7 Tips for Restaurant LTOs that Drive Traffic
With inflation running at a 40-year high, many economists are predicting a recession in the next year as the Federal Reserve ratchets up interest rates.
But for some operators, the downturn has already arrived.
Patrons, pinched by record gas prices, have slashed their discretionary spending, with dining out at the top. The result? Thirteen straight weeks of declining traffic as of mid-July 2022.
The good news is there are steps you can take now to mitigate the looming downturn.
How do limited-time offers help?
Limited-time offers (LTOs) have long been one of the most effective tactics to generate excitement and drive restaurant traffic. Consumers see LTOs as a safe way to try new dishes, drawn in by unique flavors and ingredients. For operators, LTOs are essential tools to differentiate from the competition and give people fresh reasons to visit. The results speak for themselves:
- 7 in 10 restaurantgoers have eaten an LTO in the past month.1
- Operators report an increase of up to 25% in both revenue and traffic during months with a successful LTO.1
- 85% of people who enjoy an LTO will return again, and 75% will tell someone about it.1
For operators recovering from the pandemic, LTOs are a must-have element of menu strategies moving forward.
7 tips for restaurant LTOs that drive foot traffic
- Focus on creating compelling value, not discounted pricing. During the Great Recession of 2008, operators focused on creating combo/value meals that decimated margins and taught customers to expect a belly-full of food for $2. It’s a trap that many operators are still recovering from. Instead, focus on creating a unique experience your customers won’t find anywhere else.
- Make sure your LTO is photogenic. Two top reasons people choose to buy an LTO revolve around how the item looks in in-store POS and ads. This is especially important to attract younger customers. So pay attention to color, texture, and presentation as you create your LTO, and pay for professional photography—it’s worth it.
- Market on social media and in your restaurant. According to operators, these are the two most effective media for promoting LTOs, even though TV advertising reaches more consumers. Think posters and menu inserts first. And remember: LTOs marketed with photos drive 18% more purchase intent than those without.1
- Keep it simple. Operators say the best LTOs are the ones that are easy to execute and use ingredients they already have on hand. Avoid anything that requires complicated instructions, difficult-to-source ingredients, and special equipment. Given the scarcity of labor, operators should consider prepared products.
- Think of more than burger and shake LTOs. Consumer interest is high in a wide variety of LTO items, with appetizers, meat entrées, and desserts at the top of the list. Beverage LTOs have grown and now account for one-third of all LTOs, led by smoothies, shakes, and slushies.1
- Consumers want more than seasonal LTOs. Of course, seasonal LTOs remain popular, but those with fresh ingredients, premium ingredients, and unique flavors rank at the top of consumers’ wish lists. Other highly desired LTOs include new twists on familiar dishes, rarely available ingredients, nostalgic items, regional/local flavors, hand-crafted items, and over-the-top items.
- Include your customers in the process 72% of customers say they want to contribute to the creation of LTOs. What better way to reduce the risk of a flop than by getting feedback right from the source? According to consumers, the top three ways they would like to participate are by voting on new flavors, giving feedback during a tasting event, and voting on flavors submitted by customers.1
Restaurant LTOs create the excitement you need to bring customers back
According to Datassential’s research, the wisest approach is to create craveable, new items from combinations of ingredients you already have on hand. Consider adding a delicious twist to familiar dishes before delving into trendier ingredients. This hard work will pay dividends: 61% of operators regard LTOs as a profit center for their businesses. As economic headwinds pick up, it’s more important than ever to continue to create over-the-top LTOs that capture the imaginations and wallets of the dining public.
Content courtesy of Simplot Foods
1Datassential Keynote Reports, 2022