Offering free appetizers to diners who visit your restaurant will cost you some money, but there are some circumstances when free appetizers may result in customers spending more at your restaurant than they otherwise might, ultimately boosting your revenue, and possibly, profit margins. Here’s a look at some surprising reasons giving your customers a free appetizer could actually encourage them to eat more.
Initiate a basic human interaction response. The idea behind free appetizers is actually based less on diner hunger, and more on the premise behind social exchange theory, which essentially postulates that humans make decisions based on the perceived balance that exists in their relationships and an attempt to “reconcile” any action that leads to a perceived imbalance — including the treatment they receive at a restaurant. When you give a diner free food, according to the theory, he or she may be prompted to spend more on their meal, to attain a sense of balance in exchange for what you gave them.
Determine the profitability of the chain reaction. Free appetizers can work to your advantage or detriment based on what the free appetizer entails, including its size and subsequent cravings it may help to induce. For example, offering a free salty appetizer like edamame may create thirst, prompting diners to order a higher profit margin drink like soda, flavored or alcoholic beverages, when they might otherwise simply sip water until their main entree arrives. Similarly, offering diners an appetizer that complements another dish on the appetizer menu (like chips and salsa that then make a person want to dip a chip into queso or guacamole) can encourage them to order more paid appetizers when they otherwise might not. (With that in mind, however, it’s important to “weigh” whether inducing more appetizer orders subsequently decreases the chances that they’ll order a full entree).
Define what “more” means. The value you’ll realize from free appetizers is contingent largely on the goals you have. For example, do you want customers to visit your restaurant more often, or order more higher-profit items? The distinction is an important one, because it impacts critical factors that all have bearing on your revenue, including the amount of time diners remain seated, how often they come to your restaurant — and how they perceive your brand. For example, though casual chain restaurant T.G.I. Friday’s generated considerable press (and reportedly boosted diner traffic) with a $10 promotion for “endless appetizers,” restaurant experts speculated that the offer could harm the 50-year-old brand long-term more than it provided a short-term benefit, particularly among the younger generation, who tend to value higher quality, fresh and healthier options above portion size, and even price.