Denny’s is giving away a FREE breakfast to everyone today, Tuesday Feb. 3rd from 6AM to 2PM

If you were one of the 95.4 million people who viewed the Superbowl yesterday you might have seen the Denny’s commercial that states they are offering a FREE Grand Slam breakfast to every person in America today.
What a bold offer!
So why give it away for FREE?
Such a audacious offer should get new customers flowing through the door — even though it may seem costly – it can be a brilliant long term marketing strategy.

Denny's Free Grand Slam Breakfast

Denny's Free Grand Slam Breakfast

So, let’s look a little deeper into this one.
1. Now, I don’t know what Denny’s usually charges for a Grand Slam, but the first thing to understand is that the REAL cost to them is probably only in the neighborhood of about 20-30% of that.
NOTE: There are things you can give to your prospects that have high perceived value, that don’t cost you all that much to give away or produce.  I, for example, often give away SEO services much like a dentist I recently came across who gives new patients complimentary whitening… a drop in the bucket compared to years worth of treatments, no?
2. Of the people who come in to Denny’s many of them will probably order something else like a coffee, or a juice… or any other high margin item that offsets some of the cost of the promotion. This is why supermarkets have “loss leaders” — they know the people who come in will buy other stuff too.
3. Don’t kid yourself. It will ALWAYS costs you some coin to get new clients in the door. If it’s not a couple bucks to pay for their breakfast, it’s postage and paper, or hundreds of dollars for that newspaper or Yellow Pages ad, or the new signage you just bought. There is always a cost per acquisition, and you should know what it’s worth to you — long term — to get a new client in the door. For Denny’s it’s obviously more than what they’re giving away. That’s because…
4. Denny’s knows that the real money is in the REPEAT business. The little bit they actually spend to get a new customer in the door is merely an investment to reactivate “inactive” customers and attract a whole host of new customers. The very next time they come in, Denny’s is in the black.
Note: The “law of reciprocity” also comes into play here. When you give (or do) something valuable for your clients, they often feel more compelled to do something in return. That generally means giving you their business or their endorsement.
5. Publicity. I bet they’re getting a good amount of it with an offer like that.
Anyway, as crazy as this promotion may sound, it’s obviously a well thought out one.
Cutting into your margins to get a new client in the door (or to reactivate an old one) may seemlike a tough pill to swallow, but depending on your backend… your repeat business… and your ability to generate referrals… it may be just be brilliant.
Well, if you go to Denny’s this morning… enjoy your bacon.

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