The case for a mobile app for restaurant brands

Restaurant brands of all sizes are making or thinking about making a mobile app in support of their business. Case studies of successful brands that have made the leap abound! If you’re a brand still in heated discussion in the conference room, here are the reasons that may just get you set to launch.

Want the pragmatic point of view? Read our counterpoint: The case against mobile apps for restaurant brands here. In this article, we’ll lay out the affirmative case for moving forward with building an app.

Efficient cost per touch

First and foremost, like any direct marketing channel there is a one-to-one aspect that creates an extremely efficient marketing channel. Through app usage, app-based notifications and triggered emails the cost per touch can be cost effective if properly administered. Especially for small or emerging brands concerned with media waste, this is a value because notifications create a low-cost mechanism for driving cost.

Customers volunteering to hear from you

Outdoor boards, radio spots, television. The customer did not elect to hear from your brand in these mediums. They may take in the message, they may even like it. But there is a barrier to receptivity because it is appearing to them somewhat randomly. Customers who choose the mobile app for a brand they like ask to interact with that brand more. They invite the brand into the device they use the most. How much? 57% of digital media time is spent on smart phones according to comScore.

Great owned media channel

Your mobile app should be the premier media channel. Because it features your brand and only your brand. The intimacy of the app in the customer’s hand make the connection as clear as can be. It’s the next best thing to the smiling face of your staff. Even without opening the app, the app icon on their home screen can help keep your brand relevant and top of mind.

Data. Data. Data. Heard anything about data lately?

A mobile app can build loyalty

For brands with strong traffic and awareness, a well built mobile app is a fantastic tool for driving customer loyalty. Notifications and exclusive offers, along with location based triggers can serve as reminders to customers and help win extra visits. Even without access to a user’s notifications, enticing incentives will help lure guests back in for deals or offers they perceive as valuable. It’s no coincidence that top apps for visited concepts like Chick-Fil-A or Starbucks have strong rewards-based incentives and in-app specials. But thinking a mobile app will drive traffic or loyalty without offers is flawed. Customers are always looking for ways to save, or for special treatment.

A well thought out contact and offer strategy will help keep guests engaged in between visits. Knowing when to message and went to be quiet will earn a lot of respect from customers who are quick to mute unwanted notifications of any kind. But timely offers based on past visits or location will usually be appreciated. A mobile app has to be built and launched with this in mind.

Can capture pre-commited revenue

Calling back the examples of Chick-Fil-A and Starbucks, they both do something amazing that you may not have noticed. Many apps allow users to add a credit card or payment source to the account in the mobile app. But the above apps take it a step further by requiring users to pre-pay funds in to their account. The user is charged before they even make a purchase at the restaurant. This creates a revenue environment similar to gift cards, with a certain subset of guests committed to visit and spend, and another subset which may never claim the products they pre-payed for. From the brand perspective, it’s all upside.

Offer and message testing

Data. Data. Data. Heard anything about data lately? Through careful message testing to users of the mobile app, brands can learn which offers will drive traffic in mass media at a much lower investment. This allows brands to test LTOs as an exclusive without rolling it out system wide. After successful trial on the app, the brand can move forward confidently.

Beyond offers, the brand can also test campaigns, call-to-action copy, visuals or any other creative elements on the mobile app before investing in costlier television creative or even digital campaigns. This allows for more intelligent deployment of funds towards creative campaigns that have already been proven successful with core users on the mobile app.

Geolocation opportunities

Data can also unlock new opportunities by serving messaging to people nearby a location. Serving a notification doesn’t sound all that interesting but serving an offer only to people nearby while a specific location is slow is a valuable tool. This is a serious traffic driving methodology that can delight customers and fill down periods.

As is clear, there are many ways that a mobile app can move business forward. Want the more pragmatic point of view? Read our counterpoint: The case against mobile apps for restaurant brands here.

Transcript of Food & Restaurant Podcast – Episode: Are You A True Digital Restaurant Brand?

Transcript of Food & Restaurant Marketing Podcast – Episode: Are You A True Digital Restaurant Brand?

[00:00:05] Adam Pierno: All right, welcome back to another episode of Food and Restaurant Marketing, I am Adam Pierno, your humble servant and host, and with me today is?

[00:00:14] Daniel Santy: Your arrogant servant and host Dan Santy.

[00:00:17] Adam: [laughs] We are back, we have a great topic today. We wrote an article about this a couple of weeks ago but this is something we’re talking about basically non-stop.

[00:00:28] Dan: Pretty much, yes.

[00:00:29] Adam: Pretty much. I don’t think it’s fad. Today’s topic, Is your brand really digital? Is the way you should pronounce that when you read it.

[00:00:39] Dan: Yes.

[00:00:39] Adam: What we want to know, today everything’s online, everything’s mobile, I have the power of a supercomputer in my pocket in the form of my phone. I can pretty much accomplish anything I want. Brands all think that they are on the leading age or doing ‘digital’ but are you really digital? Are you really understanding the principles of digital that make results happen, make things change and capitalize on behaviors that consumers are leaving every day.

[00:01:12] Dan: Yes, I think many many brands are way behind the curve in this area and I don’t know if they think they’re ahead of the curve, I don’t know if they think they are current or what the case may be, but the vast majority of brands really are behind the curve when it comes to the digital space, and part of that is, and that’s me being a jerk, part of that is the landscape, the ecosystem as I like to call it is in constant flux. So it becomes very difficult to really say, ” Hey, we’re ahead of the curve”.

