On the Art of Creating Promotions Without Going Bankrupt

Everyone who has ever run their own business has, in one way or another, thought about how to attract customers, maintain their loyalty, and keep them coming back to their product again and again.

In highly competitive niches like food delivery, it’s not enough to simply offer a good product—frankly, there are already plenty of “just good deliveries” out there. You need to entice the customer with a special approach, as well as with your special offers that seem more attractive than those of your competitors.

Let’s figure out how important promotions really are, which promotions you absolutely must have, and how to run a promotion so you don’t go broke and your guests stay satisfied.

I don’t need your promotions at all!

“I have a unique product; customers will come to me even without promotions.”

“My chef cooks better than the competition; all the clients are mine.”

“These promotions only attract freeloaders, but I need paying customers.”

Many delivery owners believe they don’t need promotions at all, that they are better, higher, stronger, and guests will understand this on their own. Spoiler: no, they won’t. 

They might not even find out you exist. A simple “We’re open” ad brings little result, unless you’re the only establishment of its kind in town. You need to attract your first guests with an appealing offer, so they not only notice you but also place their first order and can then truly appreciate you. And how else to attract those first guests if not with promotions?

The absence of promotions is not protection against freeloaders and consumer extremists. Believe me, they’ll find a way to get their meal for free: they’ll plant a fly in the dish, shake it up well before eating, or write to you later about how terribly sick they got. You can and should deal with such customers, but not by refusing to run promotions—don’t deprive your potential loyal guests of the pleasure of receiving a gift from you and becoming even more loyal.

Moreover, every promotion has its own purpose and function. Don’t launch a promotion just for the sake of it, or you won’t see any results. You need to clearly understand the goal of each promotion you run.

Any small business at the very beginning needs some kind of advertising or promotion—so, launch a promotion to attract your first customers. The first people have heard about you? Great, now you need to retain them. Launch a promotion for repeat sales and increased loyalty. Oh, revenue has dropped? Here, promotions to increase the average check can help. If everything is going well, it’s time to open a new location, and the process starts all over again.

Alright, you’ve convinced me, I’ll run promotions. But which ones?

Unfortunately, there’s no magic bullet here; you can’t just “launch something”—you’ll have to work and figure it out. But to make this path easier, here’s a step-by-step plan for developing offers for your customers wisely.

Step 1. Study your competitors

This is an important stage in developing your promotions. Make a list of your competitors. Analyze what offers they have. Make a list of discounts that all your competitors in the city offer.

Include both large federal chains and your local establishments: federal chains are not always aware of what’s happening in small regions and sometimes launch nationwide promotions without understanding the nuances.

Do you see promotions that repeat often in your table? Feel free to add them to your own. This way, you won’t fall behind the current delivery trends, since guests will be comparing you as well.

Most often, these are birthday promotions, discounts based on purchase amount, happy hours, free delivery from a certain purchase amount, bonus systems, and so on.

During your analysis, you may notice establishments offering very large discounts and generous gifts. Don’t take them as an example, but do keep an eye on them. Most likely, these businesses have only a few months left to operate.

Step 2. Choose the items you’re ready to put on promotion 

First, you need to understand the margin of all your dishes. Each one. This way, you’ll know which items to promote and which not to.

As a rule, a good indicator is a margin of 30% per item.

The higher, the better, of course. 70% is the total cost price. You might end up with 80% of the final product cost, but the lower the cost price, the better.

Items with a margin of 30% or more are your potential promotional items. If you can’t achieve this figure for at least half of your main items (not talking about add-ons—snacks, sauces, related products), it makes sense to review your pricing or expenses, or even reconsider your business model.

Feel free to add new items to promotions. Guests should try the novelty, so offer a small discount on the website and add a banner.

Are some products nearing their expiration date or do you just need to sell them quickly? Put them on promotion. This will increase demand and reduce write-offs.

Step 3. Decide which promotions to keep and add

But how do you know which promotions are really needed? Promotions are divided into several groups: for initial sales, repeat sales, increasing the average check, and boosting loyalty.

1. Promotions for initial sales

Give away dishes, bonuses, discounts. There are several ways to manage initial sales:

• Run a major promotion for one day and give it wide publicity. You’ll break even or make a small profit, but you’ll reach the maximum number of guests in a short time. If you really make something great, they’ll come back.
• Run a more modest promotion, but not for just one day—make it for the first 2–3 weeks after opening. Guests will come gradually during this time.
• Run a small, permanent promotion. Guests will keep coming, but without a sharp increase.

2. Stimulate repeat sales

• A discount or gift for the next order greatly increases the likelihood of a second purchase.
• Encourage guests to subscribe to your newsletter—give them something small, like bonus points, which will also motivate them to make a repeat purchase. Subscribed guests will regularly receive information from you and are more likely to order again.
• Happy hours boost sales during slow periods, usually from 11:00 to 16:00 on weekdays. Thanks to this promotion, orders increase during this time, as does the number of repeat orders.

