Achieving Revenue Growth and Excellent ROI with a Radio Restaurant Promotion

Those of you in the restaurant chain or franchise business may enjoy the details of this successful restaurant promotion executed by Doug Reifschneider. Doug was Vice President of Marketing at Pita Pit at the time, but recently joined Chief Outsiders as a fractional CMO.

The promotion involved six Pita Pit restaurants located in Northern Idaho and the Spokane area who agreed to pool funds to test a cooperative advertising program. The test included a guerrilla radio advertising tactic, print, social and email support with offers to encourage trade-up and increase party size.

Pre-Post Net of Control (PPNOC), also known as double-gap analysis, was used to analyze the test promotion. The promotion achieved a 3.78 ROI due to the market outperforming the system by 10.8 percentage points. The test exceeded expectations and proved:

1. Pita Pit suffered from low brand awareness
2. Traditional radio still works if used properly
3. The deal didn’t matter in this case; only 356 deals were sold during the 12-week promotion

Recap

Ownership of the six Pita Pit restaurants in the Spokane MSA (Metropolitan Survey Area) located in Spokane county in WA and Kootenai County, ID agreed to advertise collectively and test a guerilla radio marketing tactic.

Goals:

1. Combine the efforts from corporate and franchise restaurants in the Spokane, WA area to cooperatively advertise together
2. Test traditional media as part of the test
3. Focus on one day of the week to make it seem like we’re bigger than we are
4. Increase/lift sales during the 12-week test by $36,000, or $6,000 per restaurant

Tactics:

• Advertise a special valid only on Tuesdays on radio and/or other media
• Two-fer Tuesdays = Buy two smaller Pitas for only $10
• Trade-up offer in-restaurant, Buy Two Bigger Pitas for only $12
• Buy radio spots on Tuesdays only to ‘own’ the day with more than 30 Targeted Rating Points (TRP)’s per day to be on every hour (or so) for frequency
• Use print media for media mix

Budget: $12,000 for 12 weeks or about $166.67 / restaurant / week

Timing: Tuesday, October 2, 2018 thru Tuesday, December 18, 2018

Analysis

It was determined to analyze the test using Tuesday sales, weekly sales, deals sold and ROI. A significant ROI was achieved!

The highlights include:

• The promotion was analyzed using a technique known as Double-Gap Analysis
  • Compare sales from a base period to a promotional period for the test market = First GAP
  • Compare sales from the same base period to the promotional period for a control market = Second GAP
  • Compare the two gaps for a percentage point variance to determine success or failure
• The Spokane MSA sales trend improved 8.9 percentage points (PP) during the radio/print promotion which is the first GAP
• The comparable system sales trend decreased 1.9 PP during the same timeframe which is the second GAP making the double GAP variance between the Spokane MSA and the Pita Pit system (minus the 6 Spokane MSA restaurants) 10.8 PP
• When the 10.8-point double gap is applied to sales trends of what would have been to what was, or actual sales, the market experienced sales in excess of $45,000 more than had we done nothing
• Only 356 deals (average 5 / day / restaurant) were sold during the promotion – South Hill sold the most offers (169) by actively promoting the deal with a banner and suggestive selling while the NTC location only sold 12 deals or about 1/Tuesday
• Normal ROI in the restaurant industry is 3:1 (varies by EBITA) – spend $1 to get $3 and you make money
• The market gained $45,353 for a $12,000 spend to achieve 3.78 ROI

Promotional Assets

Radio:

• Radio for 12 weeks (weeks of 10/1 -- 12/17) on five (5) stations
• Radio spot #1: “Two-Fer Tuesday Twins”
• Radio Spot #2: “Two-Fer Tuesday – Taco Tuesday”

Print - Inlander Newspaper Ad: Inserted on 10/18, 11/21 & 12/6

Social - Posts on Facebook beginning 11/6, skipped 11/13 and every Tuesday thereafter

Email - Emails distributed to area subscribers on 11/6, skipped 11/13 and every Tuesday thereafter except the last email went out on 12/18 - Tuesday.

Local marketing - Included B2B marketing, a new manager, contacting athletics visiting teams, emails to chamber members, flyers to close neighborhoods, targeted bouncebacks for app download, delivery and pickup, banner advertising and aggressive selling to existing customers.

Operations - Operational instructions specified everything each restaurant team needed to get started on the promotion, including who, where, why, when, what and how details as well as upsell tips.

Results

After 12 weeks, the promotion had achieved a 3.78 ROI due to the market outperforming the system by 10.8 percentage points. The test exceeded expectations and proved that Pita Pit suffered from low brand awareness and traditional radio still works if used properly.