A good friend of mine is a digital director at an agency, he’s hyper-critical of his shop, and that shop’s doing some pretty advanced things for their clients. It’s interesting to say people are behind the curve, I think I want to be careful when I say that, but I just want people to know that you should be changing with the ecosystem. That’s if you going to dive into digital, make sure you understand you’re going to have to change with the system.

[00:02:18] Adam: Yes, let’s just talk about something that you said is the curve. What do we think is the middle of the curve? What’s table stakes? What do you have to have to be considered even a current brand? We’ve been really digging into this topic across categories, beyond restaurants too but in other retail categories to understand this, but we see, there is are kind of a menu that should exist.

[00:02:44] Dan: Yes, I agree. Email marketing, I mean it sounds so mundane, but really if you think about it, those are some of your best customers because they’ve given you their data and said, “Yes, it’s okay to message me.” Staying current with your email marketing and make sure it’s tight, don’t over send, don’t send things that are ridiculous just to stay in front of the audience, again be relevant, we talk about that all the time. All these things you have to be very relevant.

[00:03:19] Adam: Right, so email is a great example. Having emails kind of table stakes, but having a great email program is being ahead of the curve, so having automated sense, having relevant personalized information that is thought out in catalogue and sent at the right time. That moves that email program, or even have an email program to sign up, put your card in a fish bowl to– ahead of the curve.

If you are doing it right and you have the right inputs in there and you can customize my message and say “You like this dish, here is a deal on that dish today, because we know you coming on Thursdays.”

[00:03:57] Dan: Right. Yes, and one last point on email marketing and that is, look at the analytics, see how they’re performing. When you pay attention to that, you can get rid of the under performing messaging and you can capitalize on the things that perform well. Now all of a sudden you’re again fine-tuning that messaging going forward and so your customers are going to appreciate that.

[00:04:25] Adam: Yes, look at the analytics is step one, do something with that is step two. We don’t have anything to say when people say, “Well we’ve got 50,000 subscribers,” and it’s like what did you do about knowing that? How big are you when you start segmenting and creating subgroups, and it’s not just our customers but this is our chicken customer, this is our beef customer, this is our dinner customer, this is our breakfast customer. Another thing that I think is kind of tables stakes, social media.

[00:04:53] Dan: Yes, unfortunately, no I’m just kidding. [laughter] It is, I mean there just billions and billions of interactions in social every day. You just need to capitalize on that, and we talked about it in a different podcast. The idea of putting up relevant content and then supporting it with paid social. It’s so critical for those of you who understand how the algorithms work, your organics reach is very low these days.

[00:05:29] Adam: It’s lowest, 2%, if you’re a brand, it’s over 500,000 followers.

[00:05:35] Dan: Yes. It’s a pay-to-play model, but it’s not terribly expensive and you can control it and once again measure it and test and optimize.

[00:05:45] Adam: But just being there, it’s expected value. As a consumer we know from our studies and reading other research studies that consumers expect whatever platform they use, they expect brands to be there and when they want to complain or ask a question or if they’re on kick and they want to ask a question on the brand, they expect you to be there, and when you’re not, they feel like there’s something missing about the brand.

That doesn’t mean you have to be there, but it means you should be thoughtful about where you are and how you reaching the majority of your customers and not just people in general where you can get Facebook.

[00:06:17] Dan: Exactly. The final one I guess for table stakes is your site, your website, and please please understand that it needs to be mobile optimized, it’s just so critical. Go to a restaurant brand, maybe I’m just trying to find the nearest location, or I want to see a menu, whatever, make sure I can look at it on my smartphone really easily and visibly.

[00:06:51] Adam: Yes, and on the phone I mean you should, this point site should be built for the phone first. We’re all retail, we want to drive customers, we want to drive traffic. Location should be the first thing that’s popping up, and it’s saying there’s one a quarter mile away from you, would you like directions? Here’s the menu to that store.

[00:07:09] Dan: Right, absolutely.

[00:07:09] Adam: Right? Not just a generic PDF, please no more PDF menus. Give me a menu that I can scroll, that customers can copy out an item out of it, share it and send it to somebody and say, “This is what you wanted me to order.” I mean make it easy for people to shop you with one thumb.

[00:07:26] Dan: Ask yourself, “what sites do you use on your mobile device and enjoy so much?” Then say, “what is it about those sites that make it a better user experience? Make it a simple user experience.” Make sure you’re thinking about that for your own site, or if you have someone building your site, which most people do obviously, or designing it, make sure they understand these fundamentals as well.

[00:07:52] Adam: Yes, it’s really funny that when we’re here talking on the Food & Restaurant Marketing Podcast, you don’t have to draw inspiration just from that category. Go look and see what other brands are doing. When we talk about social media, go look and see who is really doing a great job engaging customers or creating content or whatever you want to do, and borrow freely, don’t steal. Be inspired by those, then apply it to your own brand.

I think when you look at people that are doing really well in this space, Denny’s has taken it to a next level of really being on top of it, great community management for a brand that you wouldn’t think even have a community.

[00:08:36] Dan: Right. Indeed you bring up a community management that is so critical. If customers are contacting you or tweeting or posting on Facebook, whatever the case may be, make sure you’re responding. Even if you just private message them or whatever the case may be, that’s all they want, they want attention, they want somebody that say, “Oh my gosh, I’m so sorry you had that bad experience,” and vice versa, they might be tweeting, “Just had a great meal at Quiznos.” I don’t think I’ve seen that tweet in a while–[laughter] but reward that person too and thank them.

