Even before a global pandemic transformed our world, the restaurant industry was challenged. After a small, but hopeful start to the year, the Covid-19 outbreak occurred and likely changed the industry forever. While the pre-pandemic reasons seemed easy to identify – increasing competition, declining guest counts, the emergence of third-party delivery, unpredictable millennials, just to name a few – they were so much harder to solve. To make it more challenging, the new consumer purchase journey has required brands to rethink how they find, engage, and ultimately activate their guests. The solution is the right mix of marketing, but that is so much easier said than done. Some franchisees have been marketing to the wrong customers; some have been using the wrong media; some haven’t been marketing at all. With shrinking sales, franchisees are now also forced to reassess their ad budgets, magnifying the struggle. During challenging times, it is natural for many owners to make quick, emotional decisions that lead to massive shifts in how they connect with guests. As a franchisee and small business owner, it’s important to understand your options before changing your marketing plan. Here are some commonly heard, and concerning, phrases regarding local advertising strategies, along with some ideas on how marketing can help you start reaching the right customers.
“I don’t need to advertise to my customers already coming in”
This usually comes from owners that are using data in some form. First, knowing your customers is important. If you are using sales data to make marketing decisions, you are ahead of the game. If you’re not, that’s OK; but start considering it. Data is such a powerful tool. Now the concerning part of that statement – you cannot solely rely on your best customers to drive the traffic and sales necessary to succeed in today’s climate. The widely documented traffic struggles of the industry prove that your regulars are not enough, especially with an environment in which dining out options, and switching, are so prevalent. In order to make your local marketing more powerful, use sales data to not only personalize the experience and drive additional visits with current customers, but also identify and reach the neighborhoods of low-customer penetration to entice incremental visits. Worried about incentives killing your margins? Don’t. Prosper Insights & Analytics tells us that quick service restaurant (QSR) coupon users actually visit more and spend more than non-coupon users.
“The corporate national TV is all I need”
Relying on TV will not be enough. With the 2020 presidential election just around the corner, franchise brands who depend on national TV spots for brand awareness should consider additional media channels. An estimated 30-40% of ads are bumped in favor of political advertisers, according to a report by Kantar Media. Even if cable and national spots are not bumped, the political environment on TV will create a great deal of “noise” while brands are trying to connect with guests. The pizza commercial that is sandwiched between three political ads may not be as effective as it was in prior years. Due to the risk of limited inventory and increased ad bumping, local marketing will be critical to make up those lost impressions. For example, one pizza brand drove nearly a 3% lift in sales by complementing a national TV strategy with localized advertising, while the franchisees choosing to rely solely on TV saw a 3% decline. TV can still be an important part of your strategy, but it cannot be the only part.
“I’m switching to 100% social media marketing”
We get it, you want to hit Millennials and Generation Z. They are the two largest current U.S. generations and together possess massive spending power. And what’s a better way to reach them than through their personal devices? Social media allows you to connect with your guests by telling stories about your brand and highlighting local community efforts. However, it is not a silver bullet. Multiple touchpoints, compared to a single-media strategy, are proving to be more impactful. A recent Gartner study notes that while many marketers rely on social media and organic channels to drive conversions, a broad mix of channels and content are required to maximize demand conversion. Social media can be a relevant way to connect with your guests, but do not become solely reliant on these platforms to drive traffic and sales.
“I don’t have the money this year for local marketing”
The most concerning phrase of them all. The idea of “saving to profitability” is unfortunately not a new one, especially when it comes to franchisees. Oftentimes, marketing budgets are the first to be cut, because owners simply cannot cut labor, product, or utility costs – making fries by yourself in the dark is probably not the best strategy. But neither is going dark with your local marketing efforts. In September 2019, Forbes published an article warning of past times when brands moved away from marketing during financial crunches. Regardless of the industry, history has proven that it’s a mistake to stop speaking to your customers during hard times. This strategy will impact not only short-term sales, but also long-term market share, which is much harder to recoup.
Rather than a massive cut to marketing spend, focus your dollars on strategically-planned media that proves a return on investment. The most successful cost-conscious franchisees are employing a cost-effective media solution to stay relevant in the marketplace and drive incremental guest visits. Work with media partners who can help you gain a deeper understanding of your current consumers and build strategies to entice new ones. Consider offline and online data sets – in-market signals, past purchase behavior, media preference, and demographics – to drive specific and focused marketing plans that ensure you are engaging the right consumers, at the right time, with the right offer. Your business is too important to sit idle and hope guests come in, especially when times are tough.