The Happy Hour Concept Turns the Tables on Time Limits
The phrase “happy hour” has long been associated with the concept of businessmen and women stopping by the local bar or pub for a quick cocktail to wind down from their hectic day at the office. And, for a while, this was the only association most had with the phrase, but as the work-life dynamic of the consumer changes, so does the dynamic of the happy hour. Today, the phrase is better linked with a more all-inclusive customer base that attracts those who may not be seeking refuge from rush hour traffic. That’s because for the past few years, all types of businesses have been capitalizing on this concept to increase sales during slower hours–enticing consumers with special deals on products during a limited-time only promotion. This arrangement not only benefits the consumer but also benefits the business.
Time for Change
As the strategy of the happy hour continues to change, so do the fundamentals of the concept, such as the time frame itself. While called happy “hour,” many businesses are extending this limit, increasing the amount of time anywhere from two to three hours. This time span usually bridges the gap between lunch and dinner hours but can extend to after dinner hours depending on the operating periods of a business and where improved cash flow is needed. In a highly competitive market, some happy hours can range for a period of days promoting select items on certain days of the week rather than definite hours. This tactic is used by business owners to draw customers into their establishments instead of similar establishments that share the underlying strategy of happy hour. So, while the concept sounds restrictive, the execution options are not as limiting as the name implies.
Finding a Happy Medium
Sometimes small business owners/operators are required to “wear multiple hats,” as they say, which could entail developing various marketing strategies to promote products and/or services. And with this, it is important to understand the different types of promotions and the goals that these campaigns hope to achieve. The idea of happy hour may seem like just another LTO, or limited-time offer, but this concept is in fact different in a few key parts. LTOs tend to focus more on product or service promotions, while happy hours focus on appealing to a particular audience. This approach could be aimed at gaining a new base of clientele or appealing to loyal customers. According to an article discussing happy hour promotions posted on POSSector.com, in order to appeal to their audience, businesses should consider the behavior of their target. The article further states that targeted visitors would be best defined if their behavior is tracked. It is suggested that business owners consider who their customers already are, and who can be your new guests. Determine if they are sitting in office buildings close to your catering facility, or at universities, sports clubs, and even social networking sites or web portals. These queries into the habits of specific potential customers are important to ask when it comes to developing a strong backbone of a successful happy hour campaign.
Is the Glass Half Full or Half Empty?
As with any marketing initiative, there will be advantages and possible disadvantages to implementing a happy hour concept. As previously mentioned, the most common goal of this promotion is to increase customer base or loyalty among regular customers through special deals or discounts during slower business hours. Primarily, this concept aims to turn new customers into frequent patrons. This would ultimately add to new sources for steady sales and tip the competitive edge in favor of the business. Information obtained from blog.bar-i.com, a resource offering helpful material and topics to the bar industry, reports that if people initially check out your bar for the specials but like the environment, they may begin to frequent your bar more often.
To gain more detailed clarification on what elements are the most attractive to consumers, the National Restaurant Association conducted a survey, found in its online article “Happy Hour and Late Night Success” which concluded that price considerations ranked high on the list among consumers surveyed; 46 percent said they were drawn by good prices on drinks, and almost as many (41 percent) said value-priced food was an attraction. The survey further reported that one quarter (26 percent) pointed out that happy hour is a lower-priced alternative to a dinner out at a restaurant; although almost as many (24 percent) said they appreciated the chance to stay on for dinner. These statistics establish the possibility for increased sales and customers, but also suggest that it could have adverse effects on other hours and promotions throughout the day. Bars and restaurants serving alcoholic beverages offer insight into happy hour sales models and can act as a reference for allowing other businesses to examine what has worked in the past and what tactics offer smaller odds of success. While not always being detrimental to a promotion’s success, it is important to be aware of and plan appropriately for any possible drawbacks. One of the main hurdles to plan for is avoiding the happy hour concept to pilfer sales and visitors from the more steady hours of business. According to “Is Your Happy Hour Cannibalizing Your Sales”, as posted on blog.bar-i.com, there will always be regulars who will patronize your business with or without these specials. However, these regulars benefit from cheap items, though you’re not experiencing an increase in business. In addition, some new business may only show up for the discounted prices and not order anything from the full-price menu.
10:00 pm is Five O’Clock Somewhere
Several businesses are aiming to target a younger audience with the hope to create long-term regular customers. To achieve this, most establishments are focusing on promotions during the after-dinner hours. The National Restaurant Association determined that late night is an opportunity to attract younger consumers. More than half of consumers under the age of 35 make late-night restaurant visits several times a month, as compared to just a quarter of consumers over 35. Also, one-third of 18- to 34-year-olds agree that they would visit restaurants late more often if these locations stayed open later, compared to just 16 percent of consumers aged 35 and older. In addition, late-night specials on adult beverages are of far more interest to younger consumers than to older patrons: 41 percent of consumers aged 21-34 say that such specials are very important to their decision regarding whether to visit a late-night restaurant, versus just 27 percent of those aged 35 and up.
Based on these statistics, fast casual restaurant Applebee’s created a loyalty program called “Club Bee’s” which targeted customers who would be encouraged to not only visit during its slow hours on weekdays, but also encourage a more social environment for patrons to bring friends and family. This concept included special promotions and incentives to visit regularly. And, to sweeten the pot, Applebee’s also offered extra enjoyments by adding live music and other local event opportunities from the community. Bringing in elements of the local community is also a strong strategy to increase customer loyalty. When customers feel that they are being catered to on a more personal basis, and that a business shows an interest in the community, they feel a sense of connection with the establishment – thus, adding to the loyalty factor.
While this late-night tactic would be easier for some to implement than others, a few key factors to take away are:
- The time of day is a key element in reaching the desired audience.
- Businesses should look beyond getting customers in the door, and strategize how to gain loyalty from new and existing visitors during non-promotional times.
- Appeal to customers during these times as part of the community. Perhaps offer items that appeal to local events or tastes.
- Finally, be sure that whatever the strategy behind the chosen happy hour campaign is, the customers feel that the promotions being offered are related to their behavior and habits.
Time is Money
Once the advantages and disadvantages have been considered, it’s time for a business to decide how to go about realizing their own happy hour concept based on what’s right for them. One key piece of attention to relay to a happy hour plan is starting small by focusing on a model that can be easily applied to current daypart menu offerings. The National Restaurant Association advises that food and beverage offerings at happy hour should support the restaurant’s concept and culinary position, meaning the overall tone of the promotion should not divert from the tone of the establishment. The organization supplies the example that if beverages do not account for a large following among customers, it is better to not offer these lower-selling items during the determined span of the happy hour, but to instead focus on offering a staple item or seasonal special to maximize the impression consumers develop from their visit. POSSector.com cautions to pay special attention to the promotional message for your happy hour program. They suggest that the message must be short and clear, as your potential guests need to understand and figure out what you offer. Also, be sure to evaluate the cost and gain from the sales during happy hour. It may require a price increase on certain high-selling items to compensate for any loss during the happy hour offer.
When it is time to finalize the details of a happy hour campaign and hang the sign in the window, remember that if executed thoughtfully, the benefits could lead to long-term payoffs – writing a happy hour story that ends with happily ever after.