Actionable Insights From APT's Retail Practice

Ideas That Will Shape Restaurant Performance in 2011 (Part Three): Marketing

January 31st, 2011 | Posted by retailblogadmin in Marketing & Media

This post is the third in a three part series on ideas that will shape restaurant performance in 2011.

Part Three: Marketing

Refining Customer Loyalty Program Strategy

A customer loyalty program no longer means a 10-hole punch card.  Casual Dining and QSRs alike are using loyalty programs to better understand their customers, and to offer custom rewards that keep them coming back. MyPanera launched nationwide in 2010, offering members rewards from unexpected treats and preview tastings of new items.  TGI Friday’s “Give Me More Stripes”  program offers customers stripes for dollars spent, which can be redeemed for their favorite menu items.  As customers increasingly expect to be rewarded for their dining choices, look forward to more creative ideas in the coming year. These programs aren’t cheap, so while the most savvy data-driven restaurant chains will benefit, expect to see some expensive failure along the way.

Make Social Media Make Money

Several high profile social media campaigns have made the news in the restaurant world, including Applebee’s Veteran’s Day campaign, Chili’s FourSquare chips & salsa promo, and Starbucks and Chipotle on Facebook Deals.  Both McDonald’s and Dunkin’ have recently leveraged Foursquare and Twitter, respectively, to promote new products.

As these offers become more mainstream among major restaurant chains, the way restaurants invest in and measure social media will need to “grow up”.  As we recently discussed, we see this happening soon.

With its reach increasing, and techniques for measuring incremental dollars available (Test & Learn), Social Media is positioned to become a bigger player in 2011. Addressing this issue is not only important for marketers, but for social media sites themselves, as they seek to justify high-flying valuations (during its most recent financing round, Goldman Sachs valued each of Facebook’s users at more than $100 a pop – almost three times higher than similar benchmarks set before the recession).

Embrace Calorie Count Posting

California recently joined New York in requiring restaurant chains to post calories on the menu.   Current proposals in front of the FDA will require all chains with 20+ locations to display calorie information in the near future. Recent polling indicates that 70% of consumers have indicated a preference for greater transparency regarding the nutritional content of food purchased at restaurants.

With all restaurants in the game together, the best way to win is to embrace the change and start early. Panera has taken the pole in testing the impact of calorie count posting. Starbucks new year menu boards are emphasizing “skinny”.  Restaurants that test out changes in advance, including new product formulations, portion sizing, new items, and menu board displays, will be well-positioned to steal market share when the law takes effect more broadly across the United States.

As data begins to stream in on the effectiveness (or in some cases, purported ineffectiveness) of menu labeling on consumer choice, the public policy debate over obesity will no doubt continue to evolve, impacting restaurants, grocers, big box stores, and other retailers expanding their food service offerings. While the press has been quick to sensationalize the findings of recent studies, researchers agree that  far more data, and testing of various labeling methods, is needed before drawing insightful and actionable conclusions.

Return to Part One: Menus, Value Meals, & New Offerings

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