Turbulence hits Air Miles scheme
Important lessons are to be learned from the news this week that the promotion linking restaurants with the enormously popular Air Miles marketing scheme has caused disappointment among some participating restaurants.
The first lesson is that a grand name and a grand idea are no guarantee that the offer will work for everyone; the second lesson is that there is more to making a profit than just pumping up the volumes.
Any scheme that sets out to boost restaurant business in an honest and fair-minded way is welcome. Yet it is prudent to remember that not all schemes provide the same benefits for everyone who joins.
Some restaurateurs who signed up for the Air Miles promotion have found that instead of attracting high-spending new customers, the bulk of those waving Air Miles cards are existing customers or not particularly high-spenders.
The Air Miles promotion takes 17% of the bill as a fee, so it is alarming for restaurants to suddenly lose that sum from profits made from existing customers. It has left some restaurateurs asking themselves "what profit?"
Interestingly, supporters of the Air Miles scheme include high-turnover restaurants in central London such as Bentley's and the Grill Room at the Café Royal. That clearly shows that in the right location and with a high-volume operation, the Air Miles marketing scheme is successful.
The contrary reaction from restaurateurs in Kent who are regretting joining the promotion suggests that one of the keys to benefiting from the Air Miles scheme is that wonderful legendary phrase, "Location …"
Yet a question-mark hangs over whether those who joined the Air Miles scheme thought deeply enough about what effect a sudden evaporation of 17% from the bottom line was going to have.
The final lesson to be learned from this promotion is that no matter how good the pedigree or how convincing the sales pitch, keep a cool head and do your sums before joining any marketing scheme. It may give you a lift-off or then again a bumpy landing.
