tried something like that, instead of blindly shaving the bills even more than the parmesan. In the meantime, you have to wonder why they even bother to print prices on their menus at all.

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