Dangers in Discounting

Pictures by Will Ennis of Summerland, BC

Marketing your restaurant is challenging during the best of times, during slow economic downturns it can become a nightmare.  Many restaurants are cash flow slow, have mounting bills, lower customer counts, sky rocketing cost, they begin to question the long term goals and scrap the plans that they have formulated to provide growth.  How are they to market their restaurant during stressful times without adding to it?

Newspapers and radio advertising often prove ineffectual, television is not within the budget of an average restaurant, so how about a coupon program? Wagjag, Goupon, Direct Mail or Entertainment Books, programs that seemingly look to be an effective way to get your message out and customers in the door, but at what cost? Are two for one promotions really going to achieve the desired result you are seeking?

While coupons "may" have a place in retail they are not a good product for the restaurant or the hospitality industry, so let's take a look at why. Some believe that the coupons are a quick, effective way to market the establishment, however, they also can quickly become the entire marketing plan, thus limiting the type of clients patronizing your restaurant to those who will only shop with a coupon. No matter how great your product may be, once you discount it you are telling the customer it really wasn't worth the original menu price after all. The non coupon customers will begin to feel that they have been taken, or, at least taken advantage of, many will not return, creating yet a slower establishment and less cash flow within the restaurant.

All coupons of course have guidelines or rules that the customer is to comply with, yet seldom do, present the coupon upon arrival, they wait until the bill is presented, only one per table, yet a table of four insists on using two, not to be combined with other offers, they want to present two coupons from different media, no cash value yet they insist the coupon should give them change. The management of the use of coupons alone can be time consuming adding to the labor costs, staff frustrations, and the degrading of the established reputations. 

Let us look at the cost of a typical promotion. "Get an $80.00 dinner for just $40.00." First we must pay to coupon company for the promotion, costs range between $10.00 and $15.00 dollars let’s go in the middle, using the $12.50, that leaves us with $27.50 from the $40.00. Now we must factor the food cost on the $80.00 dollars, which is $24.00 using a 30% ratio (which few restaurants actually maintain) we are now left with $3.50 to pay for the labor of servers, busing people, dishwashers, cooks and the chef, a labor cost of 27% would equal $21.60, our promotion now has a negative result of -$18.10. Now many of these coupons have an average of 300 customer usage, our loss on the promotion is-$5430.00, are you prepared for such a loss? What if the sale of the coupons is higher, the loss therefore is higher.

True the cunning marketer will attempt to sell this as advertising for the business. Yet advertising costs should never exceed 4% of revenue, which would be $960.00 of the $80.00 x 300 customers, except your revenue (before expenses) was only $27.50 thus the ad revenue should be 330.00, a far cry from the $5400.00 losses. Remember, too, that, we still haven't accounted for rent or mortgage, fuel, power, water and all other fixed costs generally represented as an additional 17% of revenue, or another $4080 on this promotion, bringing the promotional loss to -$9510. How is that going to help your cash flow?

In addition to the discounting customer, we must of course consider the full paying customer,  are we willing to forgo the customer who will pay the $80.00 for those who will only pay the $40.00, are we even going to have the seats to accommodate the full paying customer? If not, does our loss now continue to climb? This loss is yet greater, as the disappointed "full paying" customer are put off with the degradation of service and may not return? You must keep in mind that discounting (couponing) customers also will not return until the next coupon is offered. Each week they pick up and use whatever discount is offered, seldom if ever, become good steady "full price" paying customers. Coupon books like "Entertainment" offer hundreds of "two for one" restaurant discounts, so the mission of the book is to have the consumer use as many as possible before they expire, practically a guarantee in not building a new customer base. Groupon markets daily and new restaurant in your area, the discounting customer will choose to purchase todays featured establishment it means not paying the full menu price.

Our course this action also risks offending a regular customer, who may question why a strange new customer is offered a better deal than he or she, who have been a faithful partner with the restaurant.  Some full price paying regulars actually will believe they have been "had,"  why are you acquiring large sums of their money at regular menu price, while you court a relationship with those being “gifted” with a large discount, their lack of understanding your situation is not what is important to them, just the fact they are required to pay more than the diner at the next table is generally enough to drive them off. Regardless of their feelings or how you try to explain your action they become offended and never return. Would it not be better to give the regular a discount from time to time and insure their faithful partnership?