3. Increase the average check

• Discounts based on purchase amount. Find out your average check and add 200–300 ₽—this will be the amount from which you give a discount or a gift. Don’t be greedy: if you set the threshold too high, the promotion won’t work.
• Free delivery from a certain purchase amount works the same way as a gift for a purchase amount. Almost every delivery service has this promotion, so be sure to include it. Also, remember that you have to pay the courier, so choose an amount that won’t make it painful to pay salaries. If your courier charges more than 300 ₽ per delivery, change your courier—they’re taking most of your profit.
• Birthday gift, if you set a minimum purchase amount. And don’t forget that birthday orders are usually for a large group. In this case, it’s more profitable to give a gift than a discount. Let’s do the math: you get a birthday order for 5,000 ₽. You give a 15% discount to the birthday person. From your 30% margin (1,500 ₽), you subtract 15% (750 ₽), and from 5,000 ₽ you’re left with 750 ₽. Suppose you give a pizza as a gift, which costs 700 ₽. For the guest, it’s 700 ₽, but for you, its cost is 70% (490 ₽). Thus, with a discount you earn 750 ₽, and with a gift—1,010 ₽, which is about 34% more. Unfortunately, this scheme doesn’t work with small purchase amounts; you need to calculate each promotion and be sure you’re not losing money.

4. Boost loyalty

• Self-pickup promotion: I recommend everyone to launch it. The beauty is that you lose nothing and only gain. Suppose you get an order for 1,000 ₽. You send it for delivery and pay the courier 200 ₽ per delivery (you have to pay them anyway). You’ve already given 20% of your margin to the courier. Now suppose you give a 15% discount for self-pickup. The customer orders for 1,000 ₽ and gets a 15% discount. You would have given away part of your margin anyway, but in the first case you just paid the courier, and in the second—you gained a loyal customer.
• Bonus system (also works for repeat orders)

Usually, it works as follows: a guest, placing orders on your website, receives 5–10% cashback in bonuses and can use these bonuses on their next order, but only to pay for 20–30% of the purchase. With an average check of 1,500 ₽, you can get 75–150 bonuses per order, where 1 bonus = 1 ruble. The maximum 30% discount can be accumulated in at least 3 purchases. So, by accumulating bonuses, guests still can’t make every purchase at maximum benefit for themselves. Set such redemption limits so that even at maximum redemption you don’t end up in the red—about a 20–25% discount on the entire order.

• Gifts for reviews

Let guests leave reviews on platforms where you lack feedback. This will increase the loyalty of other guests and please those who leave reviews.

All the options described above are the basics, the foundation of your promotion pool. But you don’t have to limit yourself to them. There can be many types of promotions with different interesting mechanics, lotteries, collaborations, etc.

Step 4. Check everything

• Make sure your promotions don’t contradict each other, and are simple and easy to use. They shouldn’t have complicated mechanics—the more conditions, the less likely guests are to use them and the less effect you’ll get.
• Don’t run a promotion just for the sake of it—only make justified decisions.
• Use promo codes. This way, you’ll more easily understand which promotions were successful and which were not.
• Be generous. The gift should be equivalent to the conditions; don’t ask for a lot and give little. This way, you won’t push guests away and may even gain new loyal customers.
• Never give something away for nothing: there must always be a minimum order to receive the offer.
• A discount should come from the heart, because every discount is a gift to your customer. If you’re not ready for this, should you be giving it at all? 
• Don’t run raffles for sales—they serve a different purpose.
• Always calculate each promotion. You should never operate at a loss!
• Check that the promotion is technically set up correctly and works properly on your website and in your app.

I launched a promotion, but no one saw it!

Of course, if you just launch a promotion and don’t tell anyone about it, you won’t achieve good results. Publish information about it everywhere: as a banner or notification on your website, on social media, in newsletters, in offline advertising, in ads on social networks and search engines, launch push notifications and SMS—in short, use every possible channel to reach your guests.

Launching information across all channels is only part of the success. The other part is the creatives you use for notifications, as well as the appeal of the promotion itself. You won’t know right away what the issue is: the promotion itself or the wording and image. Launch several creative options for different audiences (A/B testing), scale up the most successful ones, and send the less successful ones to the trash.

By the way, there is a magic bullet for launching promotions if you delegate this task to FoodSoul. We’ll select promotions tailored to your business and set up advertising on all popular platforms so that as many people and potential guests as possible learn about your offer.

In conclusion

Promotions don’t have to be on your website all the time or in large numbers, but there should be a balance—if you remove them all, some guests will go to competitors. Add and remove promotions, analyze the results, scale up what works well. The main thing is to do everything under control and with a clear understanding of why you’re launching or removing a particular promotion.

Don’t forget to track your month-to-month and year-to-year dynamics. Keep an eye on competitors and trends, stay relevant in the information field, and be on the same wavelength as your target audience: collect feedback from guests, adapt, and stay flexible. Good luck!

Best regards,

Elvira, FoodSoul Marketing Specialist