CHINA BAR SIGNATURE
China Bar Signature (CBS), an Asian Buffet Restaurant, was a resounding success and a benchmark for buffet restaurants in Australia. Located in a business park in the Southeastern suburbs of cosmopolitan Melbourne, CBS’s customers are mainly suburban families and couples. During lunchtime though, the diners mainly comprise of retirees and the workers from the business park.
China Bar Signature’s (CBS) weekend sessions were overcrowded, while weekday lunches and dinners were not performing at maximum capacity.
CBS’s profitability was not maximized as:
- Most costs are fixed;
- Seating capacity is fixed;
- Weekend lunches and most dinners were overcrowded, performing between 100% and 120% seating capacity;
- Weekday lunches were quiet, performing between only 10% and 30% seating capacity.
- Monday to Wednesday dinners had room for improvement, performing between 60% and 80% seating capacity.
A campaign selling “First Anniversary Promotional Voucher Booklets” (Campaign) that had many vouchers targeted at encouraging diners to visit CBS during the less crowded sessions, filling up the seats to maximize profitability. 2000 copies of the “First Anniversary Promotional Voucher Booklets” (Booklet) were printed and sold.
What is the “First Anniversary Promotional Voucher Booklet”?
The beautifully designed Booklets were sold at a set price of $250 each, and had the following vouchers, totaling approximately $450 value:
- 4 X Dinner Vouchers, usable Monday to Wednesday dinners;
- 6 X Lunch Vouchers, usable Monday to Friday lunches;
- 1 X Birthday Vouchers, usable Monday to Sunday;
- 6 X Beverage Vouchers, usable Monday to Sunday.
Other terms and conditions were applied to prevent abuse of the Booklets.
|THE AMAZING RESULT
CBS sold all 2000 Booklets, equivalent to $500,000 cash revenue, within 5 months.
|WHAT DID CBS GET OUT OF THIS CAMPAIGN?
Direct Cash Revenue
CBS gained additional Direct Cash Revenue of $500,000 within 5 months, for services in the future. The $500,000 cash revenue is additional income as CBS’s costs are fixed – extra revenue is extra profit. This almost meant a stronger cash flow for CBS.
Direct Revenue Increase
We have done a statistical report to compare CBS’s average revenue over a 3-month period during the Campaign, and the same 3-month period a year before the Campaign was run, and got the following results:
Average Revenue Increase 37.44%
Average Lunch Revenue Increase 29.82%
Average Dinner Revenue Increase 59.02%
*Calculations are based on “Revenue” minus “Revenue from Sale of Booklets”, plus “Discounted Revenue for Redemption of Vouchers” for the most accurate understanding of the increase in customer volume.
After the Campaign, the targeted lunch sessions were performing between 30% and 50% seating capacity, and the targeted dinner sessions were performing between 90% and 100% seating capacity.
New Customer Generation and High Customer Retention
As customers had already paid for 11 meals in advance, customers had committed to returning to CBS to dine in the future, resulting in high customer retention.
Because of the vouchers, many customers were actively bringing families and friends to dine at CBS to share the discounted meal costs.
The Email Marketing, Website Banner, and Word of Mouth advertising from CBS’s customers promoted the Campaign and CBS to many new customers. The strong brand identity that was integrated into the designs of the Booklets and its promotional material further strengthen the CBS brand as a classy and fun dining destination with excellent value.
All customers who bought the Booklets had to fill up a form. The form collected valuable information about the customers that contributed to CBS’s database of customers.
Return On Investment
Based on CBS’s total investment in the campaign (including production costs, advertising costs, wages for the salespeople, and additional food costs for the large influx of customers), and the Direct Cash Revenue from the Sale of the Booklets, we have computed CBS’s ROI on the Campaign is at 505.89%.
GXM’s Campaign successfully helped CBS get instant ramification in the form of $500,000 Direct Cash Revenue, High Customer Retention, New Customers, Brand Awareness, Database, and an incredible ROI of 505.89%. Furthermore, Average Revenue increased by 37.44%, Average Lunch Revenue increased by 29.82%, and Average Dinner Revenue increased by 59.02%.
Finally, through analysis of our methodological reports, we were able to deduce that the Campaign has successfully maximized CBS’s dinner revenue, but there was still space for improvement for CBS’s lunch revenue. The “Buy 2 Get the 3rd Free” Campaign was later executed to maximize lunch revenue and turned out to be an amazing success.