“Our guests won’t care about a small discount.”
“The only way to get our customers to spend more is to give them more.”
“Big promotions are the only way to big sales.”
Tillster Loyalty & Technology Solutions:
· Customer data platform (CDP)
· Loyalty platform
· Email & push notifications
Encouraging dormant guests to make a second purchase has long been a frustrating, time-consuming task for restaurant brands.
For a North American pizza chain with over 450 locations nationwide, this was no different and turned to Tillster to help craft a loyalty campaign that would revitalize one-and-done guests.
The Tillster Marketing team first noticed a significant drop off in participation after customers had placed their initial order from the guests’ data, so the team went to work creating an automated program to help customers build a habit of ordering from the brand.
To address the large volume of one-and-done guests, a targeted loyalty campaign leveraging Tillster’s CRM offering via email marketing and push notifications would be used. Specifically, guests who had not made a second purchase within a few weeks after their first would receive a bonus after placing an order. Then came the tricky part, “what do we offer in terms of loyalty and how much should we offer?”
Initially, giving away a higher offer amount was seen the best path to success to get customers to come back quickly, despite knowing profit margins would be reduced. While big loyalty promotions can certainly drive results, Tillster had run similar programs and learned lower value incentives can consistently meet revenue KPIs equal to that of larger promotions.
Showing doubt in the proposal, the teams agreed to run a test to determine which amount of loyalty points proved to be most effective. Tillster split the audience in two, offering half of qualifying users the higher point bonus and the other half the lower point bonus. Upon conclusion of the trial, the two offers produced almost identical results. As a result, the higher bonus was sunset saving the brand half of the associated cost.
The challenge of identifying the optimal offer set is not unique to loyalty. Working with a global burger brand Tillster identified that many customers went dormant every month. Tillster suggested that they introduce a win-back campaign to recapture customers showing signs of attrition. When the brand’s leadership asked to issue a free sandwich to the dormant customers, Tillster suggested running a test to see if different offers would yield different results.
The test featured sending one of three offer sets to dormant customers:
Control: No email
Offer Set 1: No Offer (an email without an offer)
Offer Set 2: Low-Value Offer (an email with a coupon for Free Side)
Offer Set 3: Hi-Value Offer (an email with a coupon for a Free Sandwich).
As a result of the test, the burger chain learned that simply sending an email without an offer would more-than-triple reactivation rate and would garner similar sales volume as the original Free Side offer. It was also learned that the Free Sandwich offer would yield another significant bump in sales. As a result, Tillster built a two-step win back program where the initial communication did not feature a coupon, and the second message featured a coupon for the free sandwich. This led to significant savings in coupon cost for the brand while increasing reactivation rate by a substantial amount.
The Takeaway
Oftentimes restaurant brands believe they need to give away a lot of value to activate customers. However, these tests indicate that even a smaller offer can generate great results. Because sometimes all it takes is a simple nudge to remind guests to come back for another visit. When evaluating how to best engage customers, restaurants should test offers to ensure they’re getting the best return on their investment.
Want to learn more about Tillster’s loyalty or technology solutions?
Request a demo to learn how our tailored digital ordering, loyalty and tech solutions can help increase revenue for your restaurant brand(s).
