Limited-time offers (LTOs) appeal to a broad demographic and are particularly popular with younger consumers, according to a 2014 survey of Canadian and U.S. restaurants conducted by Technomic Inc. It said 48% of consumers tried a limited-time-offer menu item in the past month and more than three in 10 of those ages 18 to 44 had ordered one in the past week.
Millennials and Gen Xers view LTO consumption as something of a status symbol; half of them agreed that they enjoy being the first of their friends to try an LTO menu item.
We asked several Gordon Food Service experts for advice on how operators can best capitalize on the appeal of LTOs.
“Lack of planning is the biggest mistake operators make when it comes to LTOs,” says Nova Scotia-based District Sales Representative Dave Deveau. “Research is the key. What do your customers say about you? Talk to them, read their comment cards, check your Yelp reviews.” You’ll get a good idea of what they like and expect from you.”
“Restaurants have to keep innovating, even as they stay true to their basic menus,” says Steve Busque, a Boucherville, Québec-based District Sales Representative. “An LTO can help with that by offering something essentially new and slightly different from the norm.”
You have to stay true to your brand. “But you also want to try things you wouldn’t normally put on your menu,” Deveau says. “People are coming to your restaurant because they have confidence in what you do.”
“Watch the chain restaurants that have unlimited budgets and have done extensive marketing research,” advises British Columbia-based District Sales Representative Pam Endrizzi. What are they offering? How are they promoting it? “Don’t copy them, just use their efforts to spark ideas of your own,” Endrizzi says. “You don’t have to reinvent the wheel.”
“Take advantage of items that have seasonal value,” suggests John Barbara, an Ontario-based District Sales Representative. “Look at what you can get a plentiful supply of in season, but is then gone for 10 to 11 months a year.”
Ottawa-based District Sales Representative Duane Keats recommends gearing LTOs around holidays and festivals. People are in a celebratory mood and often are willing to spend more money on something special.
“Social media is a given” for promoting LTOs these days, Keats says. But table tents and other in-store promos are also essential. “You already have the customer in your restaurant, so give them information that might entice them to come back.”
However you choose to promote the LTO, “You need to invest in quality photography to depict the dish,” Deveau says.
Staff involvement also is critical. “A special is only as good as the server selling it,” says Winnipeg-based District Sales Representative Erica Instance. Train staff to recommend the LTO to each table.
“Price LTOs as high as possible,” says Winnipeg-based District Sales Representative Carl Habeck. The goal is not to discourage sales, but to build the perception of a special. Resist the temptation to offer low prices just because of a great deal from the distributor.
“If you offer an LTO at a low price, your customers are going to expect that price if you put the item on your regular menu,” Barbara adds. “So you’re just setting yourself up to lose money long-term.”
Stilwell suggests structuring LTOs that appeal to customers’ social interests. For example, “The Ocean Wise program we promote via Albion Farms & Fisheries and the Vancouver Aquarium focuses on seafood that hasn’t been overfished, and makes it available at peak times.” Publicizing your seafood LTO as a sustainable choice leaves the customer feeling good about it.
Another Stilwell idea: Donate a portion of each LTO sale to a community cause. The profit margin won’t be as high, but you could make it up in volume.
“Create a sense of urgency: Get it now or it will be gone,” Endrizzi says. You may be tempted to continue a hot-selling item beyond the announced end date. “Don’t do it! … keep them wanting more.”
Marc-Antoine Beauchesne, co-owner of TopResto Group, which operates restaurants and pubs in Québec, tailors his approach to LTOs according to customer base. His Batinse Cuisine D’icitte restaurant is in a tourist area, so “we choose to use a longer and less aggressive LTO mixed with a distinctive touch. In a tourist environment, it is more about the originality of the LTO than the discount attached to it.” As an example, he cites “Batinse’s Tourtière,” a special meat pie available every year during the holidays.