In recent years, chain restaurants have faced unrelenting pressure from external competition. While foods costs have been relatively stable, restaurants have had to raise prices on menu items – partly due to higher labor costs. Fewer people have been dining out for various reasons, which has led some chains to shutter underperforming locations. According to Franchise Times, only 3 of the top 200 casual dining chains reported considerable sales growth in the last year.
We wanted to understand why the chains experiencing growth are doing so well and what we found was not at all surprising. It was all about value – they brought back customer favorites and offered low price menu options.
It all seemed a bit too simple, so we decided to investigate further – but this time hone in on what drives customer loyalty for diners who live within the Mspark mailing geography.
The data we present here offers a few clues to the mindset of diners in our region and how restaurants can attract more of them with a solid marketing mix. Let’s look into the recipe for attracting loyal diners to your restaurant.
What’s on the Menu Matters
One thing that has worked for chains who’ve had recent sales growth is bringing back familiar menu items that were crowd favorites. When we looked at survey data for all chains, menu selection was one of the top reasons consumers gave for restaurant loyalty.
In fact, the percentage of consumers who cited menu selection this year, grew 3% over the previous year. When we narrow that down to consumers who dine most often at one of the top performing chain restaurants, menu selection was also high on the list and had grown an astonishing 25% this year over last year. This means that what’s on the menu matters and finding what matters most to your customers, as it relates to your menu, should be something that is a part of your messaging.
Quality of Food Matters
Another reason that consumers indicated for restaurant preference was the quality of the food, apart from appealing taste. As it turns out, these consumers place value in fresh ingredients and food that is cooked and presented well.
This year 36% of consumers indicated food quality was a factor in restaurant loyalty, up 5% from the previous year.
So, if you’re a chain restaurant, and If the quality of your menu options is a point of pride for your chain, make it known in all your customer touchpoints.
Who You Target Matters
In the Mspark region, there are many opportunities to appeal to prospective customers and increase foot traffic to your restaurant, and we’re here to help you target to attract the best diners. Read more on our targeting here.
Our mailing geographies tend to be areas outside densely populated cities. Some underestimate the power of mailing to these areas because of assumptions about residents, for example assuming they are older and therefore less likely to dine out. Older residents in our geography do not dine out as often – but look at the average monthly visits and average spend per visit for younger age groups in our region.
This illustrates the importance of targeting and how your chain can save in advertising costs, while boosting effectiveness, simply by targeting appropriately.
Your Marketing Mix Matters
What have we learned? If you’re targeting your campaigns well and using messaging that resonates with your audience, like promoting crowd favorite menu items along with messaging around quality ingredients, your chain will be better positioned for sales growth.
For consumers in our region, direct mail advertising was cited as one of the top influencers for dining out purchases.
- When compared to TV/broadcast media, 10% more consumers indicated direct mail was influential on purchases.
- When compared to social media, 68% more consumers indicated direct mail was influential on purchases.
- And when compared to newspaper media, 118% more consumers indicated direct mail was influential on purchases.
While direct mail was cited by consumers as being more influential for dining out purchases, we want to stress the importance of incorporating direct mail as part of your media mix..
We know that cross-channel marketing can increase response rates by 35%. Industry average response rates for direct mail, according to ANA / DMA are currently 9% for a house list and 5% for a prospect list – numbers that have risen substantially over the last several years. It’s clear that better targeting using quality data, combined with a well-designed marketing mix, is having positive effects on marketing campaigns, overall.
We have a long history of working with restaurants and can provide guidance for your messaging and targeting strategy, as well as share best practices for using direct mail in your integrated marketing strategy. Check out our restaurant success stories for inspiration.
Prosper Insights & Analytics 2019