How recalls create category parity

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Consumers might freeze Eggo out in light of their recall

Last month, Kellogg’s announced a voluntary recall of their Eggo Whole Grain products due to concerns about potential listeria contamination. They deserve kudos for proactively taking that action. Especially with the knowledge that many brands never fully recover from recalls.

For example, Perrier, which built its brand on natural purity was forced to issue a wide-sweeping recall in the early ’90’s due to the discovery of benzene in their product.

Ironically, the product was being used as a control by a US government agency testing local water supplies when the chemical was discovered. Perrier was forced to recall hundreds of millions of bottles and their share price dropped by $40 after returning to the stock market.

Perrier was once the gold standard for bottled water, and helped invent the category. Though the brand stabilized after being purchased by Nestlé, it lost its leader position.

Things are just as dire for Kellogg’s. Cereal sales are ever-slowing, and all non-protein rich (or perceived) breakfast products are out of vogue. Eggo is a staple in a lot of homes, but sales have also suffered.

Like Perrier, Eggo lovers will now seek out alternate brands in the freezer case. What’s worse, the new generation of shoppers has told us in multiple research studies that they aren’t shy about switching to store brands. Millennials add a new wrinkle with this behavior.

Unlike Perrier which owned first-mover status in their category and had built the brand of a premium or luxury product (depending on the market) Eggo is essentially a commodity. Though a fine product, and well-branded for awareness over my lifetime, it doesn’t occupy a specific emotional niche.

That’s supposed to be why we choose branded products over store brands or unknown brands.

Not only are there other waffles that can fill that space in the freezer, but there are others that share the unique attribute of Eggo – the shape. That some or all of those are also produced by Kellogg’s is a conversation for another article. Once a product in this situation is replaced in the shopping cart once or twice, it is awfully challenging to reclaim that place, especially when private label waffles can be up to 35% cheaper.

That’s the biggest problem here. What did the recall trigger in the minds of consumers? Yes, this event is a literal instance of Eggo being unable to guarantee the safety of its food product. But subconsciously, it’s something bigger. That’s supposed to be why we choose branded products over store brands or unknown brands. That’s why Eggo has been advertising since its inception in the 1970.

Before brand love comes brand trust. If consumers can’t trust the brand, they won’t buy it and can’t come to love it. Young consumers have proven that they are more open to store brands, so instances like this can open the floodgates of customers straying and leaving permanently. A recall is a serious strain on trust that tests the brand in question.

What is a brand to do?

First, Kellogg’s did the right thing for its customers and brand by being proactive. They deserve credit for taking action. They have to find a way to take credit without reminding shoppers (or tipping them off in the first place) that there was a health concern. They might wait until the threat is proven null to do anything.

Since they got proactive with safety, they should get proactive with outreach. Use their owned channels to communicate as the brand returns to stores and offer other Kellogg’s product before that happens. Push complimentary products now to build favorability for those, then offer a compelling offer for Eggo as a bounceback.

Think about the box. Assuming a 6-8 week absence from the shelf, consider this a new product launch. How can Kellogg’s capture the attention of their core shoppers – and new ones – to get them to pick up the product again?

Recalls are never good. Does a health-based recall kill a food brand? Not necessarily, but it won’t be an easy road back to pre-recall sales.

5 Ways to Juice Up Your Restaurant Loyalty Program

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Has your restaurant loyalty program gone stale? Are you struggling to send the right message to the right customer at the right time? Here are 5 ways to make your loyalty program more valuable.

Has your restaurant loyalty program gone stale?

Are you sending random emails offering promotions without a purpose? Have you seen low open rates and low click-through rates? Are you struggling to send the right message to the right customer at the right time?

It may be time to experiment with data-driven restaurant loyalty programs. Data-driven loyalty programs consist of campaigns personalized by restaurant customer data gleaned from search results, mobile behavior, or even your restaurant POS system. They encourage repeat guests, but don’t alienate your existing customer base. When only 44% of loyalty program members are active (according to Colloquy), it’s important for your restaurant brand to stay top of mind for potential customers.

