Outback Steakhouse has made a move that will dominate restaurant marketing news this week, and possibly far into the future. Their most recent promotional campaign has cost the company quite a bit, but the results may catapult the chain ahead of their competition in both the steakhouse genre and the entire casual dining segment of the restaurant industry. The campaign making all the buzz is known as “The Great Aussie Steak Out”. The chain gave away one million free steak dinners, and all you had to do to snag one was to hand over your email address, phone number and a few personal details.
The release of information about the promotion was carefully controlled to build maximum interest and excitement. The first teaser went out in the form of a tweet on Monday. It simply hinted at the release of a big secret in the near future. Tuesday saw hints and teasers posted on the company’s Facebook page, including a video that gave everyone the first idea about when the secret might be revealed. The video featured a giant steer and the date of August 24th. The chain also invited excited fans to text a specific number so they could receive an update exactly when the secret was revealed.
Finally, on Wednesday, August 24th, Outback published a press release outlining their plans for that evening. At 9:01 pm, on national and local television stations across the country, a commercial aired explaining that “The Great Aussie Steak Out” had begun, and that guests could pick up their coupon for a free six ounce steak dinner at www.thegreataussiesteakout.com. The traffic was so great within the first few minutes after the commercial aired that the website went down temporarily. When it returned, fans resumed their frenzied attempts to sign up for the promotion.
The certificates are redeemable at 777 restaurants that are participating in the promotion. Guests could only receive one coupon, and they had to have an address that was within 25 miles of a participating location. The giveaway will end at midnight on Friday, August 26th, or when all of the one million dinners have been claimed, and limited the promotion to one entry per. Guests will receive a six ounce Outback Special Sirloin Steak and their choice of one side when using the discount. It’s only redeemable during normal hours between Monday and Friday.
This may sound like a great way to bring in unprecedented amounts of traffic, but what about the costs? The most obvious cost comes in the form of revenue lost on one million steak dinners. Giving away a steak, even a six ounce sirloin, comes at a steep price as meat costs continue to rise. Many steakhouses and other restaurants are struggling to break even with paying customers covering the costs of meat. Each guest has an opportunity to eat their dinner without ordering any other items, which means each restaurant loses money on labor to serve them, cook the food and wash the dishes. Each diner with a coupon for a free dinner takes up a seat that a paying diner could fill. The web hosting, commercial production and logistics of giving away one million coupons didn’t come cheap either.
On the surface it may seem that Outback Steakhouse is losing more than it could possibly gain. However, consider the value of up to one million email addresses, physical mailing addresses or cell phone numbers. A list of a million interested potential customers who now have a favorable view of the brand because they received a free dinner. Companies pay high fees for contact information on customers who may not even be interested in their brand or what they’re selling. In one large move Outback has efficiently built a massive marketing list. Now the chain knows who to email or text when they want to fill restaurant seats again with another enticing promotion. Each visitor, paid or free, is also an opportunity for positive reviews on social networks like Facebook or review websites like Yelp.
Marketing lists directly translate into income for a company if the marketing and promotional team know how to use them. If Outback wants to recoup what they’ve spent on “The Great Aussie Steak Out”, they’ll need to find a way to turn at least a small percentage of the free diners into paying diners. Drinks, including soft drinks, aren’t included with the meal. This means most people redeeming their coupons will at least add a drink to their order. The portion is small, so an additional side dish or dessert is more likely as well. The real profits will only come if diners return again without a coupon. While other socially driven deal websites like Groupon report great success at encouraging second full-price trips, other restaurant owners and industry analysts often disagree that this is common. Many restaurants avoid giving deep discounts or free meals away as promotion because they feel that deal-seekers won’t return to spend money later.
The main reason for the giveaway was to highlight and introduce the new wood-fired grills being added to Outback Steakhouse locations. The wood burning appliances give steaks a smoky flavor and special surface sear that gas and electric grills can’t match. All of the steaks given away as part of the promotion will have the option for being cooked on the new grills. Outback’s kitchens will retain their other signature grills, and guests will have the option of which cooking method they prefer.
“The introduction of our new wood-fire grill, in addition to our classic seasoned and seared cooking method provides our customers with more choice in how they’d like their steaks prepared,” said Jeff Smith, Outback Steakhouse president. “Additionally the wood-fire grill gives us a big platform to innovate new and exciting products.”
The promotion was also to highlight new menu additions. These other options include the Aussie Chicken Cobb Salad, the Mediterranean Chicken Flatbread Aussie-Tizer and the Hearts of Gold Mahi.