6 Demand-Based Pricing Platforms for Restaurants
Airlines and hotels have done it for years, and now restaurants are getting in on the action with dynamic pricing structures of their own. With the goal of maximizing revenue and keeping their tables filled throughout the day, restaurants are using hyperlocal marketing platforms to incentivize guest reservations during off-peak times, like before the 6 pm dinner rush. Although not as common, some restaurants are also charging a premium for reservations during their busiest hours.
Here are six hyperlocal platforms that restaurants can use to implement demand-based pricing.
1. Leloca: Make the most of unused capacity.
A yield management tool with geo-targeting capabilities, Leloca offers a way for restaurants to quickly fill empty tables with paying customers. When restaurants have unused capacity, like after the lunch or dinner rush, they can create discounted deals. These deals are turned on and off with the push of a button, and restaurateurs are able to choose where their offers should be geo-targeted. (For example, a cafe could offer a deal exclusively to people who live in a specific neighborhood.) Customers find deals through Leloca’s mobile app. Leloca charges businesses $1.99 per deal code issued, with no charge for listing offers.
2. Savored: Attract profitable diners during peak and off-peak times.
Acquired by Groupon in 2012, Savored is a demand-pricing platform that provides restaurateurs with a way to offer discounts to guests who make reservations during low-demand times. Restaurants can also use Savored as a last-minute seat-filling tool, offering special promotions to fill reservation slots that have been cancelled unexpectedly. Restaurants maintain control over the times and numbers of tables they’re willing to list on Savored, and they can use the “Savored Dining Exchange” to identify and optimize the times when they could be filling more tables profitably. Savored charges a “small fee” to restaurants when guests make reservations through its platform.
3. Table8: Make extra money from prime time dinner reservations.
Known as a platform that charges users a fee to secure last-minute dinner reservations at in-demand restaurants, Table8 also functions as demand-pricing system for popular establishments. Partner restaurants agree to set aside a selected number of prime time dinner reservations (usually between 6:30 and 8:30 pm) exclusively for Table8. Table8, in turn, sells those reservations for $20 to $25 a pop and splits the fee with restaurants 50/50. As a result, restaurants are able to generate more revenue during peak busy periods without increasing the price of menu items.
4. OpenTable: Reward guests for making reservations during off-peak times.
OpenTable offers a pay-for-performance program, known as POP Marketing, that gives restaurants a way to increase bookings during periods of low demand. Essentially, restaurants can offer 1,000 bonus Dining Reward Points—a currency redeemable for OpenTable Dining Cheques—during the days and times when they have extra tables to fill. So-called POP Tables cost restaurants $7.50, versus $1 for traditional transactions/bookings through OpenTable. Base installation of OpenTable is around $1,000, in addition to a monthly fee that averages $199 per month.
5. Froogal: Market to nearby customers based on real-time availability.
Froogal is a promotional application that gives restaurants a way to fill empty seats on demand. When a restaurant is looking empty, its manager can create a promotion—like 50%-off appetizers—set to run for a limited time. Restaurants also have the ability to limit the number of seats they give away with each promotion. When the offer goes live, it’s pushed to Froogal users who’ve “favorited” the restaurant, and those customers can redeem the deal through the mobile app. Froogal is currently only available in Colorado. The service is free.
6. Groupon Reserve: Offer discounts based on when guests dine.
Launched in 2013, Groupon Reserve offers discounts at high-end eateries during periods of low demand. Restaurateurs who notice their tables aren’t filled for the upcoming night can make a selected number of reservations available on Groupon Reserve’s platform. Groupon customers can then book those reservations though their mobile devices, usually at the last minute, in exchange for discounts of 20% to 40% off their total checks. Unlike traditional Groupon deals, pre-purchases aren’t required for Groupon Reserve. Groupon charges restaurants a fixed fee, per diner, for the service.
Know of other tools that restaurants can use to fill empty tables at the last minute? Leave a description in the comments.
Stephanie Miles is a senior editor at Street Fight.