Coupons in the QSR space: Pros and cons
Workstream Blog

Coupons in the QSR space: Pros and cons

By Workstream

April 25, 2022 | 3 min read

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In the restaurant industry, attracting new customers and lapsed customers is paramount. This is why so many use discounts, promos and coupons to draw customers in with bargains. But are coupons genuinely effective in the QSR space?

You’re about to find out. In this blog post, we’ll be diving into coupons as a marketing strategy, which franchises are using them, and some of the benefits and disadvantages to using coupons as a QSR.

Untitled (3)Photo by Erik Mclean on Unsplash

Which QSR franchises are currently using coupons?

If you’re thinking to yourself, “Coupons are old school. Who clips them anymore?” You’re slightly right—and you’ll want to keep reading. Most coupons today are distributed digitally through branded apps.

McDonald’s

The McDonald’s app allows customers to access digital coupons and get discounts. McDonald’s started a free fry campaign to incentivize their customers to download their app. 

The free fry campaign involved McDonald’s customers getting free fries with any purchase over $1, but only if they had the app. This fueled a surge in downloads, which allowed McDonald’s to keep offering deals and drawing customers in via coupons on their app. 

Part of McDonald’s business strategy to compete with Starbucks, which has long been offering in-app loyalty cards and discounts and receiving a third of their orders via the mobile app, is increasing app users and usage.

McDonald’s use of discounts has helped them outperform competitors by up to 70 basis points during difficult quarters, getting customers to order more when they come in.

Untitled (2)

Photo by William Enrico Jr Quijano on Unsplash

Starbucks
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Photo by Douglas Bagg on Unsplash

Starbucks wanted a better way to attract younger people, which drove them to offer coupons and loyalty cards in their mobile app. Starbucks has the most regularly used loyalty rewards app, demonstrating that coupons can be used effectively.

Starbucks incentivizes their customers to use their app by offering free in-store refills to those who have the app. Through their app, they also offer:

  • Birthday rewards
  • A star system that gives you two stars per dollar you spend
  • ‘Challenges’ every month that grant you extra stars (like ordering any macchiato drink)
  • Member offers and discounts

The Starbucks app goes above and beyond to make its users feel like they are playing a game; the more you visit Starbucks, the more points you get. Starbucks members usually spend more than other customers, representing 39% of the chain’s sales.

What are the benefits of using coupons as a QSR?

Coupons fulfill an ‘ever-growing need for savings, caused by global economic turmoil.’ Now that we have looked at some of the successful uses of coupons within top QSRs, let’s talk about the benefits of using coupons.

Coupons make launching new menus easier

If you have an app for your restaurant, send your customers alerts to let them know when you launch a new menu item. Offering promotional discounts will make consumers more inclined to try something new (and maybe again in the future).

Coupons incentivize sales

As we saw with the monthly challenges used by the Starbucks app, you can use coupons to make dining at your restaurant feel more interactive. As the coupon experts at DealA explain, “When customers have a coupon with an expiration date, they feel a sense of urgency to use it before it runs out, or run the risk of experiencing ‘anticipatory regret.’ Coupons with expiry dates can not only increase customer conversions but also help secure a customer purchase.”

Coupons can be used to boost sales on slower days

If your QSR has identifiable slow days, use coupons to bring in more custom on those days. Say sales figures are higher on weekends and slower on Tuesdays or Thursdays, you may want to introduce offers limited to those days. The same applies to slow parts of the day, such as lunch or breakfast.

five guys employees making burgers

Photo by Marcel Heil on Unsplash

What are the disadvantages of using coupons as a QSR?

There are some disadvantages to using coupons, and understanding the shortcomings of coupons can help you use them more effectively.

Preparation is necessary

If you’re offering a massive deal in your restaurant, you need to be sure that you have the staff and stock to cover a surge in customers. If you don’t adequately prepare for a coupon event, new customers could have a poor impression of your brand (and never return).

Customers may not spend more

A good portion of customers that use coupons only use them to get a cheap meal or free item. They may not spend more than necessary to redeem the coupon and may not respond to upselling. (In fact, they may have ordered the same thing with or without the coupon, so at that point, you’re just handing out a discount.)