Staffing for the coupon is also a challenge, staff simply do not want them, why? As  the discount customer is a frugal person (and I am being kind) they carry that attitude on with the server, generally demanding a high level of service, yet tipping at less than what the normal rate would and should be. For example, a tip on an $80.00 dinner at 15% would be $12.00, so 300 x 80 x15% = $3600 to split as the restaurant policy dictates. If 10 people split, then each receives 360. However, the discounting customer only pays 40.00 for the $80.00 meal (statics show they tip less than 10% of the bill) which rarely meets the coupon rules. So the tip is now 4.00 the servers loss is outstanding 66% of what should have been, carried over 40.00 x 300 x 10% = $1200 divided by our 10 employees it becomes $120. Are we going to retain the server who makes $360 normally but has to give it up for $120? No. So new staff are required, we then incur a new expense in training.

There will be plenty of arguments as to why coupons  are good for your business, I say let the numbers do the talking, can you afford it? Is the risk to regulars worth it? Is the staffing cost worth it? Then proceed as you may, we great caution.

Look for other ways to market your restaurant without the discount: Be involved, keep local, get to know what is happening in the community and be part of it and let the community know you are there for them. Local cooking competition, chili cook offs,  cooking classes, dining events, place chef writings in the local paper instead of ad's (people read articles and ignore ad's), partner with local charities and churches, create a VIP Club.

Giveaway 2 OZ bottles of a special sauce or mustard (a new one once a month, they must come in to get it) 250 bottles gets 500 people per month.  If no special events are taking place, create one.

Make use of media, email, Facebook, Twitter, Google, create a YouTube channel. Be sure to track sites like Yelp, Urbanspoon and Trip Advisor comment on the negative and praise the positive comments.

Have a special evening menu "with a special menu for that night" while the regular menu at regular price is also available. Some establishments create a dining menu that is costed correctly and that is what is offered at the “discounted price” while all other menu items are sold at listed price.

Finally, practice the 3 G's of the restaurant business: Great Food, Great Service and a Great Experience at a fair price.

National Ice Cream Day

President Regan The Great Communicator loved ice cream. During the summer of 1984, he created National Ice Cream Month and designated the third Sunday of July as National Ice Cream Day.

So here are the top 15 flavors with recipes;

THE 15 MOST POPULAR ICE CREAM FLAVORS

(Flavor, percent of people preferring, recipe)

1. Vanilla, 29%

2 cups half-and-half

1 cup whipping cream

1 cup minus 2 tablespoons sugar

2 tablespoons peach preserves (not jelly)

1 vanilla bean, split and scraped

Directions

Combine all ingredients (including the bean and its pulp) in a large saucepan and place over medium heat. Attach a frying or candy thermometer to inside of pan. Stirring occasionally, bring the mixture to 170 degrees F. Remove from heat and allow to cool slightly. Remove the hull of the vanilla bean, pour mixture into lidded container and refrigerate mixture overnight to mellow flavors and texture.

Freeze mixture in ice cream freezer according to unit's instructions. The mixture will not freeze hard in the machine. Once the volume has increased by 1/2 to 3/4 times, and reached a soft serve consistency, spoon the mixture back into a lidded container and harden in the freezer at least 1 hour before serving.

2. Chocolate, 8.9%

¼ cup milk chocolate, melted

¼ cup dark chocolate (at least 72% cacao), melted

2 cups heavy cream

1 cup whole milk

4 ounces cream cheese, softened

1½ cups granulated sugar

3 tablespoons unsweetened cocoa powder

1 teaspoon vanilla

2 tablespoons chopped dark or milk chocolate, optional

Instructions

Place dark chocolate and milk chocolate into a microwave safe bowl. Melt at 20 second intervals at 80% power in the microwave until able to stir the chocolate until smooth. Be careful not to overheat. Set aside and allow to cool.

Combine whipping cream, milk, and cream cheese, mixing until smooth. Mix in sugar, cocoa powder, melted chocolate from earlier, and vanilla. If using optional chocolate pieces, stir them in as well.

Pour into an ice cream maker container and make according to ice cream maker directions.

Once ice cream has churned, remove from the ice cream maker container and serve immediately as soft serve or place in an airtight container in the freezer for 1 hour to overnight for a firmer ice cream.

3. Butter pecan, 5.3%

    2 cups whole milk

    2 cups half-and-half cream

    1 cup sugar

    1/2 cup packed light brown sugar

    1/4 teaspoon salt

    2 eggs, lightly beaten

    1-1/2 teaspoons vanilla extract

    1 cup finely chopped pecans

    2 tablespoons butter

Directions

    In a large heavy saucepan, heat the milk, cream, sugars and salt until bubbles form around sides of pan. Whisk a small amount of hot mixture into the eggs. Return all to the pan, whisking constantly.

