3 Awesome Ideas To Double Your Friday Happy Hour Sales
This 5 minute read can potentially add thousands more to your bottom line starting this weekend.
Having worked every position from a lowly doorman cleaning bathrooms to managing multiple venues with hundreds of employees, it’s safe to say we have a little experience in the hospitality industry.
And like you, we know running a bar can be very stressful. But it could also be incredibly rewarding: you watch people meet, get married, have their baby showers, and (sometimes) even get divorced all in the same bar. And 21 years later, their children restart the cycle over again. But how can you take that and turn into a strategic advantage?
Lifetime Value of a Customer
Simply put, the lifetime value of a customer is the net profit a business can predict each customer to be worth throughout their relationship with a business.
(Avg Monthly Revenue per Customer * Gross Margin per Customer) ÷ Monthly Churn Rate (% of customers who do not come back)
Theoretically, it is possible that the lifetime cycle of a customer could be 20+ years and that’s not including their children. Think of every customer as a portion of your yearly salary that will continue to grow as the years go on.
But what does all this mean?
So Why Happy Hour?
Knowing that each customer could potentially pay your salary for 20+ years, how can you strengthen that relationship? Help them create positive memories and/or meet a significant other.
Regardless of the age of online dating apps like Tinder, ~80% of people are still meeting their significant other through a friend, social setting, or work according to a recent survey.
And a most common situation you can find co-workers, friends, or even friends of co-workers is Happy Hour!
According to Nielsen Insights, U.S. Bars and restaurants generate 61% of their weekly revenue during happy hour alone.
Not only that but the average check including food and discounts is ~$69.
Another benefit of having a good happy hour is a strong transition into the Friday Night crowd.
As the happy hour crowd begins to dwindle, people who generally go out early (tourists, people in their late twenties/early thirties, etc.) are providing foot traffic looking for somewhere fun. As they enter your bar and the happy hour crowd leaves, the impression of your bar remaining busy doesn’t change. This keeps revenue going steady, bartenders are moving and making money (instead of sneaking drinks), and perception of the bar is positive as patrons reach out to their friends to let them know to get here ASAP.
Now for some ideas to get things going.
1. Double Your Revenue With Free Beer
One of the easiest ways to get large groups of customers into a bar is by booking parties. With a focus on happy hour, your target market is easier to define: businesses that close at 5pm, 22-30 year olds who work or live in the neighborhood, and tourists.
But what would make them want to come into your establishment as opposed to another one that’s closer to their job? Well, offer free beer!
Free beer? It might seem counter-productive until you break it down. Publishing an Ad in a paper could be upwards of $400 or more, Facebook/Instagram/Google Ads don’t work well for this market, and Groupon is good for food not drinks (where you make the highest returns). But with free beer its an investment that pays your customers directly. Here’s how we would do it:
1. Reach out to local businesses that represent your target market. If your establishment is known for fine dining and expensive drinks, it’s safe to say skilled tradesmen won’t be interested.
2. Offer to sponsor a happy hour for them to help paint them in a positive light to their employees. Say you will donate a few kegs (Bud or Miller Light) on tap and offer another beer or cheap cocktail, no shots, on special. This way you’ll appeal to a larger demographic encouraging them to show up.
3. Break down your cost. Ideally if a 1⁄2 barrel is $150, at 15.5 gal, that’s about 165 twelve oz beers. Now remember even if you are going to give away free beer not everyone is going to want to drink bud light, the rest will pay for something they want or another item on special. The free beer is just the promotion.
Therefore it can be safe to say that a single keg is enough for every 100 people booked. If 75 take the free beer on average most will be satisfied with 2, less the freeloaders. With a good system in place insuring everyone has one drink at a time, they will still most likely purchase at least 1-2 more. If BL is on special at $3, that’s a 150-300% return just on the free beer alone.
Bonus: Speak to your distribution company about having the beer you choose sponsor your happy hour for even more savings.
4. Another tip to keep expenses low is by putting a cap on the duration of the sponsored beer. Start early and end in the first hour it starts to get busy. This encourages patrons to get in early, purchase food, and unwind after a long week while they wait for friends and others to show up.
With the average bill at $69/person for happy hour alone, you could potentially be adding an extra $7,000/week for a $150 investment!
2. Fridays Are For The (Birthday) Girls
Bars, restaurants, and other entertainment venues have long sought to book groups for birthday parties. And often the choice is so overwhelming for people, it makes it quite difficult to choose since every venue is offering the same thing.
So why not erase the entire process of having to choose a venue and creating a rite of passage instead? We’ve celebrated birthdays in Chicago, LA, Miami, and Vegas and no one has captured the market for innovative birthday celebrations much less during happy hour. By creating something that every woman (your target market) turning 25 or 30 has to experience, you differentiate yourself and create a new market for birthdays, without changing a thing about your business.
So how can you apply this to happy hour? Well there’s a variety of ways:
- Find someone in-house with a creative mind to be the “Birthday Ambassador”
- Start with a few surprise birthdays thrown for friends, family, or staff and get it out on social media.
- Build the appropriate systems that are fitting to your venue. For example: You run a fine dining establishment or nightclubs:Rose bottles carried out on a giant wooden ship to wish you good luck on your voyage into your 30s
- Know Your Brand. Are you a classier establishment? Leave the beer bong at home.
- Plan for the unexpected. What to do if there’s multiple birthdays? How do you equally divide the attention? Make sure you have systems in place to navigate this and other minor hiccups.
- Figure out price point for target market, make pay as simple as possible: $20/person,$50/person, etc.
6. Having someone with a creative touch is important so you do not recycle the same ideas. Market it as a surprise party that friends work on with the planner.
- This, in theory, sounds much easier than in execution. Attempting to differentiate your business without understanding the strategy and psychology behind each step could backfire. Make sure you do some market research by asking your patrons for some ideas and map out your entire process to be reviewed before spending even $1.
3. The Hermit Crab 500 – Think Differently
One of our favorite happy hours was at a legendary bar in Champaign, IL called Kam’s. I remember walking in and seeing 40 people huddled around a barrel shouting. Curious, I walked up and look down to see hermit crabs racing!
Now I’m not suggesting everyone start racing hermit crabs, but I am suggesting doing something to make yourself different instead of competing for the lowest happy hour deal. It’s a very short race to the bottom. So what can you do? Here’s some quick ideas:
- Choose a target market that may not normally come to your venue
- What do they like? Would it be something that would drive your current customers away?
- Let’s say you want to target fraternities and sororities at DePaul but you’re a dive bar that local union guys go to.
a. You could do co-ed giant beer pong, grab garbage cans and set it up every Friday with a rotating prize.
b. It would still be something your normal crowd would enjoy doing but now you’ve grown business by adding in a new target market.
c. By differentiating the business and owning it, you essentially create your own market on Fridays that is quite difficult to replicate.
Not only is happy hour such an important aspect in growing your overall revenue but it also accounts for nearly 60% of bars weekly revenue NATIONWIDE. Using these tips you can be sure to add a few thousand dollars a week, which can be re-invested to grow your happy hour, physical improvements, or even put towards that vacation that you deserve.