Food & Beverage: How to Calculate the Real Value of Coupon Deals - By Ken Burgin

We're attracted by the idea of hundreds of new customers, but concerned about the tiny profit margin and the 'desperate discount' image it may give us. Will all those 'new best friends' really return?

Watch the short video below to see how the sums can work in real life, and think hard about the issues listed below. You can also download this calculator and use it with your own figures.

Coupons may work for your business if:

• You've got empty capacity or a new business that needs a 'kick-start'…and you can handle a sudden rush without compromising quality.
• People won't see the bargain price as an indicator that you're normally over-priced - can you ring-fence this deal from your usual offers?
• You share the deal with your regulars, so they don't get offside.
• You have options and systems for upselling, if the sales deal isn't 'all inclusive'. Ideally, the add-on items will have good profit margins, to make up for what you've given away.
• You have a good system to gather the contact details of all these new guests (they usually won't be offered to you by the coupon company). List-building can be done in many ways - email, phone and address, becoming a fan on Facebook or even a checkin on Foursquare.
• You handle the small-print carefully eg 'one voucher per table'

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