A Gift to be Simple

By Reid A. Paul, Editor-in-Chief | May 01, 2005

Suddenly gift cards are popping up everywhere. Restaurant chains from Smith & Wollensky to McDonald's and all points in between are coming out with gift cards. Amid the interest and excitement about gift cards, Hospitality Technology recently talked to Levy and Melting Pot restaurant companiess, to discuss the development of their gift-card programs and best practices they've developed.

Hospitality Technology: What prompted Levy Restaurants to start a gift card program?

Gina Johnson: We had been working with Ernex (ernex.com) on our Levy Preferred frequent dining loyalty program. We decided that there would be some efficiency and marketing opportunities in moving from paper certificates to developing a more technologically updated gift card program. Earnex had the capability to do that through the current technology that we're already using with them. So it was an easy upgrade for us because we didn't need to add any technology.

HT: What are your goals for the gift cards?

GJ: We want to increase sales and provide an additional marketing opportunity. When guests give our gift cards as presents, it's an opportunity for somebody new to come in or for an already loyal customer to join us again. The program helps streamline the process for our operators and increase sales moving forward, especially with detailed reporting.

HT: Is the reporting important to you?

GJ: Now we are able to see exactly which gift cards are redeemed, and how much of those cards are redeemed, and what incremental sales we've gained as a result of those gift card sales. That's just a whole new view on our program that we weren't able to see in the past.

HT: How do you communicate with guests about the gift cards?

GJ: We always want to enhance our guest experience. We even cross-market the loyalty and gift-card programs by offering our Levy preferred members points for purchasing gift cards. Our servers are our front-line team for selling both programs. There is also a prominent presence for both programs on our website. We have a lot of in-store collateral to promote the programs as well.

HT: Does the gift-card and loyalty program help promote Levy Restaurants as a brand?

GJ: Each restaurant stands on its own and that is how most people recognize them. Once we have that connection with the guests, we're building on it by presenting the other options. We try to focus on the individual brands, which is really what guests connect to.

Money in the Pot
At the Melting Pot restaurants, fondue fanatatics are an important fixture. Not surprisingly, gift cards have played an important role in maintaining and expanding that close relationship. "Gift cards and the products that we offer for sale on the Internet site are ways for our loyal guests to share their passion for the Melting Pot brand with friends and family or business associates," explains Bob Johnston, chief operating officer at the 87-unit restaurant chain.

"That's really where the marketing piece comes in, in terms of our Value Link (valuelink.info) gift-card program," says Johnston. "Can you think of a better way to market your restaurantthan having a loyal user send a gift to a friend or family member or business associate? It's a very powerful marketing tool."

According to Johnston, Melting Pot is only scratching the surface in communicating directly with its loyal Fondue Club fanatics.
"There are going to be a lot of enhancements to that marketing product starting this year and carrying us into the future, he adds. "And it's going to be one of the primary ways we communicate with our guests. We've had the gift-card program for a couple of years already. Still it is truly in its infancy in terms of what we think it's capable of doing."

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