Happy Hour Done Right: Value for Customers, Profits for You
What is Happy Hour, and Why Do Restaurants Do It?
In case you don’t know, a happy hour is a popular promotional period in restaurants and bars, offering discounted food and drinks during slower times of the day—typically in the late afternoon or early evening (around 4:00 pm to 6:00 pm). It’s a strategy to increase customer traffic and sales during traditionally quieter hours, helping businesses capitalize on slower periods and boost revenue.
But why do restaurants and bars embrace this practice? There are several key reasons:
Increase Sales: Offering discounts on drinks or appetizers can drive more customers in, even during off-peak times. With higher volumes of customers, the resulting increased sales can significantly outweigh the discounts offered.
Attract New Customers: Happy Hour can draw in new patrons who might not otherwise visit. Once inside, many customers may return—even when the discounts aren't available, turning a one-time visit into a regular habit.
Boost Customer Loyalty: When regulars know they can enjoy great deals, they’ll come back consistently. Happy Hour is a great tool for building a loyal customer base that frequents your bar or restaurant more often.
Clear Out Inventory: Discounting food and drinks during Happy Hour can help move inventory that may be near its expiration date or isn't selling as quickly as you’d like.
Implementing a Happy Hour Menu
While the concept of Happy Hour is simple, creating an effective strategy requires careful thought and planning. Here’s how you can maximize its profitability:
Smart Pricing Strategies—Discounts with a Purpose
Rather than just slashing prices, make sure your Happy Hour is designed to protect your margins while attracting more customers. Here are a few smart pricing strategies:
Tiered Discounts: Offer discounts on high-margin items, like cocktails or premium spirits, but structure the discounts in a way that protects your profits. For instance, you could offer $2 off cocktails rather than half-price drinks on everything.
Bundle Deals: Consider offering drink and food pairings for a fixed price (e.g., a $10 Old Fashioned + fries combo). This ensures that your customers are spending more while still feeling like they're getting a good deal.
Upselling Tactics: Train your staff to suggest premium versions of drinks. For example, suggest a premium tequila in a margarita for just a couple of extra dollars. This small increase can significantly boost your overall sales.
Overstock Items: If you have surplus stock of a particular spirit, feature it in a Happy Hour cocktail to move inventory.
With Spec’s free software, you can build a Happy Hour menu that uses custom pricing and helps you figure out the most profitable combinations. Spec allows you to:
Cost Out Any Recipe: Calculate the costs for everything from food to drinks. Keep your ingredient prices current with automatic price updates.
Flexible Menu Building: Combine menu items, set custom pricing, and determine net profit in one streamlined tool.
Staff Training: Use the mobile app to train staff on tasting notes and product knowledge, so they can upsell with confidence.
Signing up for a Spec account is quick, easy, and free!
Highlight High-Profit Items
Focus on promoting items with the best margins, such as:
Draft Beer: Determine your most profitable taps and provide a few bucks off. Identify stagnant beers and offer discounted pricing.
House Wines: House wines tend to have better profit margins than other slots in your wine menu. Consider discounting glasses of your house wine by a few dollars.
Draft Cocktails: These drinks tend to have better profit margins compared to individually crafted cocktails, and are easier to prepare.
Shots: While heavily dependent on the kind of guests showing up to your happy hour, shots might be the perfect high-margin item to offer for your happy hour.
Sides: The guests who come to your happy hour may not be wanting a full entree, especially if they are stopping in right after work but before dinner. Consider discounting high-margin sides alongside your drink offerings.
Timing It Right
Happy Hour isn’t just about offering discounts—it’s also about being strategic with your timing. Consider the following:
Know Your Audience: For example, corporate workers may prefer a 4-6 PM time slot, while a younger demographic might be more inclined to attend a late-night Happy Hour (9-11 PM).
Midweek Focus: Many restaurants and bars struggle with traffic on Mondays through Wednesdays, so offering Happy Hour during these days can be particularly effective.
Split Happy Hours: If you serve different crowds, you might benefit from offering two Happy Hour windows, one for the after-work crowd and one for late-night socializers.
Boost Foot Traffic with Themed Promotions
Make your Happy Hour stand out with creative, themed promotions:
Industry Nights: Offer discounted drinks for hospitality workers on slower nights. This gives your staff an opportunity to make new connections by drawing in customers from the local industry.
Themed Happy Hours: While not the most original idea, themed promotions can still be effective. Consider these tried-and-true options:
Tropical Tuesdays: Offer discounts on popular tropical drinks like Mai Tais and Daiquiris.
Whiskey Wednesdays: $2 off Old Fashioneds and 1/2 off pours of your well whiskey.
Frozen Fridays: Offer a discount on frozen, blended drinks during the summer months.
Get Creative: Guests appreciate a novel take on themed happy hours. Determine what will strike a cord with your audience and entice them to visit.
Leverage Data for Continuous Improvement
Tracking sales and customer preferences is crucial for refining your Happy Hour strategy:
Track What Sells Best: Use POS reports and Spec’s menu analytics to monitor which Happy Hour items are driving the most sales and profits.
Adjust Based on Trends: If a specific drink or food item becomes popular, consider tweaking your pricing or promotional approach to maximize sales.
Compare to Non-Happy Hour Traffic: Evaluate whether your Happy Hour is actually increasing overall sales. If not, it may be time to rethink the strategy.
Stay Relevant in a Competitive Market: Many bars and restaurants now offer Happy Hour, so it’s important to keep an eye on what other spots in your area are doing. Differentiating your offerings will help you stand out from the crowd.
Happy Hour Shouldn't Just Be Cheap—It Should Be Strategic.
The best Happy Hours are about more than just offering discounts—they’re about driving profit while keeping customers coming back. By attracting new guests, increasing the average spend per table, and promoting high-margin items, Happy Hour can be a major profit driver.
To make your Happy Hour a success, start with data-driven decisions. Tools like Spec allow you to evaluate the net profit of every item on your menu—whether it's a cocktail and side combo or a batch cocktail. With the right strategy and the right tools, you can crush your Happy Hour and keep customers coming back for more.
Create your next happy hour menu using Spec.
By strategically planning your Happy Hour, using pricing tactics that protect your margins, and leveraging data to fine-tune your approach, you’ll create an offering that’s not just about cheap drinks—it’s about maximizing your restaurant’s or bar’s profitability. So, what are you waiting for? Start planning your next Happy Hour today!
