Restaurant Trade Area Research

Recently, I found this to be of great help to a particular client who uses my consulting. Indeed, I’d be happy to come to your market and fashion the same type of system for your FF unit too.

The first thing I’d like to do in this post - is the ranking of `customer purchaser types’. And, first and foremost, the #1 type of customer is the LARGE transaction customer - the one that spends over 150% more than the average transaction - (typically a three or more party size - but, we are NOT worried about the size of the party, only the transaction total). Now, the specific marketing opportunity you want to offer for ANY of the `customer types’ - are the customers who are NOT using any incentives (coupons or programs) for THIS purchase. IF they are already `bouncing back’ - that is just what we want to see or develop. Examples of the approach I suggest will be found in this post.

#2 Customer type - Full price, big sandwich, combo. Yes, of course, the vanishing bread and butter customer - vital to the bottom line of most FF’s.  — IF you are not using my `full’ method (of asking certain customers how often they use YOUR unit - or - how many days since last visit) and lack knowledge of this customers frequency — it is vital to `market’ the idea of the `3 visit’ combo club (my suggestion to have an actual effective campaign for these folks is 3 visits).

#3 Customer type - Full price, multi-product purchaser. These are the folks who don’t get a drink - or skip the fries - or are buying for multiple people but not going the combo route. The marketing strategy for these parties is to `target the product not purchased’. For example, you have an order for two sandwiches and two fries - no drink — for that order, the bounceback is a coupon for a greatly discounted drink on the next purchase (or a discounted dessert or side if those are what’s missing).

#4 Customer Type - Full price, single product purchase only. To these customers - offer either a straight (say 10%) small discount on next purchase - or a `real value’ combo coupon (beyond normal pricing). These types of customers often fit into the various `clubs’ I have talked about in the past as yet another marketing opportunity - ie: - `drink club’ `dessert club’ etc.

#5 Customer Type - Value price (ie:dollar menus, etc), multi-product purchases. Market with significant combo coupon (to trade out of the lower priced items) or `frequency club’ targeting with VERY SMALL reward.

#6 Customer Type - Value price - single product. Again, market with significant combo coupon, or, specific discounted full price item, and GREAT service.

Now, the above is just ONE of my many ideas of how to market to your real existing customer base. And, obviously, is not with details that I’d fill you in with if you were a client.

Another of my favorites is the occasional - cross promotion - such as promoting a weekend coupon to your evening weekday customers - who share the same Trade Area often.

Find out more about my services at 678-467-8650 (cell) -> leave a message if you do not reach me directly and I will call you back.

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.

Hello, welcome to Restaurant Trade Area Research (RTAR) - today’s topic is the `light’ user. NO, I’m not talking about the infrequent user this time - I’m talking about the customer who purchases `just’ one item. This typically will be the `sandwich and water’ purchaser, the `drink only’ purchaser or the `dessert only’ purchaser. And, in this economic environment - many are forced to `price down’ to even go to FF restaurants.

So, what are you to do as a FF operator to `bump up’ these folks? Actually, this is a real easy group to directly market. After all, you already know their order - so, let’s say that you have your typical inside customer who is a `sandwich and water’ person: to that person goes a bounceback 49 cent drink offer with sandwich purchase. And, for the drink only purchaser - yep - 1.50 off their next combo or similar offer (1.00 off order over 4.00). The dessert purchaser - a buy one dessert get one at half off. You get the idea.

So, simple marketing 101 - directly work with your actual customer base - and - directly target segments to produce higher ticket totals. Also, having that coupon burning in their pocket may even make that next visit sooner.

Other links:

Customers given too many choices are 10x less likely to buy

http://sivers.org/jam Very insightful research into purchase patterns.

http://www.idsgn.org/posts/pizza-the-hut/ Pizza Hut — The Hut - does a re-design of image.