The Crack Cocaine of Restaurant Marketing

 In 1. David Scott Peters, Marketing

The Crack Cocaine of Restaurant Marketing – How Coupons Can Destroy Your Restaurant & What To Do Instead

I want to give you an Audio CD of a teleseminar I did with Jim Laube of three weeks ago. But first let me tell you how that teleseminar came about…

I was flying to my last Elite Member meeting, from Phoenix, AZ to New Haven, CT. During that travel time I wrote an article for my SMART Systems Insider monthly newsletter. The article went in this months issue and it’s called “Defending Against the Cocaine of Restaurant Marketing.” The article came about as a result of talking with a large number of my workshop attendees who were talking about how they kept increasing thier sales and still CAN’T seem to make any money (and we are talking about some substancial, record increases! ).

I of course would ask some questions to find out what might be the root of their problem. You want to know what I found, to a person? COUPONS, COUPONS, COUPONS!!!!

So I did the math and discovered that my theory that if you’re not already at or above breakeven and you do a lot of coupon marketing…you can and will market yourself out of business.

The article I wrote (which you can find on my member site ) crunched the numbers and found that if your restaurant is losing money on $100,000 a month in sales, and that loss was only $5,000 because your prime cost was running at 70 percent, only 5 percent above the recommended level, a 20% increase in sales solely from a 25% discount coupon actually doesn’t help much at all!

Take a look:

  1. Increased sales by 20 percent for an additional $20,000 in sales
  2. For each new dollar that came in we deduct a minimum $0.70 to cover our prime cost.
  3. Take an additional $0.25 away for each new dollar because of the 25 percent off coupon.
  4. Your $5,000 loss is now only a $4,000 loss.
  5. So for every $20,000 in increased sales, you keep (or in this case decrease your losses by) $1,000.
  6. To turn your $5,000 loss into a breakeven scenario using a 25 percent off coupon promotion, you would have to increase your sales from $100,000 to $200,000 to just breakeven using this approach!

Change this to a BOGO offer and you’re creating a recipe for disaster. Add to that a whole bunch of additional factors I talk about in my article and it’s no wonder many restaurants fall into this marketing trap.

Right after my trip I found myself on the phone with Jim Laube. We were already talking about doing a teleseminar for his members when I told him about my article. He asked that I send it to him. After he read it, we both agreed that we need to do this teleseminar. And most of all we needed to give restaurant owners some alternative marketing solutions.

On a side note, please know that Jim and I both are not against coupons as long as you are already at or above your breakeven point (want an easy way to find your breakeven point? Then Click Here ) and don’t over use the practice. (Listen to the CD and you’ll learn exactly what I mean.)


I want to send you an Audio CD with this teleseminar on it for FREE –

AUDIO: The Crack Cocaine of Restaurant Marketing – How Coupons Can Destroy Your Restaurant & What To Do Instead


  • The blunt truth about making money in the restaurant business
  • The “theory” versus the “reality” of couponing
  • How to evaluate the financial, bottom-line implications of couponing in your restaurant
  • How to provide incentives without training your customers to wait for a coupon
  • What couponing or discounts generally make the most sense
  • Effective marketing alternatives to discounts and coupons

To get your FREE COPY of this CD, all you have to do is fill in the form below and I will get it in the mail right away! (no strings attached)

**Because of blog spammers, I’ve had to take the request link down. If you’re interested, just give me a call at 623-266-9611 and I’ll get a copy to you in the mail.

Remember to keep smiling,

David Scott Peters

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