65% of guests say they are more likely to recommend a restaurant if it offers a valuable loyalty program, according to Loyalogy. Check out these 5 ways to make your restaurant loyalty program even more valuable.

1. Experiment with geo-targeting.

One way to juice up your restaurant loyalty program is through geo-targeting, or customizing the messages you send based on a potential guest’s location. Initially when mobile technology skyrocketed, restaurants started asking customers to “check in” on mobile in exchange for special offers. However, with the plethora of data about your restaurant customers now available, there are many more ways to target your restaurant customers based on location.

Geo-fencing is a specific strategy for geo-targeting customers. When a potential customer, someone who has opted into your loyalty program, is close to your restaurant and enters the virtual “fence” surrounding it, a message can be deployed, allowing brands to deliver timely bonuses. For example, a bakery can set a 1-mile perimeter around it and send ads or emails to customers who enter that radius. Simultaneously, it could set a 3-mile perimeter around a nearby office complex and reach potential customers that may be looking for somewhere to grab a pastry during lunch.

2. Comment on the weather, local sports.

If you don’t feel comfortable targeting your customers with mobile data, you could instead send emails based on hyperlocal happenings, whether that be new updates to the area, winning sports games, or odd weather.

For example, you could entice repeat customers by offering a themed appetizer if the local baseball team wins that night. You could suggest your most refreshing cocktail on the hottest day of the year, or highlight your cozy restaurant ambiance on days that it’s raining.

3. Track loyalty customers with their credit or debit cards.

Some restaurants require loyalty customers to sign in online in order to receive their rewards. Others are still using punch cards. Your loyalty program should seamlessly coordinate with your customer’s experience at your restaurant, automatically tracking how many points your customer has earned as well as what food items they’ve bought the most.

If your loyalty program is integrated with your POS system, it may be able to track their spending and remember customers based on which credit or debit card they use. That way, when paying for a meal, loyalty points instantly go into their account, and they don’t have to worry about inputting them manually or forgetting their password to sign in to the loyalty program.

4. Make it easy for your customer to check their loyalty points.

It’s also important to focus on the customer-facing side of your restaurant loyalty program. First of all, is there one? Can your consumers track points, rewards, and even past activity on an online loyalty application?

If not, this feature is definitely something to consider. With a customer-facing loyalty program, customers can track their rewards and follow their spending behavior online. Your restaurant can then send personalized emails to them when a new reward is available, and link them to the dashboard where they can view upcoming rewards, current ones, and more.

5. Personalize based on previous purchases.

With a restaurant CRM system integrated with your restaurant loyalty program, you can view your customers’ previous purchases or purchasing patterns and collect other valuable information. You could send a personalized reward to your highest spending guests or most regular customers to encourage their repeat business.

The ability to segment your restaurant customers is a must for loyalty campaigns. Have a new cocktail? Find all of the customers who have ordered a particular appetizer or cocktail, and offer that list of customers a promotion on the same dish the next time they come in.

Don’t Go Too Far

It’s important to remember that there’s a thin line between “cool” and “creepy” when targeting your loyalty messages. How do they know where I am? How do they remember what I ordered last?

64% of consumers say the best approach to mobile tracking is opt-in; only 12% are OK with being automatically tracked, according to OpinionLab.

That’s why you need to create a smooth restaurant loyalty program. Pull in additional data from social media and craft emails sure to resonate with customers. Create an omnichannel experience that’s relevant. And most importantly, think like a guest, not like a marketer, and set your sights on delivering a restaurant loyalty program that’s not only commendable but recommendable.

Allison Tetreault is the Content Strategist for Toast, the All-in-One POS System. She manages the Toast Restaurant Management blog and also creates valuable content for restaurateurs. Follow her on Twitter or LinkedIn.