[00:09:16] Adam: Yes, and I think what gets ahead of the curve and community management is the voice, the tone. The speed of the reply is important but really, again going back to Denny’s, the way they have been winning customers is just through a consistency of wit and demonstrating that they’re connected to the internet and knowing what’s happening almost all the time. In fact setting trends. Let’s be honest 10 years ago for Denny’s, it was not a relevant brand.

[00:09:45] Dan: Absolutely.

[00:09:45] Adam: They’re forcing themselves to be relevant through conversations that are happening and getting picked up, and copied and pasted and tweeted and reposted across the internet. That’s a huge win for probably the three entry level people that are responding to tweets all day.

[00:10:02] Dan: Yes. Another pet peeve of mine is when the brand is trying to get you to tweet about me. Tweet about me and I’ll do something for you. I think that kind of tends to be disingenuous. This is off category but I made a hotel reservation just the other day and a like box came up after the reservation said, “Hey, like us on Facebook” or in one of the social– they made it very easy for me to do it– should I do it?
Have not stayed at this property, so I’m not going to tweet about something I haven’t stayed at yet. I thought it was a little too aggressive and then they emailed me that same message. Now that was a bit irritating.

[00:10:42] Adam: Over the line?

[00:10:43] Dan: Yes, I gave you my email address so you could send me my confirmation not so you could continue to market to me. I think we have to be wise about how you communicate with your customers and what you’re asking them to do. Like us on Facebook, well give me a reason why.

[00:11:00] Adam: Absolutely, another thing when we think about brands that really are digital. That really get it. Domino’s is a great example. They just keep innovating. They keep on going further, further and further with finding new ways to get people to order, engage with the brand in digital space. That’s great in and of itself. I can order with an emoji. That’s cool and it’s fun and I’m never going to do it. What’s even better is that it’s an idea that gets PR.

[00:11:30] Dan: Exactly, the holy grail of a great marketing campaign is when it does get publicity because it carries itself so much further. People are going to see the story, go look it up online. All of a sudden you’re getting eyeballs, you’re not getting from your traditional TV buyer or whatever you may be doing. That’s a great point. It’s not easy to do at all. We’re not naive about that, but think about that and think about the programs that you have and put them out to the press. Let the press decide if they’re newsworthy or not, but not doing it at all, it’s not going to get picked up.

[00:12:12] Adam: Yes, part of the thing is having a mind for that. If that’s your goal. Thinking about that as you’re looking at ideas and programs as they come up. It’s like, “Could we pitch this? Is this an idea that could get press or is it just an idea?” Ultimately revenue is more valuable, but if you can also get press, that’s great. I kind of suspect the order with an emoji is more of a PR play than the actual. I don’t think anyone thought, “Oh, this is going to increase sales by this percentage.” The shareholders did not give that a standing O with Q4 call.

[00:12:46] Dan: Indeed, I read a great– dovetailing just more of this digital advertising. Read a great Buzzfeed article just the other day. Essentially, I think it was the CEO had pen this particular column. He was talking about the ad industry and the fact that we’re taking linear advertising and putting it in the digital space and how flawed that truly is because the digital space is its own animal and taking what we’re doing in a print ad or television commercial or whatever to try and make it fit into the digital realm is backwards. I couldn’t agree with him more. You’re going to be in that space make sure you think about how those ads, those ad units, the native advertising, whatever you’re doing is going to live with those publishers so that you could put it there in a meaningful way.

[00:13:49] Adam: Absolutely, banner ads are mostly a waste of time and that’s the exact meaning of is your brand really digital. Well, we have a display program or we run pre-roll. At least pre-roll tells your story. Video is powerful but really plugging in and understanding how people use digital, how they use mobile and creating a message that connects that relationship and a consumer creating that beautiful triangular value. That’s what real digital brands are doing. Domino’s order with an emoji, pizza tracker and all those things it just keeps on piling on and making it stronger and stronger.

[00:14:30] Dan: Agreed. What’s your take on apps, Adam? I know you have a pretty strong opinion about the app world. Should every brand have an app?

[00:14:41] Adam: No. I was actually with comScore a couple years ago. It was the late ’14, might have been early ’15 released the stat that said that monthly average app downloads had gotten to zero. [Editor’s note: It was actually September 2016] That people were just downloading fewer and fewer apps per month.

[00:15:01] Dan: I remember you bringing this to me.

[00:15:03] Adam: At its peak, it was 11 a month or 16 a month or something. This was across a general age group so it wasn’t specific to any demos. I’m sure there’s tweens out there that’s still downloading.

[00:15:13] Dan: Plenty of apps.

[00:15:14] Adam: Yes, and since I read that, I really have been paying attention and picking up people’s phones and looking at their phones and seeing what apps they have, looking for ideas. I’m down to two pages and maybe generously, maybe I have 25 apps on my phone. I don’t want to join the conversation with your brand. I eat a lot of QSR, a lot of Fast Casuals. I eat a decent amount of Casual Dining still. I’m probably the last one.
I don’t need an app unless there’s a value to it and I don’t need a coupon. It’s like I have the Delta Airlines app on my phone because it serves a really good purpose and does it in a really good way when I travel.

[00:16:00] Dan: I think what you’re talking about there, Delta is a great example and that’s function. It’s an important function. You’re simplifying something for me [unintelligible 00:16:12] to your point that the app has enormous value. I would think really long and hard about an app but I think is better, that is what we were talking about earlier in creating a pristine mobile web experience for your brand of whatever that may mean for you.

