Denny’s did you think about an ROI?

From Arbyreed's photostream

From Arbyreed's Photostream

Everyone is all a buzz about the Denny’s Super Bowl Grand Slam Giveaway.  Adweek calls it a “Hit” in this article. But if it was such a hit, why doesn’t everyone simply give away their product in promotions?

Heck, anyone could giveaway stuff for free to millions of people, the key is doing it and making money. The main question Denny’s and anyone that does a giveaway needs to be asking is, “am I creating new customers by doing this”, or “does it get my current customers to increase their spend”?

Is Denny’s ever going to get a positive return on the $5 million they spent (according to Adweek) on this promotion? For the sake of easy math, let’s look at some easy numbers and calculate their break even point.

At best Denny’s makes $5 on each Grand Slam they sell (according to Adweek).  That means they need to sell an additional one million of them, to make this promotion break even. (They could sell higher margin product etc. but is it really gonna make that big of a difference? They’re not a steakhouse)

Does anyone believe the people receiving these free Denny’s meals were so happy with them, that they are going to come back for more? Let alone one million of them? Was the experience so gratifying or outside their expectations they had for Denny’s that they said, “dang I need to go to Denny’s more often”?

I don’t think that many people were convinced of that, nor do I think Denny’s believes it.  That is why they gave away coupons to try to get these new customers to come back.  So again they result to discounting their product to get rid of it.

The only way a company is going to make a giveaway like Denny’s work, is to exceed the customers expectations in some way. Everyone knows what a Grad Slam taste like, why didn’t Denny’s introduce a new product and give that away? At least that way customers might find a new product they love, and it would give them a reason to come back.

Or better yet, why not use this giveaway to introduce a lower price for the Grand Slam meal? Use the economy angle to promote it. Obviously they feel their product is not worth the $5.99 they charge, because they are giving  it away for free and couponing it. Why not start charging $3.99 everyday for a Grand Slam and say they are celebrating by giving them away for free for the first half of Feb 2nd?

It’s gonna take longer to get a return, but at least some people might actually come back. And by doing this it benefits everyone, not just the few who took advantage of the free breakfast.  At the very least some people might remember that Denny’s has a complete breakfast for only $3.99, right now all they remember now is that Denny’s gave away some free food.

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