HuHot Customers Spend Big on Prepaid Meals
Pushing customers to spend more mid-meal is a delicate balance. But by selling prepaid meal passes, HuHot Mongolian Grill was able to increase that spending by 44 percent.
It did so with its Grill Pass program. HuHot got customers to dig deeper by integrating prepaid meals into the point-of-sale system for easy sale and usage. Monica Minford, senior director of digital at HuHot, said the idea actually started when she and her team were brainstorming new payment methods.
“To be honest, what we really wanted to do was set up a subscription but we hit a lot of technological barriers. So we looked at companies like Olive Garden that did the Pasta Pass and Smashburger that did something similar and thought we’d try that out,” said Minford.
So she worked with Paytronix, which provided the loyalty solution to get the pass rolled out. In the end, customers were able to purchase five, 11 or 25 grill meals for $50, $100 or $200 respectively. Ranging from about $12 to $15 normally, the value was there, and Minford said she was surprised by the response.
“The response has been really great. Were a little worried that we had the three price points and we know from previous sales the $200 one is a hard sell, but we found that people actually saw the value of it. So they were able to dig a little deeper,” said Minford.
She said the Grill Pass program has been going on for a few years now, but 2018 was a banner year for the program. Sales of the Grill Pass run through June, so the 2019 results aren’t in yet, but the program got a nod from Paytronix, which awarded HuHot with the 2019 Paytronix Loyalty Award for Marketing Innovation. And HuHot got some real business results, including $280,000 in incremental sales across the system.
Michelle Tempesta, head of marketing at Paytronix, said there are some good lessons to be learned from the Grill Pass program.
“I think there’s a few things. I think restaurants should focus efforts on a time of year when sales aren’t good. HuHot does the sale in June through the end of the year, so they pulled those in earlier in the year,” said Tempesta. “And I think the amount that you sell the prepaid items for has to be enough of a discount that people will buy multiple at the same time—the value has to be there. And it has to be simple, there can't be a lot of hoops to jump through to attain it.”
That last point is key for servers, too. Pitching a potentially $200 item can get uncomfortable fast. So Tempesta said there can’t be a bunch of extra training or arcane point of sale maneuvers.
“Otherwise they won’t talk about it or promote the use,” said Tempesta.
She said to keep the accountants and balance-sheet watchers at ease, it’s also important to discount the individual item, not just wipe it from the check.
As for the additional spending? Tempesta said she sees the bonus of a wealth effect, either the pass was a gift or a forgotten charge from months ago. When the core meal is free, why not get a few extra sides or another drink?
Minford said she’s eager to see where the 2019 results land at the end of June. This year’s program has a little tweak: only loyalty members can buy a pass. So she’s already seeing loyalty adoption ticking up, providing yet another benefit for loyalty customers who are already willing to spend a little up front for their meal.
She has some advice for doing a similar marketing program that take advantage of these new ideas about payment and the explosion of subscription commerce: get everyone involved.
“Get your POS provider and any tech partners working together with your marketing or finance teams to find the ideal solution. It is a promotion that touches a lot of departments so it’s important to get everyone on board in the beginning to make sure you’re all pulling in the same direction,” said Minford.