That is probably money better spent than trying to invest in an app because what people forget about the app. Now you’ve got to get people to download it so all of a sudden you got to spend marketing dollars promoting your app to get people to download it so hopefully, they’ll use it and now you’re not using those same. You’ve diluted your marketing budget when you could have been using that to be doing mobile advertising or SMS advertising whatever the case may be.

[00:17:02] Adam: That’s it, you nailed it. We talk about it when we were working with brands. We tell them if you’re committed to this you’re creating another product. Would you rather promote a day part or this app? Because now you have to pull people into this ecosystem to get the ROI out of it. Maybe, you might. I think you’re dead on, having a more powerful website is more important because then when it’s on my mind and I pull it up, I get the experience I want versus now the restaurant, your locations.

You’ve given up POP space to try to get people to download this app that they probably don’t want or they download it to get the coupon or whatever you’re incenting them with and then they delete it or they keep it and it’s on page nine of their phone and they never look at it again. Is that valuable? I don’t know. It’s debatable.

[00:17:53] Dan: It’s such a competitive space and I take your point, why do you have so few because so many don’t provide value. Why would I load up my screen with these things and never use them and I bet if you track your behavior of the apps, you do have it’s probably something like 80 20, 80% of your users have 20% of the apps you have on your phone.

[00:18:22] Adam: I’m sure. It’s probably Mail, Twitter and whatever game I’m playing. It’s those three things. You definitely hit the nail on the head. Delta as an example, I also have the Southwest app. Those make traveling easier. I can get the boarding pass. I don’t have to print anything if I’m on the road I just pull up that little QR code is the only place–

[00:18:46] Dan: Change my flight if I have to.

[00:18:48] Adam: Right, makes traveling easier, makes it simpler and so I keep those things on my phone. But does a restaurant app, how is that going to make my life easier if it’s for– is an Applebee’s app going to make my life easier?

[00:19:02] Dan: No.

[00:19:03] Adam: Is a Buffalo Wild Wings app? How will it improve the experience? I guess–

[00:19:08] Dan: No at all. [laughs] In our opinion.

[00:19:11] Adam: If I was a weekly customer and it gave me a coupon and let me order every week or predicted or did something. It reminded me, “Hey it’s time for your weekly–.” I don’t know. I don’t think I want that either, so why are we doing it. You’re paying for a location finder in most cases.

[00:19:26] Dan: Indeed. Well, here’s the next big subject that everybody’s talking about is data. Why is it crucial? Why is data so crucial and have the publishers in the world who are talking about data, ruin data by referring to it as big data which I think makes people go, “Oh man crap, what I’m I going to do with all this information,” because there is a lot of information available to us, but what information is really meaningful.

[00:20:01] Adam: You said it. Everybody’s talking about it but nobody is saying anything. It’s just like big data is really powerful. The brands that are truly digital brands know how to employ this data. They know what data they’re trying to collect. They have a precision about it. They’re smart and they have a plan for what they want to learn.

Start with a hypothesis. If you want to be a digital brand, figure out what you want to learn, and then say, “Okay. To do that, I need to capture this data.” We work with brands a lot on this particular aspect of how do we better know your costumers? what data do we need to collect?

[00:20:37] Dan: Exactly, and make sure, Adam said this earlier in the podcast, analysis. Analysis. That’s the important thing. It’s one thing to collect the data and that’s its own infrastructure need, to make sure you can actually collect data on what your costumers’ behavior is. Second, is to analyze that. Then third, of course, is to make conclusions and recommendations on and how’re you going to act on that analysis.

I think we miss that piece of the puzzle all too often. With as much data as there is today, it still kills me when I hear a brand say things anecdotally. Well, that didn’t work. It’s like, “Can someone please give me the analytics on that?” What does that mean? Does that mean zero people did whatever it was we wanted them to do? 10% did, and we usually want a 50% of that activity rate, whatever. I get so frustrated because I know the data is there to– maybe there to validate that it didn’t work, but let’s define success, let’s define failure.

[00:21:47] Adam: Yes, amen. I know we’re on the same page about this one. I think when you’re talking about measuring success versus failure and there’s a lot on the line. If you’re a public company, there’s a lot on the line between shareholder value. But for private companies too, there’s jobs on the line, there’s locations on the line. This stuff really matters. If we’re talking about measuring the difference between success and failure, one thing we are obsessed with is attribution.

If we have a campaign that’s about- let’s make it about a day part, so everybody’s launching breakfast right now, that’s the craze. What I would love to look back at this in 18 months and see who still has breakfast. What is really driving breakfast traffic? Which piece of your digital campaign is really working and doing that? Knowing that and going from the top end, so we did this native video series with a breakfast chef, and now breakfast is up 10%. Well, what percentage of those people went deep in the funnel and clicked and did something that you know they used a coupon and they went to your store.

[00:22:48] Dan: Agree because usually in a situation like that where you’re adding a day part or a whole new menu and set of items that are not typical to your brand, your regular costumers are going to try it. Digital lose a lunch over a breakfast a trip, so I think you’re absolutely right, Adam. Attribution is king because, again, that’s the thing that’s going to tell you what’s working and what’s not.

[00:23:20] Adam: Yes, you have to be able to track back. The last bit of this is actually going inside the store. We talked about Domino’s that has great tech to get me to order, and they don’t have an in-store experience to speak of, but Panera has added kiosks on which customers can order, customize their order, choose your sandwich, choose your soup, whatever they’re doing, and they go sit down wait and someone brings it out. It’s essentially a swap out, one for one, with a clerk versus this kiosk.

