Is Happy Hour a Good Business Practice for a Restaurant?

Happy Hour, Tappy Hour, Appy Hour, regardless of your restaurant type, whether you serve Alcohol or not, you may benefit from implementing a Happy Hour type of concept.

It's a common fear of restaurant/bar owners that Happy Hour will reduce their revenue by taking their regular customers and having them eat or drink at a discount.

As common as this thinking is, in most cases, it's simply not true.

The occasion where it can be true and you must be careful, is in the case of a restaurant that never runs at capacity, even on its busiest days. 

If you are in this situation, it might hurt you a little bit in the short term, but it can also be the thing that sparks you to being busier.

There are essentially 3 ways to increase sales in a restaurant, bar, or pretty much any business;

1. Get more customers (customer acquisition - marketing, advertising, signage, referrals) 

2. Increase average purchase of customer (up-selling, cross-selling, bundled offers) 

3. Sell more often, to each customer (customer retention and inviting back on slow days)

Happy Hour done right can actually help you with all three.

1.       Get More Customers  

By having and promoting a happy hour, your existing customers are much more likely to bring people they know to your establishment.  Treat them right at happy hour and you can retain a new customer.  Want maximum bang for your happy hour bucks, make sure you are using a mini CRM tool like Small Business Dream to collect all your customers data.

2.       Increase average customer purchase

By putting your higher margin items at a discount like special drinks, or premium beer, or new appetizer items, you're getting people to step out of their regular purchasing patterns to try some of your premium items. This can lead to higher average checks when they return outside of happy hour.

3.       Sell more often to each customer. 

Again by having new customers come to check you out at a discount, if you have a CRM type tool in place, letting them join your newsletter, or specials updates letter, you will have the ability to have them come back due to your direct invitation with an offer that is NOT happy hour.

Done right, with the purpose of building your list to re-market to, Happy Hour can hardly ever get you in trouble.

Interestingly enough, the busier your restaurant or pub is during your peak hours, the more you can increase sales by having a happy hour!

If you can move 10% of your customers to come before 6 pm, having them OUT by 7:30 pm or 8 pm in the case of a restaurant, it allows you to pick up a few more reservations or walk-ins that you may have turned away due to being full. 

This is a MASSIVE HIT TO YOUR BOTTOM LINE in a positive way if you can benefit from this.

There is also a savings to your labour costs, AND a benefit to your staff.

As many restaurants employ part time staff, whether you schedule them 5 hours or 6 or 7 makes little difference to the staff member, other than the positive of they get more hours and possibly don’t need to work 2 part time jobs.

Do your job right, and in a tipping economy, you can even earn more in the tip pool. 

There are a number of things you can do to really multiply the advantage of your Happy Hour;

1.       Collect customer data with a tent card on the table offering them to join your newsletter for special offers, like you on Facebook, follow you on twitter, follow you on Instagram etc.  

A QR code can be fun and easy printed on your tent card, make sure you have a super simple URL using a URL shortener so customers can easily enter the URL to be taken to your newsletter signup page. 

2.       Have a draw for a $100 gift certificate for any new people who subscribe to your newsletter 

3.       Offer a very simple and inexpensive appetizer (nuts, edamame, chips) for any who like your Facebook page, and check in.

Once you have built your customer list, you can really start to reap the rewards of your Happy Hour endeavour by filling your restaurant AT WILL on a slow day, by simply emailing out a special offer for those who come on the slow day at the slow time!

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