Tips to Get Started
If you’re looking to boost sales this summer you may want to consider a Limited Time Offer (LTO) for your menu. LTO’s can help to bring in new customers, boost sales from current customers while also allowing you to test new menu items or packaging ideas.
You will need to decide what type of LTO to run – whether you want to make it a seasonal offer (think Starbucks Pumpkin spice latte) that lasts 2-3 months, or create an LTO based on a shorter timeframe (urgency), or based on a limited quantity of the items (scarcity).
Here are a few more things to also consider about when designing an LTO for your restaurant:
- Know your target audience. Who are you trying to attract? What kind of sales are you looking to boost? Are you rewarding current customers, or, trying to bring in new ones?
- Understand costs. Understand the food cost and customer acquisition costs, so you can determine the profitability of your LTO. Make your goals clear and track the response of the promotion. Keep in mind that offering an item for free or half off may generate a large number of new customers, but you’ll need to know at what point you’ll be able to break even and whether your goal can be realistically attained.
- Be clear with the offer. The “scale” of customer satisifcation can easily be tipped one way or the other simply depending on how well a business manages expectations. If the value of the LTO to the customer is not clear from the beginning, it could lead to poor satisfaction if customers’ expectations were not met or if they felt the offer was deceptive. Clearly define what the value they will get out of the offer.
- Create urgency. There are a few ways to create urgency with an LTO. You can do so by limiting the time the offer is available (i.e. seasonal, “this month only”, “redeem before 7/31/2019”, etc.) – OR – you can do so by limiting the supply of the item itself (i.e. “while supplies last”)
Having a complete understanding of your costs and setting appropriate goals for your LTO based on those numbers will ultimately create a strong foundation for success when running promotions at your restaurant.