McDonald is also been testing it with the ‘your way’ platform that they did away with, but they kept the kiosks. Those are digital innovations that make sense for the brand. The digital menu boards are not.

[00:24:09] Dan: [laughs]

[00:24:10] Adam: That does not make you a digital brand. The Ziosk-

[00:24:13] Dan: I love that analogy.

[00:24:15] Adam: the Ziosk table-side tablet that sits on the table at Chili’s, also does not make you a digital brand.

[00:24:25] Dan: Not at all. I couldn’t agree with you more. I think that that example you’re giving, again, no different than the app that Panera kiosk is serving a really important customer experience, and that is speed of service. I don’t have just talk to somebody, I’m used to working in this environment, especially, all them- Forgive me for saying it, Millennials, Gen Z, who grown up with technology, they’re very comfortable with it. If you’re going to do that, though, make sure, again, that user experience is a stellar.

[00:25:00] Adam: That right there, the user experience, is what separates the digital brand from the not digital brands. The brands who are saying, “We’re digital. We have digital menu boards. We bought Ziosks for the table.” No, you put a TV on the table.

[00:25:13] Dan: [laughs] Right.

[00:25:15] Adam: Now you have distracted guests. You’ve actually broken the table experience when two kids fight over the Ziosk, or one person is consumed with a game and the other three people are eating. That doesn’t make the experience better, that’s what- I guess it took us a long time to get to this, and it’s not in our notes but- or the article, does your use of digital make your brand better? Does it make the experience better?

[00:25:42] Dan: Yes. I can give you another one that’s a pet peeve of mine, and this is at Fine Dining. Typically, I think some casual diners do this, but please don’t put your wine menu on an iPad.

[00:25:54] Adam: Oh God.

[00:25:55] Dan: I’ve got to scroll and scroll. I mean this is not the experience I want. I want to look at wine menus, I want to turn that page, that’s a bad experience in my opinion.

[00:26:08] Adam: There is something about–

[00:26:08] Dan: It serves no function except that you don’t have to print wine list anymore.

[00:26:13] Adam: But you could print a one-page wine list, it doesn’t have to be fancy. There’s something about the tactile flipping the page and it doesn’t have to be in a book, but- I agree. It’s especially weird on a Ziosk. I don’t want to pick my rosay from a computer screen and be like, “Oh, how about Rose number 91.”

[00:26:31] Dan: Yes, the waiter is standing over me and he’s just, “Would you like bold flavors or you like sweet.” And I’m like, “Go, please go away.” [laughs]

[00:26:40] Adam: That’s not making the experience better-

[00:26:41] Dan: No.

[00:26:42] Adam: -it’s making it awkward.

[00:26:43] Dan: Exactly.

[00:26:44] Adam: Super effing awkward.

[00:26:46] Dan: Well, I think we hit the digital realm here, that’s for sure. I love talking about digital because it is ever changing.

[00:26:55] Adam: Absolutely.

[00:26:56] Dan: That’s for sure. This won’t be the last time.

[00:26:58] Adam: Even by the time we record this, to the time we publish this podcast episode, a lot of things will change. Thank you for joining us. Because Dan and I are both extremely digital people, you can use the electronic mail to reach us. dan@foodandrestuarantmarketing.com or adam@foodandrestaurantmarketing or you can hit us on the Twitter, @F&RM is our Twitter handle. Visit the website. Please subscribe to the podcast if you like what you heard, or if you hated what you heard, subscribe anyway. All right, thanks a lot.

[00:27:30] [END OF AUDIO]

Transcriptions by Go Transcript.

discounting, coupon, offer, FSI, LTO, daypart

Listen to the episode: Are You A True Digital Restaurant Brand?

Transcript of Food & Restaurant Marketing Podcast – Episode: Why Does Restaurant Traffic Die?

Transcript of Food & Restaurant Marketing Podcast – Episode: Why Does Restaurant Traffic Die?

[00:00:05] Adam Pierno: Welcome back to another edition of food restaurant podcast. I am your host Adam Pierno, and with me today again is Mister Daniel T Santy.
[00:00:15] Daniel Santy: Hello.
[00:00:17] Adam: Great to be back today on this beautiful rainy day.
[00:00:20] Dan: Yes, we love the rain in Arizona.
[00:00:23] Adam: Yes, here in the desert where actually happy when it rains. So sorry rest of the country we get 380 days of sun a year, something like that. That’s not may not be a good — exact. So today we have an exciting, very exciting topic. We did an article about this a couple weeks ago and we’ve been talking about it around the office a lot. As we see concepts grow and mature and we see kind of the phases of the concept cycle for different restaurant brands, we had a very, very important question that we’ve been debating.

Why does traffic die? Really, what makes a brand that’s extremely strong one day suddenly have a drop-off and have a lack of traffic? It doesn’t mean it has to happen overnight but what causes that change? What are some of those things? And then obviously the question would be what can I do to stop some of those things?

[00:01:19] Dan: The first thing that has come in mind for me and this is just forever and ever and that is, the oversaturation of restaurants and I mean globally speaking. So it doesn’t matter if you’re a QSR, a fast casual, casual dining. There are just more and more restaurants opening each and every day. New concepts coming on, concepts that are growing because they’re getting investment money from private equity.

