A proper limited time offer strategy can mean great gains for a restaurant organization, but only when implemented correctly.
Before we get started, let’s talk about the meaning of restaurant limited time offers.
Limited Time Offer Definition for Restaurants
A limited time offer, often referred to as an LTO, is a special menu item or set of menu items available for a clearly defined short period of time.
Why Do Limited Time Offers at All?
LTOs offer a few different benefits for a restaurant. These are the most notable benefits as we see it.
- Product testing. Before making long-term investments into an unusual dish or drink, give it a whirl and see what your customers say during an LTO. In addition to consumer research done before you launch an LTO, your sales numbers will tell you if the special menu items are worth a long-term addition to the menu or to roll out again for a future LTO.
- New food and flavor news. An LTO gives you something out of the ordinary to talk about. That hype is a chance to get new-to-you customers in the door. We see this often, especially with Millennials, because today’s consumers want to know the story behind their food. Did the food come from a local ranch? Were the sheep that produced the cheese massaged to sleep and given red wine from Napa that was produced from grapes that were hand selected by the Pope?
- Make it part of the marketing mix. You are no doubt juggling a few marketing strategies to attract customers, like two-for-one coupons and social media campaigns. An LTO fits into many other marketing strategies nicely. More bang for your buck, right?
- Please your tribe. We all love a good deal and something special. If you can create something special AND offer a good price, your avid fans will take notice…and hopefully tell their friends.
The Elements of a Successful LTO Strategy
While it’s true that for every rule there are exceptions, most successful LTOs include some of the same elements, which we outline here.
LTOs Reflect What’s Happening in Real Life
LTOs typically last for two to three months or for a particular event. The dish could be a seafood dish during Lent, a decadent, share-able dessert around Valentine’s Day, or a ridiculous cheeseburger with a hot dog, potato chips, and a fresh baked bun during the summer.
An LTO could be a smaller menu versus just a single dish. Whatever it is, the LTO falls in line with the customers real-time reality outside of your restaurant.
Gotta Go Now!
Consider the treats offered by many food or beverage establishments — Shamrock shake or Pumpkin Spice Latte anyone? This type of LTO appeals to people because they know the goods will only be available for a short period of time every year and they can’t miss out!
The fear of missing out (FOMO) trigger is one of the top reasons limited time offers work. By stressing the fact that the offer is for a limited time, you make your customers feel special while imparting the message that they must act quickly to enjoy the savings you’re offering.
You Won’t Find Another Like It
In the case of both the Shamrock Shake and Pumpkin Spice Latte, it’s not only about time frame. The two companies behind these beverages have done an excellent job of making the drinks synonymous with their brand. And that, friends, is the goal for any restaurant. How can your limited time offer (or any menu item for that matter) become exclusively yours? Others may imitate but never conquer.
We’ll talk more about how your brand and LTO work together in a bit.
What? You’re Out?
“While supplies last.” “First come, first serve.”
It’s called scarcity. When you create it, you fuel urgency.
The Price Is Right
Customers will feel compelled to make a quick buying decision based on the opportunity to purchase a product or service at a special price, but prospective and returning customers will also feel compelled to take advantage of a great offer.
Now, This Is a First
Play with something new and exciting that might be edgier, more global, or uniquely seasonal. This is where a brand can experiment with food/drink trends without huge financial or customer loss risk. This is the time to have your chefs be creative or bring in creative experts to expand your everyday brand thinking.
LTOs are a wonderful opportunity to wow your customers.
Tried and Tested
Up above, we did say that LTOs are an opportunity to test a menu item with your customers without the risk of changing your full menu. However, that doesn’t mean you shouldn’t do consumer research before launching an LTO. Market research isn’t always a “yes or no” question. Outside input can get the juices flowing in a new and relevant way that your daily exposure at the restaurant may be missing. A taste test, focus group, or survey will give you insight into subtle recipe, menu, or marketing changes you could make for huge rewards.
Will Your Customers Care? Does It Reflect Your Brand?
Having said that we want you to take risks, we also want you to keep your target demographic and true north in mind when developing an LTO. If your restaurant chain caters mostly to families, then a share-able appetizer is a better LTO strategy than summer cocktails. Don’t go too far off the mark. If you are experts in pizza and salads, now is not the time to explore Asian noodle bowls.
Your customers have a set of expectations based on your brand promises. An LTO is not an opportunity to deviate from that.
To recap, here are the eight pieces most successful limited time offers include.
- Seasonal – The LTO fits into what is happening in the world-at-large.
- Urgent – Limited time offers don’t last forever. Act now!
- Exclusive – You can only get it here, folks.
- Scarce – If you limit the amount available, you’ll amplify urgency.
- Priced right – Customers love a good deal.
- Unusual – Get crazy! (But not too crazy — see #7 below.) Try something a bit off the mark to really wow your guests.
- Tested – Use consumer research to launch a promising LTO. Then, pay attention to sales and customer feedback to decide on repeat offers or, possibly, menu changes.
- On-target – Stay true to your brand. Your customers expect a certain type of food from you. Give it to them in your LTO, too.
Want to know more about setting up an LTO for your restaurant? Contact Food & Drink Resources to learn more.