Who Has Time to Cook? Use Gift Cards Instead
May 05, 2008
Why retail restaurant gift cards are being devoured
By Anne Marie D. Lee
The home-cooked meal, atomic family seated together at the kitchen table, is a once-familiar scene, now turned museum diorama. The demands of today's average family have both parents working full-time jobs—that most likely include overtime—and kids being carpooled from one after-school obligation to the next. In short, time is perversely scarce, so after each family member comes home from a long day, eating out together at a casual local restaurant is not only a relaxing and fun way to ensure family together time, but as far as time and money goes, it's practical, too.
No wonder, then, that dining/restaurant cards have been the most popular category in the Incentive Gift Card IQ survey for the last two years running. "Dining out is a special experience, a break from the ordinary to spend quality time with friends and family," says Bridget Moen, brand manager, gift cards, for Applebee's Services Inc. "Receiving a restaurant-branded gift card is special because of the emotion it invokes. People love to have a reason to go out to eat, and receiving a gift card is the simplest and most practical way for them to say 'Let's go!'"
Moen adds that popular restaurant brands are successful gift cards because they are instantly recognized by recipients, because they carry broad appeal and, most importantly, because redemption is a snap, as large retail restaurants are easy to find. As an award with a high perceived value, Moen says that strong restaurant brand gift cards are a sincere gesture to reward a job well done.
Says Jon Garbow, program coordinator, gift/incentive sales at Darden Restaurants Inc., "Companies should look at restaurant gift cards that feature strong brands with a national presence and can be redeemed across multiple restaurants. This is true of the cards issued by Darden Restaurants, redeemable at the company's flagship brands, Red Lobster and Olive Garden, and four others, Garbow adds. As a multi-brand restaurant card, the creative artwork of the Darden Restaurants gift card, notes Garbow, is branded with all of the Darden Restaurant logos, making it very clear to the end user that one card can be redeemed across all Darden brands. Says Garbow, "Because every individual has unique tastes, the ability to give the recipient a choice speaks volumes to the effectiveness of the reward of the gift."
From the card giver's perspective, local specialty restaurants don't carry the wide appeal that the big national brands do, according to Cy Moore, senior new-business manager at Carlson Marketing, and are more targeted for specific applications. Says Moore, "The Red Lobster, Olive Gardens have always been popular out there for us. Our own TGI Friday's card is very popular." (Both TGI Friday's and Carlson Marketing are owned by Carlson Companies.) Moore also finds that around the holidays, program participants often redeem points for dining-out gifts to family members. He uses as an example a star performer in California, redeeming points for restaurant gift cards for her family; she is going to look for a chain that she knows has restaurants in many locations. Says Moore, "They're going to look for the national footprint versus trying to find out if McCormick & Schmick's [Seafood Restaurants] is out there."
Popular Card Programs
Historically, food and beverage cards, and particularly restaurant cards, have been top redeeming items in traditional loyalty-based programs, popular in the financial services sector as a way to reward customers for using credit cards. Still, it's as employee rewards—and specifically for those who are responsible for customer satisfaction—that retail cards are being used the most.
The most typical usage of restaurant cards in corporate incentive programs is for what Moore refers to as "Kudos" or "Atta Boy" type of awards—spot awards in which managers are given a stack of cards to hand out to employees whenever they display some type of exemplary behavior or performance. Such awards are often seen in the telecommunications industry, or wherever there are large customer service centers. "Basically the manager will walk over and say, 'Hey, Barry, thanks for putting in the extra two hours tonight. Our call volume was extraordinarily high. Just wanted to thank you for staying in there and keeping our call service levels on target,'" says Moore. "You see a lot of that in the employee customer-satisfaction space."
For spot reward programs, the most common card denominations are $10 or $25, according to Moore, who adds that it's key for management to think about how the recognition is going to be perceived by the recipients. When rewarding an employee for going above and beyond, Moore says, the rule of thumb should be to focus on a $25 amount. Moore feels that handing out a card for a really low amount, like $5, might be worse than not giving anything.
What's to Come?
As people become more reliant on eating out, emerging trends lean heavily toward greater concern for nutrition and quality. In a 2006 study from the U.S. Department of Agriculture's Economic Research Service, Let's Eat Out: Americans Weigh Taste, Convenience, and Nutrition, the desire for healthy choices is one of several decisive factors influencing consumer behavior, along with convenience and an enjoyable dining experience. This trend is something that national chains like Applebee's, which has a partnership with Weight Watchers, and TGI Friday's, which has been marketing it's new Right Portion, Right Price menu, are addressing head-on.
As for the cards themselves, they are under constant development. With approximately 2,000 restaurants, including 18 international locations, Applebee's gift cards are extremely popular, according to Moen. They offer "strong brand recognition and high-quality offerings at a great value," Moen says. "Guests can expect to see Applebee's gift cards leading in many innovative ways that deliver added value. New technology, enhanced production processes and refined material types are just some of the areas we are researching when it comes to upgrading our gift card program."
Send comments to incentivemagazine@nielsen.com.
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