Driving Traffic: Giving the Green Light

Through exclusive Chain Leader research, chain-restaurant operators tell how they keep customer traffic flowing.

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 10/1/2007

Restaurant chains work a variety of angles to get more customers in the door, from sponsoring a Little League team to creating sophisticated TV advertising campaigns.

To find out which methods operators use—and which are successful—Chain Leader surveyed 100 chain-restaurant companies; 33 percent are quick-service operators, 28 percent are fast casual, and 39 percent are full service.

The vast majority of operators surveyed, 91 percent, use some form of community involvement to drive traffic. Of those who do, 96.7 percent support charitable organizations, and 92.3 percent are involved with community groups like the chamber of commerce or children’s sports teams.

The lion’s share of full-service operators, 97.4 percent, say they train servers to invite customers back.

But many of the methods are more traditional marketing tactics. Asked about marketing expenditures, 44 percent of respondents say the costs comprise 1 percent to 2 percent of sales; 12 percent say 3 percent to 4 percent; and 36 percent report 5 percent or more. But 51.5 percent of QSR respondents say their marketing expenditures equal 5 percent of sales or more.

Get the Word Out

Fully 88 percent of respondents say they use some form of advertising to drive traffic. Among quick-service concepts, that figure is 90.9 percent; fast casual, 89.3 percent; and full service, 84.6 percent.

While 83.0 percent of respondents display signs in or on the restaurant, 92.0 percent of fast-casual operators do. Fast-casual respondents are also more likely than other operators to use newspaper advertising: 88.0 percent, vs. 70.0 percent of QSR and 75.8 percent of full-service chains.

More quick-service operators say they use TV advertising (83.3 percent vs. 52.0 percent of fast-casual and 51.5 percent of full-service respondents) and outdoor/billboard advertising (70.0 percent vs. 48.0 percent of fast-casual and 63.6 percent of full-service operators).

Full-service operators are the most likely to use Internet or e-mail advertising: 84.8 percent, vs. 76.7 percent of QSRs and 72.0 percent of quick-casual operators.

Half the operators name some form of advertising as their most effective method of driving traffic; 31 percent say television advertising specifically. Of QSR operators, 60.6 percent say their most effective way to increase customer counts is advertising, and 51.5 percent name TV advertising.

Electronic marketing is on the rise: 78.4 percent of respondents use Internet or e-mail advertising. Also, 82.1 percent of full-service, 78.6 percent of fast-casual and 54.5 percent of quick-service operators use promotions via their company’s Web site. In the 2006 Driving Traffic study, 70.0 percent of full-service, 41.7 percent of fast-casual and 52.8 percent of quick-service operators did. In 2006, 47.0 percent of respondents used links to their Web sites from other sites to drive traffic. This year, 58.0 percent report using links from other sites.

Product and Pricing

In Chain Leader’s 2006 Driving Traffic study, 82 percent of operators said they adjusted the menu to increase traffic. This year, that figure is down: 61 percent. The number is higher for full-service operators: 79.5 percent.

All of the operators using the menu to drive traffic say they are adding new menu items, and 91.8 percent are using limited-time menu items.

Of all respondents, 56 percent say they use price promotions to help increase customer visits. Of chains comprised of more than 100 units, 73.7 percent say they use price promotions.

Fully 80.4 percent of all operators using promotions do so via direct-mail fliers or coupons. However, 95.0 percent of fast-food operators using price promotions use direct mail.

Of full-service operators using price promotions, 66.7 percent have beverage or alcohol promotions.

Target Marketing

The survey asked the chain-restaurant operators what the goals were of their most successful method of driving traffic. Fully 70 percent say they want to increase visits by frequent diners; 41 percent say they want to attract more of their current target demographic; 38 percent aim to attract a new demographic; and 25 percent want to increase traffic during a particular daypart. Of those, 52 percent say breakfast; 72 percent, lunch; 76 percent, dinner; and 52 percent, snacks.

Full-service operators are more likely to want to increase visits by current customers (76.9 percent). Quick-service operators are more apt than other respondents to try to attract more of their current demographic (54.5 percent) and attract a new demographic (51.5 percent).

Did their efforts work? Yes, say 76 percent of respondents. Sixteen percent of operators say their most successful method did not increase traffic, but it stayed the same. And 8 percent do not know.

Help Wanted

Many suppliers offer their chain customers help in driving traffic. The survey found 69 percent of operators say suppliers had offered them special promotions; 69 percent say they have been offered in-store POS materials; 57 percent, promotions or sweepstakes; 51 percent, staff training; and 50 percent, wait-staff incentives.

When asked if these supplier aids were extremely helpful, 26 percent of operators say in-store POS materials were; 18 percent say special promotions; 16 percent, menu development; 16 percent, coupons or promotions tied to retail products; and 15 percent, staff training. Just over 20 percent of full-service operators say wait-staff incentives from suppliers are extremely helpful.