So the competition just continues to grow and grow. And quite frankly the demand is not necessarily come back from the Great Recession so we’re all still battling for that share of stomach as I like to say and if you’re a QSR and a fast casual opens up down the road, there’s a good chance that it could have impact your traffic. Your competition is not just the other Sam. If you’re saying what shop the other Sam which shop around the corner.

[00:02:19] Adam: That’s a great point. I think of that as the better mousetrap. So it’s not necessarily–Dan you’re dead-on. It’s not when we talked about share stomach you’re not — if you’re Quiznos you’re not just competing against Jimmy John’s and Subway and the other huge sandwich shops that are crushing you right now. Anybody that serves the same need which for Quiznos is lunchtime, get in and get out for 30 minutes and probably under $12.

That’s your competition and that could be, we’ve talked a lot about prepared food at grocery even stealing share there and getting people’s attention, getting people’s dollar. So whoever invents a way to get that 30-minute occasion, the population is not growing that fast that we can support all of these concepts. We’re going to see a shakeout eventually.

[00:03:10] Dan: Yes, there’s got to be and I think that the older your brand, the more mature, rather I guess I should say, that your brand is, the more I believe you’re at risk because people like new. People want something different and so when that new chain comes to town or opens up in your area, curiosity is going to drive you in there and right there, there’s one traffic visit that you lose just for people checking out the new brand.

[00:03:40] Adam: That’s right. But we also know that there’s a, usually after there’s trial, there’s a trough period where you get a spike of new traffic when a new concept shows up in town and then it dips down when people have tried it and they’re still figuring out whether they liked it or not. That’s your chance to re-entrant yourself either by adding a menu item or changing your value prop or whatever you can do to counter that concept and what their appeal is to people.

[00:04:08] Dan: It’s never been more important to make sure your marketing is really fine-tuned and honed in and if you’re having sales problems and I know the first thing to do is to cut the ad budget, cut the marketing budget and all that does is further perpetuate the problem. You’ve got it. We know ’cause we’ve done all the research. Share of voice so if I’m in your head, my brand’s in your head, I have an opportunity to get your dollars. Doesn’t mean guarantee it but it certainly if I don’t have you in my head then there’s zero opportunity and that’s where traffic can go to die.

[00:04:54] Adam: Yes, I can’t try what I don’t know. The highest awareness gets the most trial and a lot of times the most favorite rankings. Think a bit – everybody listening to this and Dan, you tell me if this is true, have you in the last 60 days, let’s say, talking about where to go for food, have you uttered the phrase, “Oh yes, I always forget that place.”? Did someone made a suggestion?

[00:05:17] Dan: Yes, all the time, the other way I do is right drive by it go “You know, I keep meaning to go in there.” But you never do. So that’s a great point because I think that just shows was you how hard it is to get people to change their behavior that isn’t, again, going after the “Let’s go check this place out because it’s new.” And you read about her about it but that day-in and day-out behavior, it’s very difficult to change behavior.

[00:05:44] Adam: Absolutely and that’s when we talk about top-of-mind awareness which is a bit of a buzz word cliché from days of yore. It’s really about getting people to not forget you. It’s about people knowing that you’re on the list and you’re always kind of floating around in their mind as an option. When we think about really strong brands today that have a lot of traffic like Raising Cane’s is a great example.

They don’t do a lot of mass advertising. They do a lot of community partnership but some things that they do to really maintain that dominance and make sure they stay where they are. They’re simple. It is so simple. You walk in there and just a handful of menu options. It’s really hard to mess up from the experience curve, you know what you’re going to get and they deliver it. Good if they do a great job every time so you get what you came in craving and there’s not too much movement there.

[00:06:40] Dan: Agree, and the problem with lost traffic and – we could pick on Chipotle again seems like we have, having in a podcast or two or maybe we’ve picked on them and everybody gasp, one of the two; someone will have to tell me.

[00:06:55] Adam: It’s topical.

[00:06:56] Dan: But the catastrophe is obviously also a way for traffic to get killed and obviously that happened to Chipotle. I know they’re making strides. They’re making inroads. I heard they’re going to be running more advertising and so forth and so. But boy getting it back, again, because once I stopped going, the behavior shift occurred. Behavior change I was talking about earlier, stuff that create both held on for so define yourself, right? But if you do, you’ve got to be even that much more creative in how to get those customers back.

[00:07:33] Adam: And when you talk about the catastrophe, so everybody knows what happened there and we’re going to rehash that but what’s funny about what happens in the wake of the catastrophe? So Chipotle was always lauded for being this super operator, efficient, great training, great personnel. Experience was amazing, right? And they were just always getting high fives. Well now you know the CEO now, we’re down to one CEO, comes down and says “My audit shows that customer experience is a C across the system.” Well that doesn’t happen, the catastrophe caused this ripple effect that caused that.

So it’s one thing that builds on another thing that builds on another thing and that’s where I think brands get in really big troubles. Even sometimes a small catastrophe can happen, and then what do we do? Recover and everything goes to hell while you’re trying to fix the big problem with the perceived big problem.

[00:08:26] Dan: But it’s not exactly the same but I love of the Domino’s’ kind of success story that’s happened over the last several years. They didn’t necessarily have a catastrophe but they certainly did come out and say “You know what? Our pizza really stinks.” They owned it which was huge and then, not only did they upgraded and then they started creating a better customer experience through technology. I can’t tell you enough how important technology can play a role in the customer experience. Just take online ordering for example, people find it so fascinating to watch their pizza.

[00:09:14] Adam: They do.

[00:09:15] Dan: Where is it in the assembling.

[00:09:16] Adam: Isn’t it weird?

