David Farkas’ article in Chain Leader answers the question nicely.
One thing is for sure: These executives haven't changed their minds about discounting, a tactic that they say boosts guest counts but also pressures margins and weakens image. “We will never try to improve sales with a discount. It's a kiss of death,” declares Randy DeWitt, founder and CEO of 13-unit Rockfish Seafood Grill and five-unit Twin Peaks, both headquartered in Dallas, who has successfully used e-mail newsletters to maintain sales.
“From everything we know about short-term changes like discounting, it isn't the way to go. It digs you into a hole,” says California Pizza Kitchen Senior Vice President of Marketing Sarah Grover, who is managing the chain's database “more aggressively” than in the past.
“Discounting is a marketer's nightmare and never a sign of a healthy organization,” maintains Kendra Sartor, vice president of brand development for Tampa, Fla.-based The Melting Pot, where sales and guest traffic remain flat. Instead, she adds, “we have to find price-point opportunities.”
“Perhaps the most important marketing we do is to spend a lot of money on training managers to take care of guests,” he explains. “Our No. 1 goal is to turn guests into advocates.” That they come more often doesn't hurt either.
Great advice, train managers to take care of guests and don’t discount.
