Sponsored by Vericast
Pulled between the desire to believe the pandemic has finally ended and anxiety about mounting economic tensions, many consumers seem to be revising their budgets and reining in their discretionary spending. To bring them into restaurants—and back for more—operators will need to understand price-conscious consumers’ top priorities.
“To steal share from competitors, restaurants must attract new and light users–it’s really about customer acquisition,” says Rob Crews, restaurant strategy director for Vericast. “Everyone is doing a good job of driving frequency, but they’re not driving customer acquisition.”
To continue to drive frequency and acquisition, operators need to better understand today’s consumers’ top priorities:
No. 1: Dollar-stretching deals
In an uncertain economy, a good deal can trigger someone to eat out (and where) instead of staying at home. Coupons and discounts have the power to prompt consumers to make repeat visits and increase the frequency of those visits—plus positively impact the average order size, offsetting consumers’ urge to order fewer items to offset higher-than-normal prices.
According to a report from Vericast, 61% of consumers surveyed say a coupon, discount or promotion is influential in the decision about which restaurant to order from, and 54% say they will spend more at a restaurant when they have a coupon.
As a result, many quick-service and fast-casual brands are getting creative with incentives that focus not only on dollar-stretching discounts but also delivering more value. Take Taco Bell, for example, which kicked off 2022 with its value-centric Lover’s Pass, a taco subscription service that allows customers to receive one of seven of the brand’s tacos each day for 30 days for just $10. Meanwhile, Chili’s is offering new happy hour pricing on food and drinks during televised college and NFL football games throughout the season. The promotion includes nine new flavors of wings, deals on beers, a Chili Philly sandwich, and Chili’s Ranch Water.
While deep discounts once meant consumers would take advantage of an offer and move on to the next, these days the right deal can pay off in loyalty. Vericast’s Restaurant Report, for example, indicates that 45% of consumers report positive feelings for brands offering coupons and discounts.
Of course, not all consumers are motivated by such deals. Households with incomes of $150K or greater continue to be less price-sensitive than their lower-income counterparts. These consumers are less likely to be adjusting their dining-out budgets, and so restaurants are likely to have success attracting them with more tangible benefits—think innovative products and insider secret menus—rather than discounts.
No. 2: Convenient options that facilitate last-minute dinner decisions
Answering the daily question ‘What’s for dinner?’ often means that visiting a restaurant or ordering take-out is often an in-the-moment decision. Whether due to being busy or just not feeling like cooking, nearly half of all consumers decide on the same day to eat out, recent research reveals.
To appeal to consumers’ spontaneous needs, operators will need to be at-the-ready to serve up a seamless and convenient experience. One way some major chain operators are doing that is by reducing friction for their consumers—and their franchisees—through continued investments in technology. For example, by continuing to invest in its digital-ordering technologies, Darden Restaurants, the parent of casual-dining chains Olive Garden, Longhorn Steakhouse, and Cheddar’s, has seen to-go sales increase to levels similar to that of dine-in sales.
“Our technology investments have created an infrastructure that reduces friction for our guests and our operators,” Rick Cardenas, Darden’s CEO and president said in a recent earnings call.
No. 3: Meet consumers where they are
Once creative deals and convenience are set, operators need to consider what channels consumers are getting information from and meet them there. By understanding what platforms and media their consumers are active on, restaurants can make better decisions about marketing tactics and advertising spend and customize their messages to the consumers.
More restaurants have mobile apps these days, but research shows there’s no single way consumers want to receive information—or their restaurant deals. According to the January 2022 Prosper Insights & Analytics MBI Study, 35% of dining out purchase influence is driven by digital media, while 30% of purchase influence is driven by print media. And don’t forget the seemingly old-school television and radio, which drive 10% and 9% of dining out purchase influence, respectively.
Among operators driving sales with a multi-channel approach is Paul Urbina, a Papa John’s franchisee owner in California. When the pandemic started Urbina considered pulling back on, and even canceling, his location’s advertising campaigns. Instead, he launched a targeted campaign promoting the store’s large/extra-large pizza offer and then delivered it via both direct mail and mobile. The result was high consumer engagement and best of all, a better-than-industry 14.3% year-over-year sales lift.
The pandemic recovery and the economy may remain uncertain, but what consumers want from restaurants is clear: value deals and convenience solutions delivered directly to them via their preferred platforms. In this environment, operators who can deliver on these priorities will stand out from the competition.
Ready to learn more ways to amplify your restaurant’s marketing? Contact the data, media, and technology experts at Vericast to get started.