[00:09:17] Dan: Yes, it is weird but you know what? It’s working in a big way and they are owning tech in a really big way and I think restaurants need to pay very close attention to their web assets, to their online ordering if they have it. Even if it’s their menus online got to create a great customer experience there as well not just in store.

[00:09:39] Adam: And what you’re saying, that’s a real reason why traffic. Based on behavior changes outside of your four walls so technology is profoundly changing how we think about food; how we order food, how we interact with restaurant brands and Domino’s is innovating way ahead of the field and thank God they are. They’re testing a lot of things for a lot of us that — it won’t work for a lot of brands but for the brands that scaled, a lot of them can employ some of these things that are working.

But as consumers change those behaviors, what happens is that people get left, the brands get left behind if they’re not at least up to speed on some of those things.

The challenge for brands is, are you – how do you invest? Where do you put your chips? If there’s new media, there’s new social channels, there’s new tools, do I need an app? You can’t possibly do everything if you’re a small brand. Domino’s has the luxury of having that market cap to be able to make those investments.

[00:10:40] Dan: Yes. You’re absolutely right, but the beauty of the web, the inter-webs is that even small brands can take advantage of the technology.

It’s understanding how your customer uses technology. Once you understand that and what’s important to them then whatever budgets you do have, and again limited compared to something like a Domino’s, go all in on two or three things.

Test, optimize, test, optimize and see what resonates with your audience. Believe me, I think you can win a lot of hearts and minds; you’re reaching out to audiences in the right way with the most relevant messages. By the way, you can intercept them at a variety of times a day with that.

[00:11:30] Adam: Absolutely, the most important two words you said in that last paragraph was, “Your customer.” Here’s another way that brands kill traffic at their own places.

They want to go broad and they forget who their core customer is and they don’t stay loyal to that core customer or build on that core customer.

What you said is so smart. “What is your customer doing online? Would they use an app? I don’t know.” That’s not true for everybody, right? Just because you’re a big brand — Outback has an app; do I want it on my phone? I don’t know, I don’t think so. That’s precious data. I don’t know if I want to give it up.

[00:12:10] Dan: Agree, the app world’s it’s own complexity. When I think of, especially for a smaller brand, when I think of how to leverage the web up.

Paid social is a powerful thing, where they intercept people that are in your area, geo-fencing and so forth. Obviously, any kind of geo-fencing with a mobile device is really powerful and again you can test it. It’s not like a television campaign where there’s a big upfront cost to develop the asset, then you have to commit to weeks of advertising in the digital realm that hold what my mantra is test and optimize, test and optimize.

[00:12:59] Adam: Yes. I think you’re making a really good point as it relates to marketing and just getting in there and doing small tests. Then you don’t have to bet the farm on any particular channel or solution.

[00:13:11] Dan: I think the other — you brought up something or a conversation we’re having a few days ago about trends and the changing palates of many consumers.

I think, and you might want to weigh in on this because I know you’ve done a lot of research around this, is how important making sure the flavor profiles, the ingredients you’re using, are that which just can drive traffic, can really attract people to say, “I got to try that, that sounds interesting.”

[00:13:44] Adam: Right. Which one of those things drives trial or drives a single occasion versus a lasting customer that came in and was convinced that you really got it, so in 2016, going back into 2015, we saw an investment in fish brands that are selling poke. Poke – I don’t know how to say it, I think it’s poke – and really, having these dishes that are really kind of new ones for QSR or fast casual, not your usual, if I’m going out to lunch and getting Quizno’s or Roy Rogers as listed here in your notes.

That’s a different animal. How does a brand – the reason traffic dies is that becomes a trend and a brand like Arby’s can’t add that, a brand like most QSRs just can’t add something that new ones to their menu. That concept is built around that and there’s five or 10 of those, those that’s with the new hamburger trend.

[00:14:44] Dan: Right. Agreed but what brands, mature brands can do? Like in Arby’s like you mentioned before, is start experimenting with ingredients, building on there, so they — we all know what their platform is, we all know it’s the roast beef so, what can you do that roast beef sandwich to get that consumer to say, “That sounds interesting, I want to get in there.”?
I can’t remember the last time I was at an Arby’s but that’s me.
But you’re seeing a lot of that today and I think it’s smart because it’s A) It gives people a reason to come in, B) It’s probably on trend and I’m not talking about Sriracha.

[00:15:30] Adam: Right. Let’s just add something from Sriracha. I think it’s everywhere, it’s overexposed.

[00:15:34] Dan: It’s done and unfortunately.

[00:15:36] Adam: It’s the Deflategate of condiments.

[00:15:39] Dan: Exactly.

[00:15:40] Adam: I’m tired of hearing about.

When we talk about that kind of innovation, that kind of menu innovation, of figuring out what’s the ingredient or what’s the flavor profile of poke that makes sense at Arby’s or — Arby’s is a tough example for that, but for Subway, how would Subway integrate some kind of a pacific fish in to their menu without throwing out their customers?

Strong brands that stay dominant figure out how to intelligently take baby steps towards that and say our customer is X, this is the trend, we can do something with soy sauce and some kind of a fish product and make a collection of pacific sauces. That is made up, I have not seen that yet but that’s probably along the lines of how they would go to that trend to make it work for their process and make it work for their customers.

[00:16:30] Dan: Yes and they — and again your size matters. You know for sure that Subway and other brands are testing products. That they are indeed going on then they are testing them on limited a number of stores to see the receptivity to it and then they can roll it out.
You talk about the Asian flavor profile, probably something you would want to start in the west coast and test and you wouldn’t probably go straight to Tuscaloosa with that.

