Marketing's from Mars. Operations, Venus.

A Look at LTOs In the Casual Dining Space.

For the successful launch and execution of an LTO for those in the casual dining space, alignment across all departments is more critical than ever. The marketing message has to drive guests through the door, purchasing has to have extra product ordered to fulfill demand, and servers have to be scripted to continue the “sell” once the guests are at the table. So why do so many LTOs fall short of at least one department’s expectations?

Depends on who you ask. 

In the summer of 2009, we were running a $5 burger promotion for a client to keep up with the other $5 offerings out there - $5 footlongs, $5 entrees, $5 for two apps, $5 for an app plus entree - the world was going crazy for $5 meal deals. After all, if everyone was doing it, it had to be successful, right?

The ads were placed, in-restaurant merchandising was all fresh and new, extra patties, buns, lettuce and tomatoes were ordered and the servers were trained on the new pricing. And that’s where the promotion started to unravel. The average check prior to the promotion was just over $12. Let’s be generous and say every guest tipped 20%. All of the sudden, as the promotion launched, the check average was cut in half and so were the tips. So what was a good deal for the guest became less of a good deal for the servers.  So, they stopped selling it at the table. Which meant all that extra product sat, and sat and sat…

Long story short, the promotion was initially successful as it drove plenty of new guests but no one was really in love with the end results. The CEO was expecting a big lift in new guest count which would offset some of the lower checks through volume. Marketing thought they had done the job they were asked to do because people were ordering the specific menu item. Purchasing was more than prepared with product. And servers were excited about all the new traffic that was supposed to come through the door, but they didn’t realize the “cost” for their time. But to be fair, no one really thought through the income impact of the lower check average for the servers. 

Just recently, we ran a promotion for a limited product versus a limited price. At the end of the six weeks, overall comps were higher, the average check increased fifty cents, the franchisees were happier with increased guest count, servers were making money but purchasing was left with a bunch of perishable product. So while everyone else was happy with the overall sales results, purchasing was questioned about why they had “over-ordered” so much. Fortunately this was more of a core item than specialty, so most of it could be worked back into the system, but what if it had been something that couldn’t have been? 

Hindsight is always 20/20. But aligning everyone at the beginning can be just as focussed and clear. It may only take 30 minutes out of a busy day, but having the right questions asked of the right people at the right time can make a six-week promotion successful for every department involved, not just a select few.  That’s why we use our Brand Convergence Model to plan, execute and evaluate each promotion we run for our clients. It takes guesswork out of the planning and allows each department to be set up for success, and that’s a relationship that everyone can understand.