    Cook and stir over low heat until mixture is thickened and coats the back of a spoon. Quickly transfer to a bowl; place in ice water and stir for 2 minutes. Stir vanilla. Press waxed paper onto surface of custard. Refrigerate for several hours or overnight.

    In a small skillet, saute pecans in butter, stirring constantly. Cool.

    Fill cylinder of ice cream freezer two-thirds full; freeze according to the manufacturer’s directions. Stir in toasted pecans. Refrigerate remaining mixture until ready to freeze. When ice cream is frozen, transfer to a freezer container; freeze for 2-4 hours before serving. Yield: 2 quarts.

4. Strawberry, 5.3%

1 pint fresh strawberries, hulled and chopped
1 tablespoon fresh lemon juice
2 large eggs
1 cup sugar, divided
2 cups heavy whipping cream
1 cup milk
1 teaspoon vanilla extract

Directions:

Combine strawberries, lemon juice, and 1/4 cup sugar in a mixing bowl, set aside in fridge for 1 hour.

In large mixing bowl beat eggs until light and fluffy, about 2 minutes.

Gradually add 3/4 cups sugar, mixing well. Stir in milk and vanilla and mix well.

Add strawberries with juice and mix well.

Gently stir in whipping cream just until combined.

Pour into ice cream maker and follow manufacturer's instructions.

5. Neapolitan, 4.2%

Line a small loaf pan with plastic wrap. Carefully layer the vanilla, chocolate and strawberry ice creams, freeze at least 4 hours. Remove from pan, slice and serve.

6. Chocolate chip, 3.9%

Ingredients:

1/2 pint milk

1/2 pint heavy cream

3oz sugar

5oz chocolate chips

Method:

Place the milk and sugar into a saucepan and heat gently, dissolving the sugar. Place the milk to one side to cool and when cold, stir in the cream.

Transfer the complete mixture into an ice cream maker and freeze following the manufacturer's instructions BUT remember to add the chocolate chips as the ice cream begins to thicken.

7. French vanilla, 3.8%

8 large egg yolks

3/4 cup sugar

2 1/2 cups heavy cream

1 1/2 cups cold milk

Pinch of fine salt

1 vanilla bean

Directions

In a medium bowl, lightly whisk together the yolks and half of the sugar.

In a non-reactive saucepan combine the cream, 1 cup of the milk, the remaining sugar, and the salt.

Split the vanilla bean in half, lengthwise, to expose the tar-like seeds inside the pod. Scrape the seeds loose with a knife; add the bean and the seeds to the cream mixture.

Heat the cream over medium-high heat until just at a boil. Remove from the heat. Gradually pour the hot liquid into the yolks, while whisking constantly. Return the cream-egg mixture to the saucepan. Cook over medium-low heat, stirring the mixture constantly, with a wooden spoon in a figure-8 motion, until thickened, about 10 minutes. When the ice cream mixture is properly cooked it should coat the back of a spoon, be satiny thick, and be free of any bubbles on the surface. (If you taste the ice cream base it should have a slight egg-y taste.) When thickened, pour in the reserved milk to prevent the mixture from overcooking. Strain into a medium bowl.

Fill another bowl with ice. Set the bowl of ice cream base in the ice and stir until thoroughly chilled. Freeze the base in an ice cream machine according to the manufacturer's instructions. (Take care not to over churn the ice cream or it will get a grainy texture.) Transfer the ice cream to the freezer to set up for at least 1 hour. Serve.

8. Cookies and cream, 3.6%

2 cups heavy cream

1 cup whole milk

2/3 cup sugar

1 teaspoon vanilla extract

20 chocolate sandwich cookies

Directions:

Combine cream, milk, sugar and vanilla in a saucepan and heat until the sugar is completely dissolved.

Pour into a bowl and cover with plastic wrap. Chill in the refrigerator or in an ice bath until completely cool.

Place the chocolate sandwich cookies in a gallon size plastic bag. Using a rolling pin or a rubber mallet (my weapon of choice), break up the cookies being sure to leave some larger pieces. Store the cookies in the freezer.

Freeze in an ice cream maker according to the manufacturer’s instructions. When the ice cream is nearly finished freezing, pour the frozen cookie pieces into the machine, and allow to mix thoroughly. (You will still have to stir it up a bit after the machine is done.)

