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Food coupons: A secret ingredient to boost your profit margins

One of the restaurateur asked me if attracting customers via coupons is worth the money. My answer was simple — “What if you didn’t, and they don’t”.


Coupons are not just used to attract the coupon hunters to your restaurant but it’s an essential way to draw in new customers to your restaurant. Studies suggest that 90% of customers have looked for a restaurant deal at least once and 85% of consumers look for coupons prior to visiting a retailer(source). In this blog, we will explain to you everything about the food coupons: a secret ingredient to increase your profit margins significantly.

Benefits of Coupons

Food coupons have the power to expand your reach significantly in the market. Studies have shown that, people tend to travel to distant places if they have a coupon / voucher to be redeemed. Hence your audience spread increases greatly.

  1. Customers who love dining outside will break their routine to visit a specific place in order to take advantage of a good coupon offer. Coupons entice the customers to visit your restaurant.
  2. Coupons can be advertised strategically. Coupons are a great way to make your customers try new food items on the menu or promote not-so-moving items.
  3. There are many active customers who would actually search on food coupons online before deciding to place the order from any restaurant. Thus, appealing coupons have the power to attract such customers to your restaurant. 

Today, almost every restaurant has a marketing budget and coupons can be a part of their long term marketing strategies. The investment cost to be put into food coupon marketing is quite low compared to other forms of marketing restaurant. However, one important point to note here is that coupon may lead to attracting new customer, however loyalty of a customer is driven by experience and engagement, and that needs to be handled separately.

Designing your Coupon

  • A coupon can be designed in attractive colors highlighting words like Offers/discounts/off!
  • Keep the content as simple and transparent as possible.
  • You should keep an expiry date for each coupon; this will avoid a heap of troubles. Write it in clear visible font to avoid customers who misunderstand it.
  • Clear terms and conditions need to be mentioned. For example,” Not valid with any other offers” or “Offer only for students” or any such condition.




Ways to Distribute Your Coupons

When it comes to identifying the right channel of distribution, restaurateurs need to be extra careful. It should never be a long term strategy. They need to be quick and agile in adopting the channel based on the performance analytics.


  • Coupon sites: Many restaurant websites promote free coupons where you can publish your coupons for the entire audience. Posting coupons on local websites, as well as coupon based sites, can draw a wide customer attention.According to a recent report by ET, 82% online shoppers used coupons in 2015–2016.
  • Email Distribution: Offering loyalty coupons is a great way to promoting repeat footfalls. Here you get an advantage of privacy and hence you can provide exclusive deals which won’t be available for public at large.
  • Coupon Banners: Coupon banners are also popular to attract new or repeated customers. Relevant banners in relevant food sites at relevant section can attract and drive great sales


  • Distributing flyers: Coupons in form of flyers can be distributed at places where the target audience is more. Great places to distribute such food coupons can be food courts of malls, newspapers,
  • Coupons via post: Coupons during the festival can be clubbed with a greeting card and sent to customers to their physical address. Such coupons can be distributed for premium customers.

Cost of Coupon Advertising

By studying the above ways of coupon distribution, we see that cost of coupon advertising can vary from free to several thousand, as per the budget. While considering the cost incurred for food coupons advertising, not only the cost of coupons should be included but also an estimate has to be drawn on discounts offered via these coupons.

The following formula can be used to estimate the cost of coupon advertising:

Cost of bringing in new customers via coupons = (Cost of Advertising + Cost of orders served to new customers (who came via coupons) + Lost revenue for same coupons used by loyal customers — gains achieved from new customers) / Number of new customers coming with the coupons



Discount coupons are a great secret ingredient to increase your profit margins but not the only factor to study and focus on while advertising. It is equally important to focus on how to retain the new customers coming to your restaurant via coupons and convert them to your loyal customers. It will be a good practice to plan retaining policies while planning for discount offers. For discount offers a proper balance has to be planned between attractiveness and profitability.

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About Author

Abhishek Moharana
Abhishek Moharana

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