3 ways to maximize LTOs using scarcity bias

Limited time offers (LTOs) are effective because people believe they won’t be able to have that meal after a certain period. This activates a mental state called scarcity bias. Airline websites are the best at activating scarcity bias to sell a reservation. You’ve no doubt noticed the call out reading “Only 2 seats left at this price,” which creates an urgency for you to book before the person logged on across town does so first.

scarcity, traffic, demand, brand
Only 3 left at this price!

McDonald’s has an annual goldmine in the McRib. By offering it each year as an LTO, they create excitement and demand that wouldn’t likely be sustained for a permanent menu item. Consumers have told us they don’t plan much for most of their dining occasions. The LTO has to earn a date on the calendar for your brand.

Most restaurant brands intend LTOs to drive traffic in a contained window. Either explicitly or in small type, they’ll identify that is is available for a limited time only. But the assumption is made that consumers register the expiration date on the offer. Without that information, it is unclear that the offer is scarce.

1. How long is limited?

As consumers continue to be buried in ad messages, it gets harder and harder to retain information. When preparing ad communications for an LTO, marketers tend to look at the pieces in a vacuum. Consider all the noise around the piece. There are several key facts that the viewer must take away to be drawn in. First and foremost, how long is limited?
Most brands hide the end date. Test making an end date visible. Consumers will have a timeline to fit the offer into their schedule.

If the offer goes ends up exceeding the end date, it can always be messaged as a positive. Extended due to popular demand.

Be aggressive about reminding your audience that they might miss their chance to try this or have it one last time.

2. Make LTOs special

There are unlimited options. Every day, people can get whatever they crave. It’s important that your LTO has something unique in the market if you want to capture new customers. How unique? Unicorn Frappuccino different. Getting attention isn’t easy. If the brand is focused on scarcity as a strategy, create something hard to find.

If the offer is intended to earn extra visits from current customers, the offer can be something a little less out there. But it has to stand out enough to draw interest and make them put a date on the calendar.

3. The end is near

If every brand were buying network television, this would be terrible advice. But with digital and social channels, updating creative with reminders is affordable and effective. Now that the end date is clear, be bold. Add a count down to digital creative. Be aggressive about reminding your audience that they might miss their chance to try this or have it one last time.

Not ready to be so bold? Test count down messaging for your next offer exclusively with paid social. It can be targeted to a specific area – from a DMA to a single store. This test can inform future approaches and expanded based on results.

Is Discounting Getting People to Like Your Brand?

Every restaurant brand discounts to drive traffic or sales. We look at the ways consumers understand discounting and couponing and how they react to each. Hint: It’s not always good. Dan and Adam dive in to LTOs, FSIs, dayparting strategies and some behavioral economics.

Ready to join us? Let’s go.

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