Case Study: Restaurant Chain Uses Mobile Promotions to Reach Millennials

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PonderosaMerchant: Homestyle Dining
Market: Midwest and Northeast
Size: 142 Locations
Platform: Front Flip
The Bottom Line: Mobile promotions are an effective way to generate interest and boost engagement among a younger crowd.

While summertime promotions are nothing new in the restaurant industry — as businesses look to capitalize on the warm weather that draws people outside their homes — Homestyle Dining Chief Marketing Officer Jon Rice knew that implementing a sweepstakes program across all of his company’s 142 Bonanza and Ponderosa steakhouse franchises would be a logistical challenge. “Given the cost and complexity of executing something like that, that really wasn’t a consideration,” says Rice.

Instead, Rice opted to partner with Front Flip, a mobile engagement and loyalty platform, to generate excitement, boost engagement, and gain more insight about his guests. “What was attractive about Front Flip was it was a turn-key program that had a built-in promotional element,” says Rice. “It also had some elements that were similar to a loyalty program, which we were considering developing.”

When customers who’ve downloaded Front Flip’s mobile app visit Bonanza or Ponderosa steakhouses, they are prompted to scan a QR code at the point-of-purchase (POP). Completing this action leads to a “scratch-and-win card” that pops up on their smartphone screens. By rubbing their fingers across these virtual cards, customers can see what they’ve won. Prizes can be activated and redeemed on the next visit. Rice says the prizes Homestyle Dining is offering range from free sodas to gift cards, and even iPads.

In addition to generating excitement, the promotional program has helped Rice gain insight into his customers’ behaviors. Just 17% of Homestyle Dining’s customers are between the ages of 18 and 29, however Rice says the highest percentage of Front Flip users at his restaurants are between the ages of 24 and 34. “That’s one of the areas where we really want to build more loyalty and accrue more action,” says Rice.

Aside from demographic breakdowns, Rice also pays close attention to metrics that show how often customers are revisiting his restaurants, and how many times they are coming back. Although it is too early to tell whether people who use Front Flip are coming into Homestyle Dining establishments more frequently than those who do not, early results look promising. “People are definitely using it, and they are definitely coming back. We’re breaking down that information to understand if we, in fact, are increasing their frequency. Right now, it appears so,” says Rice.

Rice has already found a way to turn one of the biggest challenges of running a mobile promotion into a positive. He says he was surprised to find that some people weren’t familiar with how to download an app, even if they already had a smartphone. In those cases, servers or associates have been able to engage with customers while teaching them how to download the app. This interaction creates a positive relationship between customers and servers.

While Homestyle Dining is currently using Front Flip exclusively for promotional purposes, Rice wouldn’t be surprised if the company adopted the vendor’s loyalty tools in the future, as well. “We have a number of franchisees that have already expressed interest in continuing to use it like a loyalty program, as opposed to what we do now, which is more promotional,” says Rice.

The Takeaway
Using Front Flip exclusively as a promotional tool has allowed Homestyle Dining to dip its toes into mobile marketing and gain experience working with the vendor, without jumping all the way in with an ongoing loyalty program. This summertime promotion is giving Homestyle Dining a chance to test Front Flip’s platform and assess the results before deciding whether to continue the relationship on an ongoing basis.

Additionally, Rice has learned that businesses that have traditionally served an older clientele can use mobile marketing platforms as a way to boost engagement among younger groups. At Homestyle Dining, customers in the 24- to 34-year-old range are most likely to use the Front Flip app, in large part because they feel more comfortable downloading mobile apps than some older customers.

Stephanie Miles is an associate editor at Street Fight.

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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.