Sonic of Phoenix—MHR, the Phoenix-based arm of Sonic Drive-In franchisee Mason Harrison Ratliff Enterprises LLC, recently tested an offer through daily deal company Groupon that was aimed at driving traffic to the quick-service operator’s online ordering system.
While the franchisee did not release detailed test results, supervising partner RD Martin spoke with Nation’s Restaurant News and said the test was an overall success. As with all Groupon deals, the Sonic franchisee split some of the revenue generated by the sale of vouchers, but the details of the split have not been made public.
Martin said the test was used as a "great way to help encourage folks to get past those first-time jitters" sometimes associated with ordering online, especially for quick-service operators. Restaurant online ordering platforms have traditionally had the most success with pizza chains and other delivery-based brands.
Since last year, however, the Sonic franchisee has offered its guests the option to order meals online through SonicOnTheGo.com and its mobile version, SonicOnTheGo.mobi. In late February, the group offered a test Groupon offer, allowing users to purchase a $10 online voucher for $5 and a $15 voucher for $7 that could be redeemed by placing an online order with one of the participating Sonic locations.
Martin breaks down the process in this Q&A with NRN.
What happened to average checks during the test, and how did it impact operations?
In general, OLO Online Ordering [the franchisee’s online ordering vendor] check averages run about 100 percent to 150 percent larger than on-lot orders — without the typical speed-of-service demands associated with quick-service restaurants or the need to turn tables, or push a drive-thru.
Can you afford to acquire customers at a 50-percent or greater discount level?
The hardest part of getting customers to use online ordering is getting them to do it that first time [and] navigate a website instead of a dining room, or [drive-in] stalls in our case. It’s challenging to get customers to order in a non-traditional way. Once the initial account is set up, the convenience of using it that second time is really appreciated.
Consequently, we see the large discount as a great way to help encourage folks to get past those first-time jitters and give it a go. It is a numbers game: How many people can I communicate to that we offer online ordering, and how many people can I encourage to try online ordering so I can get them past that [process] the first time?
Additionally, using Groupon to promote [online ordering], we did receive a large portion of the discounted dollars back [through revenue sharing with Groupon].
Were there other considerations behind this Groupon online ordering test or the use of online ordering by your business, in general?
Something else businesses should consider: While the [online ordering] business is building, additional sales are not offset by proportional costs. Yes, we have the food and paper cost, but the online orders come into the restaurant in a very controlled way.
Unlike traditional on-lot promotions, we found it took no additional labor, no additional repair and maintenance, and no additional costs for equipment or other costs associated with on-lot sales. The only cost we incurred was the food and paper cost.
This last point cannot be emphasized enough when discussing the value of [online ordering] and is why we continuously run a $5 off your first online order of $10 or more [promotion]. The check average on the $5-off orders is in excess of $12 after the discount.
Does Sonic want to pursue online users, given the response to SonicOnTheGo.com, to date?
I cannot speak for Sonic Industries [operator-franchisor of the Sonic Drive-In chain and a division of Sonic Corp.] We hope one day Sonic Industries would consider a bigger initiative than the 30 Sonic of Phoenix—MHR stores in Phoenix.
I'm trying to talk the other two Sonic groups in Phoenix into trying this [online ordering]; that way we can get a [mobile] app. Instead of needing to go to SonicOnTheGo.mobi on your mobile device, you'll be able to get an app and access it that way. It would be more consumer-friendly.
There are 80 stores in all in this market, but I only have 30 of them.
Focusing on your world then, how does your group view online ordering as a business strategy?
We definitely see this as the wave of the future and will continue to ride it. Besides convenience for our customers, it offers a great way to market your business. You can personalize discounts, promotions and fundraisers with [online ordering], and this we have just begun to utilize. In addition to co-branding with OLO Online Ordering and Groupon, we have tied in our Facebook page. 'Like' us on Facebook and get a discount code for a free burger and tots when you order online.
When you think of Sonic, you think about people pulling into at-restaurant stalls and ordering or using the drive-thru. How do you handle people who order ahead and come by to pick up their food?
They typically pull into a stall and say, 'Hey I placed an online order,' and we bring it out. It really is just that simple.
Some operators and analysts are concerned that online ordering for quick-service operations has the potential to create problems, in that customers may order and then take longer than they expect to pick up their food and then complain about cold product or demand a fix. Have you found that to be a problem?
Since we can prepare an order quickly, we often wait until the pickup time to prepare it. If it is a bigger order, we start to prepare five minutes before pickup time.
The big issue is side orders because people expect them to be hot, and they do hold for a shorter time than a burger that is prepared and wrapped in a foil bag or wrap. We can usually accommodate the convenience/speed/quality if we wait until the customer arrives to make the side orders. In [quick service] we are usually pretty quick in general, so waiting as long as we can to prepare an online order is not too much of an issue, and it does not stress out our system or setup.
I will admit we sometimes make an order over, so it is hot, if a customer arrives past their pickup time.