Store in an airtight container and freeze for an additional 2 hours

9. Vanilla fudge ripple, 2.6%

3 cups heavy whipping cream

1 can of sweetened condensed milk

1 cup of semi-sweet chocolate chips

2 Tbs. Heavy cream

2 Tb. Vanilla extract

Whip the cream until it has slightly thickened.

While still beating the cream, slowly pour the condensed milk in a thin stream into the cream.

Increase the mixer's speed while whipping to high and add the vanilla extract.

Whip the mixture until it is light and fluffy.

Scoop this mixture out into a large container and place in freezer for one hour.

Pour the chocolate chips and 2 TB of heavy cream into a glass measuring cup or bowl.

Microwave on high for one minute and stir until the chocolate and cream are well-combined.

Cool to room temperature.

Pour this mixture once cooled directly onto the top of the ice cream and swirl the chocolate into it and refreeze for at least six hours.

Remove from freezer and serve!

10. Praline pecan, 1.7%

4 cups half-and-half

1/2 vanilla bean pod, cut and scraped

Pinch salt

1 cup sugar

8 whole egg yolks

Directions

1 cup chopped Pralines, recipe follows

1/3 cup Caramel Sauce, recipe follows

Combine the half-and-half, vanilla bean seeds and salt, in a non-reactive saucepan over medium heat. Bring the half-and-half to a boil to scald it, and remove the saucepan from the heat.

Beat the sugar and egg yolks in a bowl. Add the half-and-half mixture, about 1/4 cup at a time, to the beaten eggs and sugar, whisking in between each addition, until all is used. Pour the mixture back into the saucepan reduce the heat to medium-low, and cook, stirring, over medium heat, for 5 to 6 minutes, or until the mixture becomes thick enough to coat the back of a spoon. Remove from the heat, strain through a fine mesh sieve and cool completely.

Pour the filling into the ice cream machine and follow the manufacturer's instructions for churning time. As the ice cream freezes and starts to solidify, sprinkle the pralines into the ice cream maker followed by caramel sauce. Remove the ice cream from the machine and place in a freezer-safe container and freeze until firm, about 8 hours.

Creamy Pecan Pralines:

1 cup light brown sugar

1/2 cup granulated sugar

1/2 cup heavy cream

4 tablespoons unsalted butter

2 tablespoons water

1 cup pecan halves

In a heavy-bottomed saucepan, combine the light brown sugar, granulated sugar, heavy cream, butter, and water. Place over a medium-high heat and stir constantly until the pralines reach the soft ball stage, 238 to 240 degrees F. Add the pecans to the candy, and pull the pan off of the stove. Continue to stir the candy vigorously with a wooden spoon until the candy cools, and the pecans remain suspended in the candy, about 2 minutes. Spoon the pralines out onto a parchment or aluminum foil lined sheet pan and cool completely before serving.

Yield: about 10 pralines

Caramel Sauce:

3/4 cup sugar

2 tablespoons water

1/2 teaspoon fresh lemon juice

1/2 cup heavy cream

2 tablespoons to 1/4 cup whole milk

Combine the sugar, water, and lemon juice in a medium heavy saucepan and cook over medium-high heat, stirring, until the sugar dissolves. Let boil without stirring until the mixture becomes a deep amber color, 2 to 3 minutes, watching closely so it doesn't burn. Add the cream (be careful; it will bubble up), whisk to combine, and remove from the heat.

Add 2 tablespoons of the milk, and then add up to 2 more tablespoons, until the desired consistency is reached. Let cool until just warm before serving. (The sauce will thicken as it cools.)

Yield: a generous 3/4 cup

11. Cherry, 1.6%

6 eggs

1-1/2 cups sugar

1-1/2 cups milk

3 cups Bing cherries pitted

1 quart heavy whipping cream

1 can (14 ounces) sweetened condensed milk

1 tablespoon vanilla extract

1 teaspoon almond extract

Directions

In a bowl, beat the eggs and sugar until thick and lemon-colored. Scald milk; slowly pour into egg mixture, stirring constantly, until sugar is dissolved. Cool.

Chop the cherries by hand or in a food processor. Combine cherries with egg mixture and all remaining ingredients. Freeze in an ice cream maker. Yield: about 1 gallon.

