Gauging Engagement | by Christopher Wolf
Nothing says business building these days like menu building. While there have been a number of chains that tried discounting strategies to fight the economic slump earlier this year, we learned that money-saving deals and incentives did less to steal customers than it did to steal profits.
In contrast there are other chains that focused not on price but on new product-based campaigns to keep business growing. “New products are the equivalent of our daily specials,” says Brad Haley, executive vice president of marketing for Hardee’s and Carl’s Jr. “Given the logistical demands of sourcing products, training, etc., we can’t literally offer daily specials, but it serves the same purpose [of increasing] frequency to a restaurant.”
A Sample in Every Mouth: One of the most popular ways to introduce new menu items remains sampling, despite this year’s nonstop supply of free offers (think: doughnuts, coffee and pastries, grilled chicken, subs, and burgers).
“Sampling is fantastic when you’re launching your brand in a new category where you don’t have a lot of credibility,” says Cynthia Ashworth, vice president of consumer engagement for Dunkin’ Donuts.
Similarly, Danya Proud, senior manager of media relations for McDonald’s, told me that the McCafé line is not so much a new product introduction as it is a “whole new business.” Part of the rationale for the company’s recent beverage investment, she says, is to reach “people who haven’t been visiting us. For our involvement with New York Fashion Week, we sampled 20,000 cups of hot and iced mochas to all the tastemakers in an arena we haven’t played in before.”
Similarly, Terri Snyder, chief marketing officer for Checkers, says that sampling was a big part of Checkers’ launch of Classic Wings this year. “We did do a freebie, but it was part of a broader strategy,” she says. “You have to have a high-quality product so that trial produces repeat visits. Our trial got immediate repeats. And eight months later, the hit rate is about what it was at introduction.”
But Bob Phibbs, retail consultant and author of Double Sales Without Discounting, doesn’t agree that all these free samples are wise: “Is that really what marketing is? Anybody can get anyone to come in the door with stuff for free, but are you just attracting the bottom feeders or real customers?”
“Value” via Innovation: Discounting has been a primary marketing tactic used to communicate value for many years, but Snyder says that discounting isn’t the solution. “Three years ago, you worried about value in January and September, but today value is a 52-week promotion. But discounting is largely undifferentiated,” she says. “We launched wings—high-priced and indulgent—at the height of the value wars. They’ve been hugely successful.”
Dunkin’ Donuts appealed to people’s wallets this summer when it launched a campaign around its new value-priced breakfast items called “Breakfast, not Brokefast.” The favorable price point, combined with guerrilla marketing stunts where street musicians encouraged people to spend potential tip money at Dunkin’ Donuts, “got great press,” Ashworth says.
Consumer Creations: Increasingly, companies are giving consumers a shot at co-creating products and campaigns. Dunkin’ Donuts kicked off the March re-launch of its doughnut business with an opportunity for consumers to submit creations for its next doughnut. Out of 130,000 ideas, Dunkin’ announced the winner on National Donut Day and premiered the product in stores for customers to sample.
Likewise, CKE Restaurants invited consumers about a year ago to submit headline copy for its new Little Thickburger, the results of which were used to create six TV ads and numerous Web-based ads. More recently, consumers were asked to help Hardee’s find a name for its new Biscuit Holes, even though the company had already settled on an option, Haley says. The entertaining results were posted online at www.nameourholes.com to help build buzz for the product.
Feeding Word of Mouth: Speaking of buzz, marketers are still discovering the promotional potential of social media like Facebook, YouTube, Twitter, Flickr, and iPhone apps. Haley told me that CKE contracted with YouTube “all-stars” (i.e., members who have an especially large following for their video posts) to develop videos for the chain’s new Portobello Mushroom Burger, generating about 10 million views.
He also points out that CKE was a leader in launching popular restaurant-based iPhone apps earlier this year, including an iBurger virtual eating app, and a “Le Hardee’s Parisian Pick Up” app that helps customers hit on French maids (likely those who he says the company hired to drive around college campuses and sporting events on Segways to promote the new French Dip Burger).
Dunkin’ Donuts also “put a greater focus on ‘buzz’ and trying to get more consumers talking about some of our marketing,” Ashworth says. “Twitter is one of the first places where we get the word out on product or promotional things. It’s a great way to let our enthusiastic fans know about our new products. It doesn’t have the scale of national television; it kind of has an interesting mixture of marketing, customer service, and public relations.”
As Long As You’re Here: While every marketer I spoke with agrees that traditional media vehicles continue to be essential to draw consumers to stores, one should never forget the power of engaging customers who have already walked into the store.
Snyder was one of several who emphasized “the power of communicating with your current customer base ‘on lot.’” Checkers, she says, executed a tremendous on-site push during the company’s wing promotion, producing a 50 to 60 percent higher hit rate than markets that didn’t.
Haley says Hardee’s and Carl’s Jr. have no permanent value menu and do not advertise discounted prices to the general public, but the companies do have a handful of existing menu items that are offered at a reduced price point at the store. Only premium offerings are promoted on air.
So it appears that discounts and free samples haven’t completely fallen off the marketing radar yet. But smart marketers are using these tactics strategically as part of larger programs aimed at building profits and followings for products well after the recession recedes.