How to Increase Brand Awareness for a Restaurant: 10 Tips
Ever wondered why restaurants like KFC or Chick-fil-A always seem top of mind even if you've never tried their food? It’s because of their strong...
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Attract More Dream Customers and Keep Them Longer
7 min read
Sep 17, 2024
Getting new customers through the door and motivating previous ones to return (and ideally increase their order size) is the cornerstone of any restaurant business. Two tools that can help you achieve that are gift cards and complimentary gift cards, or comp cards. Although similar, they have different uses different ways they are managed.
This article covers the key differences between gift and comp cards, their best uses, and how to maximize their benefits and minimize the potential downsides.
It’s easy to think gift and comp cards are the same; however, gift and comp cards differ:
Here's a table summarizing the key differences:
Feature |
Gift Cards |
Comp Cards |
Purpose |
Drive sales, attract new customers, build loyalty |
Reward guests, incentivize employees, address service issues |
Cost to Customer |
Paid for by the customer |
Free for the recipient; paid for by the restaurant |
Accounting Treatment |
Recognized as revenue upon purchase |
Recognized as an expense upon use
|
Gift cards give restaurants multiple ways to increase revenue and guest engagement. The key ways they can be used are as follows:
1. Growing Loyalty Through Rewards
Gift cards increase the likelihood of your restaurant creating loyal customers by providing a tangible reason for repeat visits. Many businesses tie gift card rewards and point redemption into their loyalty programs, where customers get a free meal or meaningful discount after making enough purchases. This strategy fosters recurring customer activity and repeat sales.
2. Attracting New Customers and Keeping Them Longer
When someone gives a gift card, they often simultaneously introduce new customers to your restaurant. This is because the gift card recipient often accompanies friends or family to a new place, increasing the number of diners.
In addition, gift card customers usually spend more than the actual value of the gift card, increasing overall revenue in the restaurant. This is an excellent way to improve your clientele and achieve higher spending per head any time they visit.
3. Special Promotions and Holiday Sales
Gift cards are popular during the holiday season. As per our Restaurant Gift Card Sales Report, gift card sales surpassed $326 million in 2022, almost reaching pre-pandemic levels. Your restaurant can create unique gift card promotions that include elements like a free bonus card with the purchase of a gift card to help drive sales during peak periods. This will increase revenue during critical times of the year when people purchase gifts and plan large gatherings.
While gift cards focus on revenue and profitable growth, comp cards have different purposes and benefits for restaurants:
1. Employee Incentives and Internal Rewards
One of the most effective uses of comp cards is for employee incentives. Comp cards can be used as a reward for doing well, meeting or beating sales, or giving an excellent customer experience. Another significant use of comp cards is to make up for unavoidable customer service mishaps, like serving the wrong order, missing an ingredient, or otherwise accidentally providing the wrong experience.
2. Customer Service Recovery
Comp cards are invaluable for rectifying unavoidable service mishaps, such as serving the wrong order, missing an ingredient, or providing an incorrect experience. They help maintain customer satisfaction and loyalty.
While comp cards offer advantages, they come with three challenges to address:
Mismanaged gift cards can also lead to problems:
Here are six key details to make your gift and comp card efforts more successful when integrating them into your overall business strategy:
1. Digital Gift Cards: Mobile-First ApproachThese six core considerations allow you to proceed with gift and comp cards in the right way to boost customer satisfaction, accelerate sales, and foster brand loyalty. Ensuring mobile-first digital gift cards positions you to meet modern, tech-savvy consumer needs and provide them with a seamless experience within your program.
Here are some practical tips to help you get through the complexities of comp cards and avoid the gift cards common pitfalls:
1. Educate Staff:
5. Consider a Gift Card Management Solution:
Invest in specialized gift card management software for ease of operations, tracking of inventory, and avoidance of any kind of financial fraud.
Avoid these pitfalls, and your comp and gift card programs will run smoothly with minimal risk and maximum profitability.
Knowing the differences between comp cards and gift cards equips you to be successful with them. By implementing good policies, soundtracking systems, and proper accounting, you can realize the benefits and minimize the risks of both. Comp cards are frequently used as promotions and incentives for staff; their usage must be monitored for appropriate distribution and disposition.
On the other hand, gift cards are an excellent way of ensuring customer retention and building revenue; hence, they need to be closely monitored to keep track of the balance on each card to avoid fraud. You can realize the full benefit of comp and gift cards in your restaurant by creating a complete set of rules and regulations concerning their use and utilizing the available technology to track and redeem them.
Are you ready to unleash the power of comps and gift cards in your restaurant? Then, read our marketer’s guide to gift card strategy, and you'll find that they bring energy into your operations, driving your success.
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