Case Study: P.F. Chang’s Jumps Into Location-Based Marketing

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P.F. Chang’s China Bistro is giving away free happy hour dishes to customers who checked-in on Foursquare, Facebook, and Yelp this summer as a way to promote its new Triple Happiness Happy Hours. Brand director Dan Drummond says location-based marketing was a no-brainer for the national restaurant chain, although the learning curve for the company’s mainstream customers who aren’t familiar with check-in applications has been steeper than he originally anticipated.

What is the new check-in special and when did it start?
Customers can check-in on Foursquare, Yelp, and Facebook, and the food specials vary. Most of [the specials] are first-time check-in specials, but the Foursquare app also has a frequency-based check-in special where another reward is unlocked after every three visits. We just started it on Monday, August 22nd. This was launched with an initial focus on our Triple Happiness Happy Hours menu, and to drive awareness to that. We see it is as ongoing. Being that it’s only a week out, and it’s really still in the test phase, there is no end date.

Where did the idea for your new check-in specials come from?
As we were looking at our marketing plan and strategy for 2011, we really made the conscious decision to focus on a digital strategy. There are a number of drivers behind that, but really looking at how we can leverage websites, micro-sites and social media in communicating information and new offerings to our guests. As we look back, our brand was largely built on word-of mouth over the past 18 years, and social media is sort of word-of-mouth in 2011. We started to get interested in how we could leverage that as we come out with new ideas, for example, our Triple Happiness Happy Hours. We know our guests like to talk about us—and the brand is very social—so one of the things that popped up was the idea of offering check-in specials. It’s our first effort into it, so we’re really testing the waters to see how it works for us and what changes or tweaks we will need to make in the future.

Have you run up against any challenges in implementing such a large-scale LBS promotion?
The interesting part is the feedback we’ve gotten from people who are enthusiasts and check-in everywhere. They really like it and think it’s cool that a national chain is embracing this technology. We’ve also realized that there’s a huge learning curve for a large number of people who aren’t familiar with how the check-in procedure works. We’ve had folks just going to Facebook [and posting], “I’m checked in.” It’s like, “no, no, no.” Our social media guy has had to go back and say, “It’s not just posting here. On your mobile phone, you go to Facebook, you hit ‘check-in,’ then the offer comes up and you show your server.” We’ve had a lot of questions and a lot of uncertainty there. We’re kind of surprised that the learning curve is as steep as it is. I shouldn’t say really surprised, it’s one of the things that is really coming to the forefront. There’s a huge learning curve and opportunity here.

How about in terms of getting your staff on board? Have you had any challenges in that regard?
Not really. Not as big of an obstacle as one might think. We have a dedicated social media person, so he scheduled conference calls with our market partners and then had individual calls with any of the locations that wanted additional information. He put together a presentation, walked everyone through why we’re doing what we’re doing, and how it works from the guest’s perspective. If you boil everything down, all the server needs to know is, if a guest show’s me something, here’s what I’m looking for. They’re instructed to let the manager know that they have somebody there that’s checked-in and has the offer, and that’s a great opportunity for the manager to come over and have a conversation and thank them for participating and for checking in.

Do you have a sense of which platforms people are using to check-in most frequently?
We’re getting more responses from Foursquare. I guess Facebook announced they’re going to back away from Facebook Places and the check-ins. It’s still working, but it’s almost like they’re waving a white flag that Foursquare and some others have an upper hand on the check-ins. It’s interesting, because we’re getting more feedback now on Facebook, just because people post to Facebook, than we are on Foursquare. But we’re getting more activity on Foursquare.

Are the people who are redeeming your check-in specials any different from the customers who’ve redeemed coupons in the past?
We don’t have that information right now. Our initial indications are that it’s a younger group, which is perfect for happy hour. The 20-somethings into their early 30s, we want those folks [for our] happy hour crowd, typically just because of the life stage they’re in.

What are you specifically trying to accomplish with this campaign?
The message is definitely around the Triple Happiness Happy Hours. We were looking for ways to get people into the restaurant to try the new Triple Happiness drinks and food. The check-in is a great thing. It allows us to communicate to the guests when they’re in close proximity to the restaurant, or even when they’re making the decision of where they’re going to eat. If they’re checking into a mall, or if they’re checking into a competitor next door and they see our special, that could potentially divert them to come over to P.F. Chang’s. It really gives us a unique opportunity to talk to them [when they are in] close proximity, as opposed to sitting at home 15 miles away, communicating to them through traditional advertisements.

Looking forward, how do you see location-based services influencing the advertising practices of businesses like P.F. Chang’s?
One of the things we’re really looking forward to in the near future [is] text messaging based on geo-location—communicating offers, or just reminding [customers] about P.F. Chang’s. As smart phones continue to proliferate, I think location-based communication is just going to get more prevalent and become more important because it affords you the opportunity to hit somebody when they’re in very close proximity to your location. Not a lot of folks have completely jumped in. We made the decision to jump in with both feet and really go after this digital space to see how hard we can make it work for us and bring value to our guests. So, we’re definitely taking the plunge.

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This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.