Summary

Coupons work—but they may not always be profitable for your restaurant. Luckily, if you want to give coupons a go, you don’t have to indefinitely commit to them. If you feel like it may generate more customers for you, test into it. Run a promo or two and measure the results. If it works, try more. If it doesn’t work, make adjustments before fully calling it quits. After all, U.S. consumers love a good coupon.
By Workstream
Workstream is the leading HR, Payroll, and Hiring platform for the hourly workforce. Its smart technology streamlines HR tasks so franchise and business owners can move fast, reduce labor costs, and simplify operations—all in one place. 46 of the top 50 quick-service restaurant brands—including Burger King, Jimmy John’s, Taco Bell—rely on Workstream to hire, retain, and pay their teams. Learn how you can better manage your hourly workforce with Workstream.

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Personal Information and Sensitive Personal Information

Before we discuss the right to limit and the right to opt-out, we must first define personal information and how it relates to sensitive personal information.

Personal information is any data that identifies, relates to, or could reasonably be linked to you or your household. A few examples of personal information include:

  • Name or nickname
  • Email address
  • Purchase history
  • Browsing history
  • Location data
  • Employment data
  • IP address
  • Profiles businesses create about you, including pseudonymous profiles (“user1234”)
  • Sensitive personal information

Sensitive personal information or “SPI” is a subset of personal information, defined as:

  • Identifying information (e.g. social security number, driver’s license)
  • Financial data (e.g. debit or credit card numbers)
  • Precise geolocation (within a radius of 1,850 feet)
  • Demographic or protected-class information (e.g. race/ethnicity, religion, union membership)
  • Biometric and genetic data (e.g. fingerprints, palm scans, facial recognition)
  • Communications and content (e.g. mail, email, text messages)
  • Health and sexual orientation (e.g. vaccine records, health history)

Right to Opt-Out

Californians have the right to opt-out of the sale and sharing of their personal information. That means you have the right to opt-out of the sale of your personal information to third parties (e.g. data brokers, advertisers). You also have the right to opt-out of the sharing of your personal information to prevent the targeting of ads across different businesses, websites, apps, or services.

CCPA-covered businesses must provide a link to allow you to exercise this right. It is usually found at the bottom of a webpage and will say “do not sell or share my personal information” or “your privacy choices.” Sometimes businesses offer privacy choices through a pop-up window or form

To opt-out of the sale and sharing of your personal information, click on the link or use the toggle provided by the business and follow the directions. Doing this on every website you visit can feel burdensome, but to ease the burden you can automatically select your privacy preferences for every website by using an opt-out preference signal, or OOPS for short.

An OOPS is a user-friendly and straightforward way for consumers to automatically exercise their right to opt-out of the sale and sharing of their personal information with the businesses they interact with online. An OOPS, such as the Global Privacy Control. It can either be a setting on your internet browser or a browser extension. With an OOPS, consumers do not have to submit individual requests to opt-out of sale or sharing with each business.

Right to Limit

Californians also have the right to direct businesses to limit the use and disclosure of their sensitive personal information.

Businesses covered under the CCPA must provide a link on their website that allows you to request the limiting of your SPI, if they plan on using it in certain ways. That link will also typically be at the bottom of a webpage and will say: “limit the use of my sensitive personal information” or “your privacy choices.” Once you send this request, the business must stop using your SPI for anything other than to:

  • Provide requested goods or services
  • Ensure security and integrity
  • Prevent fraud
  • Maintain system functionality
  • Comply with legal obligations

Bringing it Together

In summary, the CCPA gives you the right to opt-out of the sale and sharing of your personal information and gives you additional rights to further limit the use and disclosure of your sensitive personal information.

When you exercise these rights together, you exert greater control in protecting your personal data which is important for your identity, safety, and financial health.

If you are on a business’s website and you can’t find the links to exercise your rights, remember to check their privacy policy. The privacy policy should tell you how you can exercise your rights under the law.

If you find your rights being violated, you can submit a complaint to CalPrivacy.

Next in the LOCKED series, we will explore the right to correct and right to know. Follow us on social media to get live updates or check back in one week for the next post.

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