Exclusive Research: Counting Customers

Chain Leader research shows the most effective methods of driving traffic.

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 10/1/2006

How do restaurant chains drive more customers into their units? Chain Leader and Reed Research Group set out to learn how. In August we surveyed 100 companies asking about the methods chains use and which ones are the most successful.

The chain executives, primarily vice presidents and directors of marketing and operations, were polled by telephone. Forty percent of the respondents were full-service operators; 36 percent, quick service; and 24 percent, fast casual. A majority, 66 percent, had between three and 20 units, 13 percent had 10 to 100 restaurants, and 21 percent had more than 100.

Getting the Message Out

Almost all of the respondents (91 percent) use some sort of advertising to drive traffic. Quick-service operators were most likely to use advertising: 97.2 percent vs. 90.0 percent of full-service operators and 83.3 percent of fast-casual.

Similarly, while 82.6 percent of respondents who use advertising use radio and 62.0 percent use television, 91.4 percent of QSRs who use advertising use radio and 80.0 percent use TV. On the other hand, 86.1 percent of full-service operators who use advertising do so via newspapers, but only 77.2 percent of all respondents using advertising use newspapers.

Fully 94.4 percent of operators with more than 100 units who use advertising do radio commercials, and 83.3 percent run TV spots.

When asked what their most effective method of increasing traffic was, 55.0 percent of operators named some form of advertising, and 69.4 percent of fast-food respondents. Likewise, 28.0 percent said TV was the most successful method, and 38.9 percent of QSRs cited television advertising.

Price and Menu Promotions

Fast-food operators are most likely to use price promotions to drive traffic: 86.1 percent do vs. 62.5 percent of fast-casual and 75.0 percent of full-service operators. Of QSR operators who do, 93.5 percent offer discounts for bundling or upsizing; 90.3 percent use direct-mail fliers or coupons; and 61.3 percent use newspaper inserts. Of full-service respondents who use price promotions, the top methods were fliers or coupons (83.3 percent), frequent-diner programs (73.3 percent), and beverage or alcohol promotions (73.3 percent). Fast-casual operators listed direct-mail fliers or coupons (68.8 percent), senior-citizen discounts (68.8 percent), and newspaper inserts (56.3 percent) as their top three.

However, only 7 percent of respondents said that a price promotion was their most successful method.

Eighty-two percent of respondents altered the menu in some way to increase customer counts; 95 percent of full-service operators had. This year, 71.4 percent of those who changed the menu said they added more healthful items; in last year’s survey, that figure was significantly higher, at 93.2 percent.

Six percent of respondents named a change in the menu as their most effective way to raise customer counts.

The Softer Side

The lion’s share of respondents—96 percent—used community involvement to drive traffic. Of those who did, 94.8 percent support charitable organizations. Nineteen percent of respondents listed community involvement as their most successful method.

Almost all operators surveyed (99 percent) try to improve the accuracy of orders, increase the speed of service (97 percent and 100 percent of the QSRs), and update the design of the restaurant (95 percent).

Full-service operators take advantage of the Internet more than other segments: 70.0 percent offer promotions via their own Web site, and 60.0 percent use links to their site from other sites. Of all respondents, 57.0 percent have promotions on their site, and 47.0 percent use links from other sites. Only 4 percent of respondents named such methods as the most effective way to drive traffic.

The Reasons and the Results

When asked what they were trying to accomplish with their efforts to raise traffic, 69 percent said they were trying to increase visits by regular diners; 68 percent said they wanted to attract more of the current demographic group; 63 percent were hoping to attract a different demographic group; and 40 percent were trying to raise traffic in a specific daypart. Of those who were trying to enhance a daypart, 22.5 percent said breakfast; 42.5 percent, lunch; 55 percent, dinner; and 35 percent, snacks.

Eighty-five percent intended their efforts to achieve a long-term increase; 38 percent, short-term. Fully 76 percent of those surveyed said they achieved those efforts. Twenty-one percent didn’t know.

Helping Hands

Many respondents say that their supplier partners offer to help them drive traffic. The methods noted most often were in-store and point-of-sale materials (74 percent said suppliers had offered them), special promotions (61 percent), prizes or sweepstakes (57 percent), and sharing advertising expenses (49 percent).

The survey also asked which traffic builders were the most helpful. Eighteen percent said prizes or sweepstakes; 13 percent, menu development; 13 percent, recipes; and 12 percent, in-store and POS materials.