GREENWOOD VILLAGE Colo. Having successfully driven guest traffic earlier this quarter by testing local TV ads highlighting price discounts, Red Robin Gourmet Burgers Inc. said Monday it would further embrace that strategy for its spring 2010 limited-time-offer promotion.
An expanded TV marketing program reflects the continuation of a turnaround of sorts at Red Robin, which had dropped TV advertising completely during the first half of this year because of disappointing results from a run of cable spots in 2008.
Red Robin said that for the spring LTO campaign, which will debut in February, it will spend about $6.7 million for national cable TV buys and local TV advertising in certain corporate-store markets to promote two new menu items “at an attractive price.” TV ads will run for about half of the scheduled eight-week marketing push.
Executives at Red Robin, which operates or franchises more than 430 casual-dining restaurants in the U.S. and Canada, noted that additional marketing support for the spring LTOs will include digital media and in-restaurant promotional materials.
“The commitment to utilize television advertising for the spring 2010 LTO promotion reflects our confidence in the Red Robin brand, our marketing strategy to support innovative new product news and our belief that we can cost effectively capture market share and improve traffic trends by raising guest awareness and delivering on our message of value, variety and quality,” said Dennis Mullen, Red Robin's chairman and chief executive.
Red Robin said it will weigh the results of the spring promotion before deciding whether to use TV ads to support other LTOs next year.
The decision to renew its commitment to TV comes after some success with the chain’s fall LTO and its related marketing tests. Red Robin chief marketing officer Susan Lintonsmith detailed some traffic-driving highlights during the company’s latest quarterly conference call last month.
For Red Robin's fall offering of the Wise Guy Burger and Chicken Caprese Sandwich, she said the company invested $1.1 million for three weeks of local TV support in 10 markets that hold about 100 corporate restaurants. The local TV ads mentioned special pricing of $5.99 for the sandwiches, which were sold in other markets for between $7.99 and $9.79 before discounts of $3 offered in direct-mail campaigns.
For the four weeks prior to the local TV campaign, guest counts in the 10 test markets were down 11.4 percent versus the prior year. During the three weeks augmented by local television spots, guest counts improved by more than 1,200 basis points, or by 12 percentage points, “bringing our guest counts in these markets into positive territory,” Lintonsmith said.
She explained that year-to-year sales in the 10 markets had been negative, down 12.4 percent, prior to the local-TV test, but improved by more than 900 basis points, or 9 percentage points, during the run of TV ads mentioning the special price.
“Based on the results from the TV media to date, we believe the TV ads have paid for themselves,” Lintonsmith said in November, just three days shy of the promotion’s end.
She said the Wise Guy Burger and the Chicken Caprese Sandwich ranked among the top three sandwiches sold in markets supported by TV advertising. To capitalize on any new traffic resulting from TV ads, she said, the chain also incorporated a bounce-back program in TV markets that aimed to bring guests back by mid-December.
Contact Alan Liddle at [email protected].
