Slightly geeky humor about food economics… we like that. This did get me thinking – are Girl Scout Cookies the ultimate LTO?
Consumers are primarily looking for three things in their bank – convenience, competitive rates, and low fees. As discussed in a recent Wall Street Journal article, online banks are winning customers over with their low fees and are making strides in becoming more convenient and offering attractive interest rates. Traditional banks should be worried.
The main appeal of online banks has historically been their customer-friendly fee structure. Most have no monthly fees, pay ATM fees for customers, and have low or no overdraft fees. As a result, many were enticed to switch to online banks and “could trim hundreds of dollars a year in fees.” (more…)
… are “mixing” and “redemption”. Well, at least from the standpoint of someone focused on increasing profits. Let’s take them one at a time:
Mixing, as in “our new item is so great it was mixing 5% within two weeks!” Umm, great, you are selling a lot. What happened to profits? To margin rates? Did you get incremental guests? What halo did you see in rest of check? What got cannibalized? I’m thinking of developing a 10 cent double cheeseburger — boy, that’ll mix well!
Redemption, as in “we got 30% redemption on our Facebook coupon!” It was distressing to hear folks from major social media platforms brag that “redemption rates on social media are orders of magnitude better than print couponing — 30% instead of 1%”. Redemption ≠ incremental sales. McDonald’s could hand a coupon for Free Fries to each customer walking in to the store at lunch. Redemption would be through the roof, but was it really incremental?
Deep understanding of incrementality is difficult in the restaurant business. Even consultants, agencies, vendors, and restaurant companies that purport to “prove” incrementality seldom get the analysis right. So I can understand why marketers turn back to these scary words… but that doesn’t mean mixing and redemption lead to actual profit.
Ten years ago, a former colleague, then at Stanford Business School, wrote a business plan for a restaurant concept: essentially “the Starbucks of Tea”. At the time, Starbucks had purchased Tazo. High end consumer brands like Numi were just emerging. She never actually followed through building the first store, but I’ve always wondered whether she was onto a great idea.
Fast forward 10 years, there’s been talk at Restaurant Leadership about whether it is time for tea. Makes us think someone ought to be out there running a test.
Blogging from the Restaurant Leadership Conference in Scottsdale:
The breakout session led by Technomics was based on changes in their Top 100 Restaurants list over the past 10 years. Based on who moved in and out of the list, they drew some more general conclusions.
One chain that fell out of the list was TCBY, prompting the question: Is yogurt a concept or just a menu item? That is, can I actually get consumers to seek out my restaurant for this product alone, or do I have to do more? TCBY actually chose to do more, e.g., ice cream, and it hasn’t worked out well.
What struck me is that yogurt is currently booming in San Francisco — but with the new Pinkberry-style offering. Yogurt is still a viable concept. What if TCBY had stayed focused on yogurt, but innovated in that space?
The Test & Learn Summit continued Tuesday, including the Food for Thought session focused on restaurant issues. One major discussion topic was around the “local option”, periods of time in the marketing calendar when QSRs’ market-level franchisee groups can choose localized promotions and media support.
Local option periods can provide a wealth of insight into which programs work and which don’t, if managed correctly. (more…)
“Tweet to Eat” is a neat little campaign from Subway, linking Twitter, TV spots, and celebrity sponsorship. A cool mix of media that we haven’t seen before, especially in conjunction with the likely PR bump from being a leader here.
We see a lot of companies, mostly retailers, analyzing “online-to-store” activity these days. Haven’t seen anyone really quantify the social media effect on real life sales yet, but the day is coming.
Stanford Business School’s Kleiner Perkins Caufield & Byers Professor of Electronic Business and Commerce,and Management Haim Mendelson gave the keynote at the APT Test & Learn Summit yesterday. Prof Mendelson spoke about Organizational IQ, a way to quantify how organizations handle information in decision making and relationships. He highlighted three points:
- Higher Organizational IQ predicts future profitability
- In faster “clock speed” (rate of change) industries, high Organizational IQ is more important
- In time of transition when “clock speed” is increasing, high Organizational IQ is yet more important
Which got me thinking: is the “clock speed” in the restaurant business increasing? (more…)
If you’re a visual pilot and you fly in the clouds, your life expectancy is about 180 seconds
A nice metaphor for trying to manage without testing and analytics in a modern business environment!