With restaurants competing for brand loyalty harder than ever before, operators are having to find ways to create unique menu items that will drive traffic. LTOs have always been a great way to create separation from other brands and generate buzz, and they’ve only become more critical during the pandemic.
Even the most basic POS systems can generate reporting that shows if items are generating sales, but operators would be wise to evaluate more than just revenue in figuring out whether or not an LTO is actually “working.”
Derek Rodner, vice president of product strategy at Agilence—a data and analytics platform designed specifically for multi-unit restaurants—explains that there is plenty more information available to operators with modern technology solutions. Possessing all of that information can help restaurant operators make data-driven decisions regarding the creation of LTOs, and help them measure the complete impact they have on the business.
“With Agilence, users can understand how often the item was bought, its impact on order size, which other products were purchased with the offer, and the regions and dayparts that outperformed others as a result of the LTO,” Rodner says. “Furthermore, the data shows the impact on food and labor costs, whether the LTO has had an impact on speed of service or drive-thru times, and performance of other menu items at the same time.”
An example of the effectiveness of Agilence’s platform at the marketing campaign level is exhibited by the fact that recently, one of their quick-serve, franchisee clients was offering an LTO intended to drive midafternoon traffic. Unfortunately, that specific daypart also had an unrelated and ongoing discount promotion running when the LTO was launched. That meant that not only was the client unable to see whether the promotion was the main factor driving the LTO’s popularity, but there were concerns that the discount promotion was also undercutting the LTO’s intended margin and clouding the results of the LTO’s performance analysis.
“Had this client not had the details of what else was included in those LTO transactions, their future LTO decisions would have been based on incomplete information,” Rodner says. “This operator was able to eliminate the second promotion and, as a result, was able to see a higher margin on the LTO and gain clarity about the menu item’s effectiveness.”
One of the key aspects of this example is that the operator was able to catch these conflicting campaigns almost immediately after the LTO was rolled out brand-wide. That real-time generation of analytics is the basis of the Agilence platform, and it isn’t just limited to measuring the efficacy of LTOs.
In addition to helping to optimize LTOs, Agilence has been able to help clients in a number of ways at a time when operators need it most. One operator was able to leverage data in order to shorten average wait times in the drive-thru by 22 seconds. A large multi-unit restaurant brand used Agilence to catch an error in employee meal comps that was costing the client $500,000 a year. Another operator was able to optimize the placement of their bakery cases, which ended up increasing order size by $35 million annually. In other words, Agilence is a holistic approach to making overall operations more profitable.
“In times of uncertainty, waiting weeks or months for each new report just isn’t sustainable,” Rodner says. “Operators need flexibility, speed, and agility of their data analytics tool in order to adapt and make decisions quickly based on data, and that’s exactly what Agilence provides.”
To find out more about whether or not your LTOs are working—and much more—visit the Agilence website.