12. Chocolate Almond, 1.6%

2 envelopes unflavored gelatin

6 tablespoons cold water

3 cups milk

3 cups sugar

1/4 teaspoon salt

3 eggs, lightly beaten

6 to 7 ounces unsweetened chocolate, melted

4 cups heavy whipping cream

2 teaspoons vanilla extract

1 cup sliced or slivered almonds, toasted

Directions

In a small bowl, sprinkle gelatin over cold water; let stand for at least 2 minutes. In a large heavy saucepan, heat the milk, sugar and salt until bubbles form around sides of pan. Whisk a small amount of     hot mixture into the eggs. Return all to the pan, whisking constantly.

Cook and stir over low heat until mixture is thickened and coats the back of a spoon. Remove from the heat. Stir in gelatin mixture until dissolved; stir in chocolate until blended. Cool quickly by placing pan in a bowl of ice water; stir for 2 minutes. Stir in cream and vanilla. Press plastic wrap onto surface of custard. Refrigerate for several hours or overnight.

Fill cylinder of ice cream freezer two-thirds full; freeze according to manufacturer's directions. Refrigerate remaining mixture until ready to freeze. When ice cream is frozen, stir in almonds. Transfer to a freezer container; freeze for 2-4 hours before serving. Yield:2-1/2 quarts.

13. Coffee, 1.6%

2  cup(s) whole milk

2  cup(s) heavy cream

1  cup(s) sugar

1/2  cup(s) brewed espresso

1  tablespoon(s) pure vanilla extract

8  large egg yolks

Directions

Prepare an ice-water bath. Combine milk, cream, 1/2 cup sugar, the espresso, and vanilla in a saucepan. Bring to a simmer over medium heat.

Meanwhile, whisk together egg yolks and remaining 1/2 cup sugar in a bowl.

Gradually whisk half the hot milk mixture into the egg-yolk mixture. Pour egg-yolk mixture into saucepan, and whisk. Cook over medium heat, stirring constantly, until thick enough to coat the back of a spoon.

Pour through a fine sieve into a heatproof bowl set in ice-water bath. Let cool, stirring occasionally. Place plastic wrap on surface of custard to prevent a skin from forming, and refrigerate 2 hours.

Freeze in an ice cream maker according to manufacturer's instructions. Transfer to an airtight container, and freeze for at least 1 hour before serving.

14. Rocky Road, 1.5%

1 (14 ounce) can sweetened condensed milk

1/2 cup unsweetened cocoa powder

2 cups heavy cream

1 cup light cream

1 tablespoon vanilla extract

1/2 cup chopped pecans

1 cup miniature marshmallows

Directions:

In a medium saucepan over low heat, cook and stir condensed milk and cocoa until smooth and slightly thickened, 5 minutes. Remove from heat , and allow to cool slightly. Stir in heavy cream, light cream, and vanilla. Refrigerate until cold.

Pour mixture into the canister of an ice cream maker, and freeze according to manufacturer's directions. Stir in nuts and marshmallows halfway through the freezing process.

15. Chocolate marshmallow, 1.3%

2 cups sugar

4 teaspoons cornstarch

1/4 teaspoon salt

4 cups milk

4 ounces unsweetened chocolate, melted

4 large eggs, beaten

4 cups light cream

1 cup marshmallows crème

Preparation:

In a 3 quart saucepan, combine sugar, cornstarch and salt; gradually add milk.  Cook over medium heat, stirring constantly, until thickened -about 2 minutes.  Remove from heat and stir in the melted chocolate.  Blend a small amount of the hot mixture into beaten eggs; return all to pan.  Cook 1 minute on medium heat; do not boil.  Remove from heat and cool.  Add cream; chill thoroughly.  Churn freeze until the mixture thickens; fold in marshmallow crème at the last moment before freezing.

Yield:  3 quarts. 

Bonus Dianna's Maple Walnut Ice Cream

1 cup maple syrup

2 cups heavy cream

1 cup whole milk

1/4 teaspoon salt

2 large eggs

1/3 cup walnuts, toasted and chopped

Boil syrup in a 2-quart heavy saucepan over moderately high heat until reduced to 3/4 cup, 5 to 10 minutes. Stir in cream, milk, and salt and bring to a boil over moderate heat.

Whisk eggs in a large bowl, then add hot cream in a slow stream, whisking. Transfer to saucepan and cook over moderately low heat, stirring constantly, until slightly thickened and an instant-read thermometer registers 170°F, 1 to 2 minutes (do not let boil).

Pour custard through a fine sieve into a clean metal bowl, then cool, stirring occasionally. Chill, covered, until cold, at least 3 hours.

Freeze custard in ice-cream maker until soft-frozen, then, with motor running, add nuts. Continue to churn the ice cream until frozen, then transfer to an airtight container and put in freezer to harden.