The owner of the Yardhouse restaurant chain spoke at a high-end charity function on Sunday night.
He made a very special offer to the crowd at hand. He was offering 200 gift card opportunities for his restaurant. The cards were worth $25.00 each towards food at the Yardhouse. You had to commit to a year's worth (12 gift cards, total $300.00). You could buy them all in a batch or commit to one a month.
But here's the spin. All the money he received for the gift cards would be DONATED TO THE CHARITY (a wonderful children's fund).He was only offering them that night until 9:30. So we had to act fast.
Well, to me this was a no-brainer. I'm giving $25.00 a month to a really cool charity and getting $25.00 worth of good food. Plus it'll get my butt out of the house once a month.
From a marketing standpoint I thought "What? Is this guy stupid? He's selling gift cards but he's giving away all his profits from the transaction".
Then I started thinking about it. Here's what he really did:
1.) Let's face it, if you go to the Yardhouse you'll be spending a helluva lot more than 25 bucks. I have a wife and kids. I imagine my bill will be closer to the hundred dollar mark. Twelve separate times. Even with the gift card, that's $75.00 profit X 12 months. That's a brand new customer that's going to spend $900.00 a year at one of his restaurants.
2.) Less than 50% of gift certificates are actually redeemed. So even if you did go to the restaurant and only spend the $25.00, his exposure is minimal.
3.) Chances are I'm not gonna go every month. But it's likely that I'll give the card to a friend if I'm not using it. There's another new customer.
4.) If he sells all 200 opportunities, that's $6,000 he's giving to a charity. That's gotta make he and the charity feel pretty good. I'm sure he's using that as a promotional tool "Yardhouse donates $6000.00 to children's charity." Heck, might even make the news.
5.) How much money has come out of his pocket? Zero! Ok, maybe the price to print the cards. A small price to pay.
6.) Lastly, guess who's going to be telling everybody that the Yardhouse donated $6000 to their charity? Answer: The Charity. They will definitely be the restaurant's own personal viral cheering section.
So, let's review. They donated $6000.00 to a good charity. They've brought in a ton of new customers. They've made a huge profit for every card redeemed. If they played their cards right, they got great press for it. Their exposure was minimal. And it cost them nothing.
WOW!
Now, how can you use this info? The obvious answer is to create a gift card or gift certificate. But there are a few rules.
First, the gift card must be in an amount that is less than your services cost. 25% is a good start. For example, if you normally charge $400.00 for an event, make the gift card for $100.00. That way when someone does redeem it, they will have to pay you 75% of your normal fee. Hint: Write on the gift card "Can not be combined with other gift cards or other offers"
Secondly, you can certainly put them on your website individually, but the best way to sell them is in bulk at a discounted rate. For example, sell them to real estate agents. Offer ten $100.00 gift certificates at a discounted rate of only $50.00 each. They can then give them to their clients.
Lastly, the press comes with the charity. You can do this with or without giving the money to the charity of your choice. But that's where the free publicity comes in.
Final note: I've donated many of these types of gift certificates in silent auctions and such, always with the stipulation that the client put me in the program as a sponsor AND that the gift certificate is used to increase the value of an already existing gift or gift basket.
Nobody has ever redeemed one. I'm convinced that either I suck really bad, or, more likely, when someone buys the gift basket, my certificate isn't the thing that they had they're heart set on.
That's a tons of free advertising!
But don't limit yourself to that scenario. Be creative with your gifts. Remember, they are gifts.
-John
Rebel Entertainer and Gift Giver
www.RebelEntertainers.com
Posts
No comments:
Post a Comment