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In the teeth of the recession, Back Yard Burgers developed a new, slimmed-down marketing strategy. The roughly 200-unit, Nashville, Tennessee–based chain cut costs across the board, developed a slick-looking website, and created a social media strategy centered on Facebook and Twitter.
But Ken King, a senior consultant with National Restaurant Consultants Inc., says this was a disaster.
“Their same-store sales in some stores are down as much as 20 or 30 percent,” King says. “They’re just not reaching the public at all.”
Marketing on a budget isn’t an easy thing. Although some concepts have been able to reduce their expenses while gaining sales, others have discovered that cutting can be dangerous. Figuring out the balance requires careful planning and a willingness to learn from the mistakes of the competition.
Cheap Marketing Gone Wrong
Experts say that quick serves should never use a cheap marketing strategy that compromises the brand image. John Keuning, creative director for Out There Advertising, has worked on several campaigns for the Steak Escape chain. He says that while easy-to-make coupons can get people in the door, it will cost a concept in the long run.
“Get out there and highlight the benefits of your product, but don’t do it by discounting,” Keuning says. “As soon as you start discounting to get traffic, people will start to expect that they’ll get that deal every time.”
Another common mistake operators make when marketing is to stick to their strengths. One expert says streamlining marketing so it only focuses on one main item can be a serious blunder. As CEO of the Pacific Management Consulting Group, John Gordon has seen chains struggle because they ignored certain dayparts, like breakfast and afternoon snacks.
“The reason why McDonald’s has been able to take their commanding position in the fast food hamburger segment is that you can get snacks and food items of any type at any time of day,” Gordon says.
Finally, quick serves cannot skimp on the implementation of marketing efforts. Although no one sets out with the intention of doing a half-hearted job, some companies end up budgeting so little for marketing that they’re unable to complete what they start, says Melissa D’Aloia, account executive for Out There Advertising. She says that was the case with Out There’s initial efforts on Facebook.
“A couple years ago, when we entered social media with Steak Escape, we didn’t dedicate enough resources to it,” D’Aloia says. “It didn’t really have much of an impact.”
The lesson for operators, D’Aloia says, is that it’s better to carry through with a small-scale plan than come up with a big plan that operators are not ready to pay for.
Cheap Strategies That Work
As Back Yard Burgers discovered, saving money on marketing isn’t simply a matter of cutting back. Instead, it involves rethinking the whole idea of marketing.
King says one of the most efficient cheap ways to get a customer interested in a product is to hand him a sample. Free food generates warm feelings toward a brand, and it gets customers hungry for more. Garbanzo, a Denver-based Mediterranean concept, used this strategy with great results in its stores, King says.
“Talk about guerrilla marketing,” King says. “When you walk through the door, an employee hands you a falafel ball. Look at Chick-fil-A—they invented that model by having a girl handing out a piece of fried chicken in the mall.”
Attention-grabbing signage can also be a successful cheap marketing method. Simple signs that advertise new products or encourage a combo meal are one of the most effective methods of generating additional business, Gordon says.
“Point-of-purchase (PoP) materials are No. 2 or No. 3 in the total scheme,” he says. “In-store PoP posters [and] outdoor PoP is right behind television and radio.”
Loyalty programs are now entering the world of cost-sensitive marketing as well. Though card-based loyalty programs failed to capture the mass public’s attention and were costly investments, new technology is making loyalty easier—and cheaper—than ever to implement.
QR Loyalty, which launched publicly in September, helps brands build loyalty with a vehicle they already have well in stock: receipts. The company provides a specialized QR code on receipts for customers to scan with their smartphones. As consumers collect points by scanning, operators collect information on their purchase habits.
“It enables the restaurant owner to remarket to those customers knowing what their preferences are,” says Nigel Malkin, cofounder of QR Loyalty. “If you have someone who only orders chicken or vegetable dishes, you know how to market to those customers. That kind of customer data is incredibly valuable.”
Malkin says QR Loyalty’s pay-for-performance program costs slightly less than 1 percent of an operation’s gross annual sales after adding up its licensing fees and the rewards given out, but that it can generate a sales lift of 5–10 percent.
Of course, operators who truly want to streamline their marketing can trade time for money.
“If you’re not going to be putting an insert in the paper, send [workers] out,” Keuning says. “Do doorhangers, put them in windshields, etc. Either sweat equity or money, it’s going to take one or the other.”
Some local stores become destinations for kids’ birthday parties, some provide food for events, and some have special incentives for mall employees. This September, a Steak Escape location in Sacramento, California, had success by commemorating an important moment in its own history.
“[They] chose to do an anniversary celebration and they had their entire crew fired up about it,” D’Aloia says. “Through that excitement they have seen their store sales increase in a very slow month over 20 percent.”
Cheap marketing strategies ultimately depend on the quality of the product. Poor service or mediocre food can drive even the best-marketed property into the ground. On the other hand, a very good company can pull off the ultimate frugal marketing move.
Just ask Mary McLeese, brand manager for Five Guys Enterprises. The burger-and-fries chain became a national name solely by word of mouth.
“We do not advertise at all,” McLeese says. “[And] we advise our franchisees not to advertise. If you concentrate on the customers and concentrate on the food, it will grow naturally.”