Restaurant Trade Area Research

8. October 2009

A Real Customer Frequency Program

Filed under: customer frequency, bouncebacks, Customer Base Size, frequency of usage — Rick Phillips @ 14:32

Recently, my daughter related to me how a national FF restaurant was doing a `bounceback’ (stuffed without mention into a drive-thru bag) `free combo’ promotion. It was either buy 4 more and the fifth one was free or buy 5 more and the 6th was free. You had until the end of the year (so about twice a month to get the freebee).

Now, while I applaud the effort - since the frequency of your CURRENT customer base is most important customer attribute in the `new normal’ of the Great Recession - it falls WAY short of real motivation or of doing what it seeks to do - which is to increase frequency or market share.

Why not?

Because it simply isn’t motivating. To the VAST majority of the customer base as it has too high a threshold for compliance. Additionally, it gives away food for free to those who probably don’t even need a motivation to use your restaurant - your weekly or more often user.

Indeed, the next level of usage - those that use your restaurant once every two to three weeks (which can be a large movable segment) - are generally those who do NOT use your brand most often - for whatever reason (perception of high cost, not as convenient, service issues) and are indeed - UNLIKELY to increase their usage pattern over 2 - 3 months - a long time - for the special deal. We don’t even need to mention the once a month user or less often user — which is the vast majority of the customers of your customer base.

So, what should have been done?

Well, first, if the FF chain really wanted to bring a discount on their combo’s to certain folks over the next 5 visits within a certain time frame — give it to them EACH VISIT. Meaning, the next 5 visits before the new year when you buy a combo it’s 20% off. Saving money EACH time - can address high cost perception problems - and be motivating EACH time.

But, even that is NOT what I would recommend - as the timeframe is too long and the purchase requirement too big. So, obviously, I’m suggesting fewer purchases in a smaller timeframe - at a targeted customer (which you determine by asking your customer ONE question at the time of purchase).

To find out which question - to which type of customer - you need my services. 678-467-8650; ask for Rick.

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