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FOOD & RESTAURANTS 3:25 p.m. Tuesday, October 20, 2009
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Restaurants serve up food giveaways
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Hopes high that free food converts more into paying customers
By Dori Kleber
ShareThis
For the AJC
JoAnn Ramsey had never eaten pizza from a Stevi B’s restaurant. But one
recent evening, she stood in line for half an hour to get her first taste. Why?
Simple. It was free.
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Ramsey heard about the giveaway on her favorite radio
station. She was so unfamiliar with the Stevi B’s chain she
didn’t even know where to find one.
“I had to look it up in the phone book,” she said.
That made Ramsey exactly the kind of person Stevi B’s
hoped the promotion would bring in.
Rene Macura, Denny's
Hundreds of people waited in line
beginning at 6:00 a.m. at a Denny's in
North Hollywood, Calif. on Tueday,
Feb. 3, 2009, for a Free Grand Slam
breakfast.
Enlarge photo
“There are still a lot of folks out there that aren’t familiar with
Stevi B’s, so the goal is to get people to try the product,
because we believe that our product is better than a lot of
other products out there,” said Karl Jaeger, managing
director with Argonne Capital Group, which owns the pizza
buffet chain.
The Stevi B’s promotion is just one example of a trend
among fast-food and casual restaurants, which are
increasingly willing to give away the goods to get people
through their doors.
Dori Kleber, For the AJC
JoAnn Ramsey of Duluth fills a box
with pizza at a Stevi B's giveaway
aimed at new customers. "I definitely
take advantage of free stuff in these
times," she said.
Today on accessAtlanta
Ken Bernhardt, professor of marketing at Georgia State
University, attributed the rise of the freebie to today’s tough
economy. When money is tight, people shy away from risks,
including the risk of buying something they’ve never tried. A
giveaway overcomes that fear.
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If a restaurant believes it offers a superior product or a better
value than competitors, a free promotion can get people to
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“ ‘Free’ is the most powerful word in the English language as
far as marketing is concerned,” Bernhardt said. “It does
generate action and overcomes inertia.”
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Bernhardt said this was the rationale behind McDonald’s
coffee giveaways this summer. A consumer magazine rated McDonald’s coffee better than the
brew at Starbucks, so if a giveaway could get coffee drinkers past their resistance to try
McDonald’s, it was reasonable to think the burger chain could win enough new customers to
easily pay for the product it gave away.
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Businesses are willing to absorb short-term costs — and put up with a few freeloaders — to
make long-term gains with new and current customers.
Denny’s spent $5 million on food and advertising when it gave away two million of its Grand Slam
breakfasts the day after the Super Bowl, according to a company statement. But the expense
paid off by getting people reacquainted with Denny’s restaurants, and the company said
customers responded with an outpouring of gratitude and good will.
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Some giveaways pay for themselves by increasing customer traffic and sales. That’s what
happened at Chick-fil-A on Labor Day, when the chain offered a free chicken sandwich to
anyone who showed up wearing clothing with a sports logo.
Nationwide, the company gave away about 2 million sandwiches, according to corporate
spokesperson Mark Baldwin. For the second year in a row, the promotion turned what is normally
a slow sales day into a busy one. Customers bought so many milkshakes and waffle fries that the
bottom line showed a profit.
Baldwin pointed out that while the company made money on its giveaway day, the primary goal
was not to boost single-day sales but to win repeat business, especially from people who may
have been wooed away from Chick-fil-A by other fast-food restaurants offering a similar product,
often at a lower price.
“We’re never going to play that dollar menu discount game,” Baldwin said. “We’d rather give it
away,” confident that consumers who come in for a taste will be won over.
Bernhardt supported Chick-fil-A’s refusal to discount its prices.
“As soon as you price your product at 99 cents, it’s very difficult to get [customers] to pay $1.79
later because you’re establishing what the product is worth with your price,” he said. “Discounting
the product damages the brand.” In contrast, when you give away the product, you don’t change
the customer’s perception of its value. “Nobody would expect it to be free next time,” he said.
Another strength of freebies is the way they promote themselves.
Young people spread the word via online social networks and blogs, and media outlets share the
news with bargain-hungry audiences.
All of the buzz can become too much of a good thing, as it was when Oprah Winfrey invited
millions of viewers to get a free sample of Kentucky Fried Chicken’s new grilled chicken in May.
So many would-be customers swarmed KFC locations that the chain couldn’t feed them all,
forcing the company to issue rain checks and an apology.
KFC’s blunder is the worst-case outcome for a giveaway, Bernhardt said. “You do a promotion to
try and get good will, and all you do is walk away with egg on your face and a lot of ill will,” he
noted.
Matthew Loney, president of Stevi B’s, said his restaurants had a complaint or two from people
who showed up after the giveaway was over, but overall he considered the promotion a great
success. The restaurants gave away hundreds of pizzas, and he was sure he earned some new
customers. The promotion generated so much excitement, Loney said Stevi B’s probably will do it
again next year.
Don’t expect too many repeats, though. As the economy improves, Bernhardt predicted
consumers will see fewer freebies. “There may still be some related particularly to new products,”
he said, “but if business is good, they would rather not give away their food.”
Fast-food freebies
Boston Market. Two kid’s meals free with adult purchase. Through Oct. 31.
www.bostonmarket.com .
Great American Cookies. Free chocolate chip cookie with sign-up to e-mail club. Through Oct.
31. www.greatamericancookies.com .
Buca di Beppo. Free serving of spaghetti with purchase of pasta or entree. Oct. 26. 2335
Mansell Road, Alpharetta. 770-643-9463, www.bucadibeppo.com .
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