Case Study: Restaurant Chain Uses Mobile Program to Target Nearby Customers

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54thStWhy do some businesses always seem busy, while their next-door neighbors struggle to draw customers in? It’s a question every merchant has wondered at one point or another. At 54th Street Grill & Bar, a regional chain with 19 locations in Missouri, Kansas, Illinois, and Texas, marketing director Kelly Reid set out to find an answer. She used a mobile loyalty platform called Front Flip to send discounted offers to consumers who’d visited businesses within a five-mile-radius of any 54th Street locations without checking-in at one of her restaurants, and had managers ask those customers why they hadn’t come in before. Here’s more about what she learned.

How do you approach marketing for a restaurant with multiple locations?
It’s pretty uniform. With the email marketing, we may do some variation, depending on if some stores are slower. … If some stores are busier, then we might not give [discount] offers. We typically do a direct mail piece with a very large discount at new locations, or in slower-moving stores. We [also] do a lot of sponsorships and community fundraisers. So it really depends.

Tell me about your new mobile loyalty program. I’m sure you’re approached by marketers all the time, so what was it that interested you about Front Flip?
Typically we wouldn’t have given them a try, because they were new. However, we had never seen what they were showing us before. Front Flip is the first [platform] where we were actually able to have [customers] scan [their phones] at a store and we could see that they visited. We could see how many times they visited, their age group, how many miles they lived from us. We could see everything about them.

I’ve never liked text message marketing. Personally, [texts] irritate me. With this, you come in and you’re playing the game, and it occupies you at the table. It’s interactive, and you are winning small things that are getting [you] to try something different or getting [you] to order an appetizer. Then on the back end, we can set up the prize to last for either 30 minutes or two weeks. [That] is absolutely great, because when you are running a busy restaurant and you have text message marketing, [the coupons you send out] stay on [your customers’] phones. If you think that managers are coming over and looking at the expiration dates [of texted coupons] when they have so many tables to attend to, they’re not. And even if they did, you never want to tell a customer no. So this gives you a safeguard, where you have an expiration and [the reward is] no longer on your phone [after the expiration].

How are customers prompted to download the app?
There’s three pieces. When we first roll it out to a store, we have a tri-fold tent that briefly tells you how [the program] works. It’s right out on the front of tables. Then we have a table tent that can be a little more hidden. We have it in line with the pepper and salt shakers, and [customers] can scan from there or the tri-fold tend [to download the app]. We also have a cheat sheet for [servers]; when they open their book, it’s the first thing they see. It makes them aware [that they should] mention Front Flip. If they get people playing, it’s going to increase the morale at their tables. Also, our store managers run some contests. We have certain allowances that we do weekly on how much we will give away to employees for particular contests.

What was the reasoning behind the gradual roll out? Why not launch the loyalty program at all your locations at once?
When we [launched in] Kansas City, [Front Flip] was very new. That’s very scary because there are always some glitches in the beginning of anything. But we did roll out [the loyalty program] at all of our Kansas City stores, which was huge for us. They had a few glitches in the beginning, but not too many that it impacted our customers. So, we decided to go with St. Louis [after that]. We basically wanted to see if it worked and if it was a good product. Also, in Kansas City there were other people signing on. But in St. Louis, we’re the only ones [using Front Flip] at this time. I guess there are a couple sides to that. We are the only ones who have it, so that might entice people to come to us. But the word is not out as much in St. Louis, so not as many people know about [Front Flip]. With San Antonio, we are rolling it out within the next month. [The reason for the delay is] because those are very new stores, and we don’t want to roll too much out at once and overwhelm our staff. While it’s been a gradual roll out, it’s probably been the fastest thing we have rolled out through all of our stores.

As far as ROI is concerned, what factors are you looking at to tell if the program is a success?
Just in Kansas City alone, we have 68,707 customers. That’s through nine locations. We have been [using] it since November of 2011. We have had 214,104 visits, so our customers [who] are [using] Front Flip are not just visiting once or twice. They’re becoming regular customers. We know they’re using Front Flip when they come in, and we can tell whether they win a lot or whether they win very little. With St. Louis, we have seven locations. We haven’t even been in the market there [for very long], and we have 9,627 customers so far with 14,944 visits. We have roughly 80,000 [customers total] who are using Front Flip, and the majority of them are coming in often. We know they are returning.

What do you do with the customer data you gather from Front Flip?
We have sent some gift campaigns. We sent a campaign for people who had 15 visits in a single month — which is a very loyal customer. We sent them a $10 loyalty gift, and we had a 67% redemption rate. That was early on, and I think some of the people who are a little older weren’t paying as close attention. We [also] sent a gift to people who had been inactive, so they hadn’t been in to 54th Street in 120 days, but they had scanned in at other places. With that one, we gave $10 off a purchase of $25 or greater, and [we had] a 10% redemption rate. We don’t see a 10% redemption rate in the mail pieces we do, with the exception of the ones we do for newer stores.

We did a campaign [that targeted customers] 21 and over, male and female, who had scanned with Front Flip at least three times within five miles [of our restaurants], but hadn’t scanned [at our establishments]. So they are going to other places within five miles, but for some reason they weren’t coming to 54th Street. We can make the assumption that either we pissed them off a while back, or they just hadn’t tried us. So we sent out a very generous gift, which was $20 off the bill. When our managers spoke with these guests who came in — because they are instructed to do so — we found out that a lot of it had to do with, “I had one bad experience and I didn’t say anything about it and I didn’t come back.” Or [it was], “I was a first time visitor and it was bad, and I never came back.” But then they came back because of the gift, and they were impressed with what we were willing to give to get them back.

Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.

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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.