Restaurants embrace mobile marketing

While claims that mass advertising is dead are greatly exaggerated, the growth of mobile marketing in restaurants is a story just beginning to be told.

Chains as large as Starbucks and restaurant groups as small as a few units are realizing the advantages of marketing directly to customers through smartphone-based apps. In addition to messaging, some apps manage customer loyalty programs and geo-location, while others provide for payment and social media interaction between users and restaurateurs.

Operators say there’s no better target for mobile marketing than tech-savvy, restaurant-loving Millennials, who dine out as often as four times a week. Contacting them through devices that are always with them provides restaurants a channel through which they can communicate immediately and over which customers have full control.

“For us, mobile is about reaching the right people at the right time with the right message,” said Dan Kim, founder and chief concept officer at 250-unit, Dallas-based Red Mango. “Mobile is about being a brand buddy as opposed to an advertiser.”

That means customers who don’t want to participate won’t receive unwanted messages. Those who do opt in receive targeted special offers, including membership in Red Mango’s loyalty program and the option to pay for their smoothies and frozen yogurt using the chain’s smartphone app.

Red Mango’s aim, Kim said, is to draw customers into the chain’s loyalty program, where they receive points for their purchases.

“We haven’t figured out where to go beyond generating trial with special offers at this point,” Kim said. “But we believe that the loyalty program is a great way to get them to ultimately come back.”

To lure customers to its doughy delights, Krispy Kreme’s smartphone app has a “Hot Light” alert. Using a geo-location feature, the app lets customers know they’re near a store where hot doughnuts are available. Similarly, Rita’s Italian Ice sends mobile messages to customers when they come within 1,000 feet of one of its 650 units.

Joe Sloboda, a four-unit VooDoo BBQ & Grill franchisee in Fort Lauderdale, Fla., wants to add customers to his loyalty program as well, but he’s also seeking to build relationships with them through his mobile app’s social media connection. Customers who opt in to VooDoo’s loyalty plan do so through Facebook, and when they comment on their VooDoo experiences through that channel, those messages are relayed back to Sloboda.

“Facebook gets guests and their friends — people who’ve probably never visited us — into a public dialogue about our restaurant and our food,” Sloboda said.

Using the VooDoo app, customers often are posting about their experiences while still inside the restaurant.

“With a simple click on my own phone, I can publish any of those comments to another Facebook page or Instagram. It’s great exposure for us.”

To test the marketing effectiveness of the smartphone app, Sloboda ran two offers available only to participating mobile customers. One doubled rewards points for customers who chose specific menu items, and another focused on selling baby back ribs at a slight discount plus a bonus reward of five points.

Check averages increased some 45 percent on the first offer, and rib sales soared 170 percent over normal on the second. But just as valuable as those sales, Sloboda said, was the ability to gather rich data revealing each mobile rewards member’s preferences.

“When you have that, you know exactly what to offer them; you’re not guessing anymore,” said Sloboda, who called the price of the custom-designed app, “amazingly affordable. You can add just about any feature you like and make the cost skyrocket. But we’re just a small franchisee group that had to do what met our budget.”

Steve Heely, CEO at 26-unit, Orlando-based Earl of Sandwich, said his company’s mobile app allows customers to “gift” points to others if they prefer. That’s yet another of the many features that make mobile marketing so relevant to Millennials and restaurant customers in general, he added.

“They really get to control the interaction and not be swamped with emails, coupons or advertisements,” said Heely, noting that he’s working with the app’s creator to add mobile payment to its platform. “Mobile is in line with how today’s consumers want to relate to restaurant brands — especially with social media…. We know customers like it.”

This story has been revised to reflect the following correction:

Correction: Nov. 6, 2013  A previous version of this story has been updated with the correct first name of Red Mango founder and COO Dan Kim.