Why Applebee's $200 'date night' pass may not be such a bargain after all

By Charles Passy

Companies can hook customers with pass programs and other deals, but caveats and conditions often apply

C'mon America, do you love Applebee's that much?

I'm referring, of course, to the recent promotion offered by the restaurant chain in which diners could purchase a $200 pass that entitled to them 52 "date night" meals over the course of a year - essentially, one per week if you parsed them out that way. The pass came with a big caveat: It's good for only $30 of food and non-alcoholic beverages per visit, with the customer responsible for any spending beyond that. Still, if you do the math, there's a potential savings of more than $1,000.

Lots of folks must have gotten out their calculators and decided it was too sweet a deal to ignore: Applebee's (DIN) said it sold out of its initial allotment of passes in a minute - the company didn't specify how many were available - so it opted to offer 1,000 more via a lottery. Those are now gone, too.

Applebee's is far from the only company to seize upon the pass idea. Virgin Voyages, the cruise line that's part of Richard Branson's Virgin Group, recently rolled out a summer-season pass that lets you sail the seas aboard back-to-back trips for a month. The price tag is $9,990 for two people, but that still reportedly represents a 30% savings over booking individual cruises. And, hey, it comes with a $10 daily specialty-coffee credit.

Plenty of airlines have pass programs as well. And let's not forget the fervor that's ensued whenever Olive Garden (DRI) rolls out its Never Ending Pasta Pass promotion.

Still, I harken back to my original question: How much Applebee's is enough?

I say this not to play the role of food snob, though I can't say the basic wings-and-burgers fare at Applebee's especially entices me. But with few exceptions - and I'll get to one later - I can't think of any restaurant that merits a weekly visit.

For that matter, how much of anything is enough? I'm set to take my first-ever weeklong cruise later this year and I'm certainly looking forward to being on the water for a nice stretch of time. But the idea of a month of back-to-back cruises? As they say in some parts of New York: Fuhgettaboutit.

So, what's going on here? I suspect plenty of people approach these pass deals with a certain eyes-too-big-for-their-stomach mindset, literally or figuratively, and they think of the money they'll save in the process. But they never quite take into account that they may tire of the promotion along the way or that the "deal" isn't all that it's cracked up to be.

To wit: I'm sure $30 can buy two people a decent meal at Applebee's, but it's easy to spend above that amount. And if you want a cocktail, a glass of wine or a beer with your food, you're outside the boundaries of the pass promotion in any case.

All of which is built into the corporate strategy behind these pass programs, marketing and financial experts say.

Think of it a bit like the way gyms work, said Joe Camberato, chief executive of the fintech lending platform NationalBusinessCapital.com: They get lots of people to sign on for memberships, but "if every member went to the gym on a daily basis, the gym would be overcrowded."

Even if pass holders maximize the deal throughout the promotion period, the company may still come out ahead. As mentioned, the caveats are such with some of these programs that you can easily spend beyond the promotional value.

And if you don't, the company is still potentially winning your loyalty beyond the pass timeframe - if you've become accustomed to eating regularly at Applebee's for a year, why stop there? - and turning you into a living billboard for its product.

Plus, the company is learning a lot about what people like along the way. As Megan Hastings, head of customer insight strategy at the digital analytics platform Quantum Metric, explained: "Applebee's is gathering insights into dining preferences of some of their most loyal customers." In turn, that can shape the company's marketing efforts and drive more sales, she added.

Let's not forget the PR value, either. How many articles did I read about the Applebee's promo? Short answer: lots. (And am I not writing an article now myself?)

If that starts to make companies that provide these passes a little crafty, perhaps that's just the good ol' American capitalist way. For its part, Appleebee's stands behind its promotion as a solid deal.

"Applebee's is all about delivering great food at great value for our guests, meaning that the Date Night Pass can go a long way," a company spokesperson said.

You also can't discount the fact people genuinely like these offerings. As North Dakota resident Emily Brooks, one of the lucky folks to snag the Applebee's pass, recently told The Wall Street Journal: "This year is going to be a lot of Applebee's."

Which brings me to my own recent restaurant escapade and how I, too, fell under the spell of the promotional powers that be.

I've started having the occasional breakfast at a new bagel shop that opened in my neighborhood. On my last visit, I saw they were selling T-shirts for $25 that came with an enticing bonus: If you wear the shirt on future visits, you get a 10% discount on your order.

I've done the math: If I spend $250 on bagels, the T-shirt pays for itself. And the rest is gravy - or cream cheese, to be more precise.

Needless to say, this year is going to be a lot of bagels. Meanwhile, the shop will benefit from my promoting its brand on my back, literally. To say nothing of the fact I'll probably spend more at the shop than I would have otherwise.

Do I like those bagels that much? Honestly, there are better ones to be had at a shop a couple of blocks away. But that's proof of the marketing power: Sometimes a deal is just too tempting, so logic be damned.

Now I wonder if should rethink that Applebee's pass if it's offered again. Those wings are pretty tasty, after all.

-Charles Passy

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04-04-24 1521ET

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