3 creative ways to boost business in slack times

Money Matters / Joseph Anthony

It was spring in the Northwest, and finer restaurants in Portland, Ore., were hurting.

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The decline in the high-tech industry had slammed the financial prosperity of Oregon, a state that counts Intel among its largest employees.

In recent years, Oregon regularly has had the highest or second-highest unemployment rate in the nation. For the first time now in more than a decade, more people were leaving the state than moving into it. Uncertainty about war, about work and about the national economy was causing people to rein in their spending, particularly discretionary spending such as restaurant meals.

The challenge the restaurants faced — how to combat or respond to what they hoped was just temporarily soft demand for their product — is something that virtually every small business has to deal with sooner or later. By creatively addressing the problem, a business can even turn a time of weak sales into a marketing opportunity.

Here are three examples of how restaurants and other businesses have done that.

1. The "25 for $25" program

Just spending more money on advertising wasn't going to help any one restaurant in Portland. What was needed was something that would persuade people to get out of their homes and back into the habit of dining out again.

To accomplish that, 25 restaurants came up with the "25 for $25" promotion. They advertised special three-course dinners for $25 and bought ads to let people know that customers could come to any of the restaurants and get a full meal (not including beverages) for that price.

Because they were working together on the promotion, the cost of advertising it was far less than if any one restaurant had tried doing a solo promotion. The campaign also got the restaurants some free local publicity — no longer was it just a promotion; it was news.

"If just one restaurant tried doing something like this, it would have appeared to be desperation on their part," says Vitaly Paley, co-owner and chef at Paley's Place Bistro & Bar. "The power of many is a lot greater than the power of one," says Paley, who helped organize the promotion.

Sure enough, the public responded to the perception of a good deal.

"We went from 80 diners on a Monday night to 130," Paley says. "Lots of the restaurants participating in the program had lines out the doors. All of a sudden, the waiters are making more money, the cooks aren't seeing their shifts cut, the purveyors are happy because they're selling more to the restaurants than they had before. It was great for morale, and everyone benefited financially."

The promotion didn't even cost a great amount in reduced sales per customer. Many diners didn't just order the $25 menu; they also ordered wine or other items as well. One of the restaurateurs told me that the average tab for a couple taking advantage of the promotion was about $85.

The promotion was so successful that the restaurants are talking about making it an annual or twice-a-year event.

2. Same attraction, different prices

For some businesses, the problem isn't overall demand, but demand on specific dates. Professional sports are probably the best example of this. A baseball game between the New York Yankees and Boston Red Sox is virtually a guaranteed sellout; the Florida Marlins vs. the Milwaukee Brewers isn't likely to have much buzz around it.

The Chicago Cubs were one of the first teams to try to address this issue; the team has for several years offered half-price tickets for certain dates in their schedule where they figure that demand will be relatively low. In 2003, for example, the Cubs had eight early-season weekday afternoon games at which all tickets were half-price.

As with the restaurants, the baseball team gets lots of ancillary benefits from the promotions. The tickets may be discounted, but fans who otherwise wouldn't be in the park are likely to also spend money on food and souvenirs. Good crowds even for off-peak dates enhance the ballpark aura of fun and desirability.

It's also part of a good long-term marketing strategy. "We're selling a ton of these tickets to school groups and people looking for value," says Frank Maloney, director of ticket operations for the Cubs. "We feel that we are developing the next generation of fans, and at the same time we're getting 30,000 people into the ballpark for weekday day games early in the season."

3. Same pricing, special attraction

The Ahwahnee Hotel in California's Yosemite National Park was in such low demand between Thanksgiving and Christmas that it used to close its doors entirely. "The ski area didn't open until mid-December; the summer activities like rafting and horseback riding were shut down. It was just deemed good business sense to close for a few weeks," says Kerri Holden, spokeswoman for the Yosemite Concession Services, which runs the hotel.

One year, the hotel management decided to do business a little differently. They offered visitors a special wine-oriented package, which included a hotel room, wine tasting and dinner.

That modest beginning has developed into eight three-day packages that keep the hotel and much of its staff busy during those formerly shuttered weeks. It's still a "down" time of the year for tourist attractions, but that doesn't seem to much matter to the more than 1,000 wine buffs who attend the tasting sessions and enjoy a quiet couple of days at Yosemite.

The hotel gets the added benefit of being more attractive to potential employees. Seasonal layoffs were much more common before the wine program. "It was difficult to keep our best employees because they wanted a more permanent and secure position," Holden says. "We how have better appeal for people looking for a year-round career."