Ch. 18 Sales Promotion

Companies spend six times more gaining customers than keeping them. One way a business can attract a new customer is with coupons. The goal of the coupon is to introduce the customer to a product and have them repurchase. 85% of coupons can be found in newspapers and magazines; these coupons are called freestanding inserts (FSI).

Hard Rock Café is a part of the 15% of coupon distributors that does not use FSI to gain new customers. HRC sets up its coupons for guests that have already made a purchase. When a guest spends $20 or more at any café, their receipt has a survey code. After they go on line and complete the survey, the guest can print a $5 dollar coupon. This is a great way to gain customer loyalty because the guest knows after their first purchase they will continue to receive $5 off their next purchase.

In addition to coupons HRC has a frequent buyer program; the All Access Card. For $25 a guest can purchase this card and use it at any HRC worldwide. The benefits include a $20 rebate (which can only be used at the café), priority seating and $5 off every time you spend $100. All purchases are added up on the card. Each dollar spent is a point, points never expire and the discount is kept on the card. The All Access Card can be purchased at any café and at hardrock.com.

The goal for any retailer is to get a consumer to repurchase their product. The downside of both of these promotions are guest will never know that they can get a $5 coupon if they never go to a Hard Rock. Since HRC does not use FSI they are not penetrating new markets. While the All Access Card is $25, most frequent buyer programs are free to sign up for and offer similar dollars for points strategy. This may turn people off from buying it and may limit repeat purchases.