[00:17:03] Adam: You may never, you may never bring it to Tuscaloosa.

[00:17:06] Dan: Yes. Again, that you can test and optimize in flavor profiles as well with your customers and offer a small bite of that item as they come in, maybe they order the same thing every time but say, “Hey would you like to try this?” It’s a good way to test. Use your customer base to test new flavor profiles, new ingredients to your point and let them tell you if they think it’s something worth carrying.
[00:17:36] Adam: Right and see if it makes sense with the rest of your menu and your concept so that they’re not confused. I don’t think Wendy’s or McDonald’s will ever sell anything that does not taste good with French fries. That’s got to be the gold standard for their menu test.

[00:17:50] Dan: Right, good point.

[00:17:52] Adam: Another way that brands can continue to keep traffic up, marketing is definitely important, staying top of mind and keep from being forgotten is one thing but keeping experience is really tight and having that strong service, so focus on service and focus on changing and adapting service to keep it strong across these changing behaviors.

As we change as consumers, our expectations are different as fast causal has swept in across the country with hundreds of new concepts. That’s changed what I think when I go to a QSR and it’s also changed as the numbers show what we expect when we go to a casual dining restaurant. So how do you adapt there?

[00:18:34] Dan: I think that the service mindset has been lost to a certain degree. I think it’s because there’s just — again proliferation, you’re fighting for staff, fighting for quality staff, experienced staff, if you’re QSR you’re employing younger people with not, maybe that committed to the brand.

I think there’s a huge oversight in how were training and really reminding them what a great experience is and that can kill traffic in a heartbeat. I went there, the sandwich was fine but the experience, the service experience was terrible. That’s a reason not to go back, I don’t want to be treated that way again, I don’t want to wait that that long again. There’s so much damage a poor service experience can do to traffic.

[00:19:34] Adam: A lot of times it’s not even something that went wrong during the visit.
You get marked off if the person at the counter just doesn’t have the light of life, I call it. Their sort of look — they give you the dead eyes when you’re saying something like, “Hey is there any way I can get this table wiped off?” and they’re like “I don’t know.” It’s not necessarily doing anything wrong but they don’t hop to you and say “Yes, let me get that for you.” The table being dirty is not a problem until it becomes a problem.

[00:20:06] Dan: Right.

[00:20:07] Adam: That comes down into service and operations and training I think; that kills traffic. I don’t want to go back and deal with that and have to clean the table myself or ask somebody who’s going to be obstinate about it. I don’t want to deal with that.

[00:20:20] Dan: Don’t forget cleanliness man. These things sound so fundamental but I dine out a lot obviously, not obviously but I dine out a lot and I’m pretty fastidious about the cleanliness thing. I hate going somewhere and sitting down and there’s food on a chair or they just haven’t wiped the table so you’re sitting there getting a napkin and wiping and so you can sit down and have a cup of coffee and a bagel at a bakery. That’s just a bad experience right from the get-go.

[00:20:56] Adam: Right. That’s not good.

[00:20:58] Dan: One of the reasons I’m actually at the restaurant is so I don’t have to clean up. [laughs] If I’m cleaning up your place, it’s a stinger man. I think we underestimate the damage it can do.

[00:21:10] Adam: I am — let’s see here. I actually did a poll about cleanliness just last week.

[00:21:19] Dan: It’s next to–

[00:21:20] Adam: And I’m looking at it’s next to godliness exactly. I’m trying to find results here and I’m not going to be able to find them in real time because I’m a bit of a stiff. But the question was: which one of these pieces of the restaurant experience sticks with you the longest? Kind of impacts your next visit. It was service, cleanliness, speed, environment. I threw in environment just to see it if will trick people. Cleanliness actually finished third.

[00:21:49] Dan: Interesting.

[00:21:50] Adam: I was testing for — That was my real — what I wanted to see if that lever turned. I pinged a couple people said — you don’t care if the place is clean? That’s not important to you? They said, “Well, it’s kind of table stakes and so yes, I guess it is important.” But it’s not top of mind to say it until someone says the place can be dirty. Well, it’s either we talk about a sticky table or a filthy bathroom.
[00:22:13] Dan: Either one.

[00:22:15] Adam: Yes. You tell me.

[00:22:16] Dan: I hate a filthy bathroom. Yikes.

[00:22:19] Adam: I also hate sticky tables.

[00:22:19] Dan: [laughs] True that.

[00:22:21] Adam: I don’t want to my shirtsleeves sticking down to the table.

[00:22:26] Dan: Exactly.

[00:22:27] Adam: All right. Well, I think we have gotten through this topic. Why does traffic die at restaurant brands? Please, if you have more questions, you want to keep the conversation going, please you can find us on Twitter @FandRM. You can also email either one of us dan@foodandrestaurantmarketing.com or adam@foodandrestaurantmarketing.com. Please leave notes and reviews in your podcasting app if you’re if you’re listening and you can tell us you hate it. But just leave a note. We love it.

[00:22:56] Dan: I love when people tell me they hate me.

[00:22:59] Adam: I’m getting used to it.

[00:23:00] Dan: I can only get better.

[00:23:02] Adam: Yes. There you go. All right. Well, thanks for listening.
[00:23:05] [END OF AUDIO]

Transcriptions by Go Transcript.

Listen to the episode here.

discounting, coupon, offer, FSI, LTO, daypart