The idea of couponing, LTOs and promos was to entice consumers on the edge of making a buying decision – mostly used during occasions when they were less likely to buy. But it backfired for most QSRs big time.
Couponing, LTOs and promos trained the audience to buy when and only when they had a discounted offer. When that happens, your audience takes control of your sales. You might see an increase in revenue, but your margins will suffer.
There are very few successful, growing QSR brands that don’t offer any coupons, LTOs or promos. They focus on their core values. Why? Because they know that discounting devalues the brand. You become a utility, not a valued, added inspiration to your audience’s life. Worse yet, you’ll be plagued every month trying to figure out a new LTO or promo. The cycle will never stop.
However, coupons, LTOs and promos in some cases can be very powerful. Here are six simple strategies for successful couponing, LTOs and promos.
Make sure your product offering is really special and is something people will drive across the country for – the McDonald’s McRib is the perfect example. But if the product is only mediocre, don’t offer it. Do not follow, force or make up flavor trends – not for LTOs. This isn’t the time to test new recipes.
Don’t create an offer that is only going to lure your core audience. They already go to your store, so adding another offer is unlikely to drive them back for another occasion. It’s the law of diminishing returns – you can only eat so many hamburgers before you’re sick of them and want a burrito.
Make the offer something that attracts an audience looking for something new. This will drive the incremental revenue you wanted and will likely create a new fan base.
Don’t discount the offers. Charge full price. Your audience already assumes by the definition of a discount that they’re getting a deal. They don’t know any better. This is where insightful human behavior becomes important.
Combo meals are old-school concepts that don’t work. Sure, you priced it out so you’ll make a little revenue by sheer volume, and it might be perceived as value and convenience. But people don’t think that way. They want flexibility and variety. You’ve seen it: people order a combo meal and then ask if they can substitute one of the items instead of what comes with the combo. It’s inefficient.
Coupons, LTOs and promos should be available for two to three weeks. Any longer and visitation drops off. If your advertising and media is inspiring, you’ll drive visits quickly. Yes, your audience will be sad when the offer is gone, but it’s like Christmas – they’ll be excited waiting until next year because they’ll know it’s coming.