Limited time offers (LTOs) have gone a long way for a long time, and foodservice operators continue to get a lot of mileage out of them as go-to business boosters.
According to the foodservice market research and analytics firm Datassential, over the last 17 years the median number of LTOs has skyrocketed 82% at limited-service chains and 80% at full-service chains.1 The feast of opportunities continues to inspire menu innovation, with at least half of consumers surveyed expressing interest in all kinds of LTOs, particularly those that are value-priced and seasonal.1 Seventy-eight percent are drawn to seasonal limited time offers.2
Forty-eight percent of foodservice operators surveyed report increased LTO sales1, underscoring the ongoing value of limited-run specials as a revenue engine. And with 38% of survey participants visiting restaurants specifically to order LTOs,3 operators can be expected to leverage LTO concepts to help drive sales in 2018.
But what makes an LTO successful? When asked about the last LTO they ordered, three-quarters of consumers surveyed broke down its appeal as “unique, enjoyable and craveable.”1
Promotions with the greatest likelihood of success are designed to meet specific objectives, complement the menu and appeal to core customers, as well as encourage repeat business and referrals with time-sensitive urgency. Datassential cites McDonald’s McRib sandwich and Starbucks’ Unicorn Frappuccino and Pumpkin Spice Latte as paradigms of limited specialty items.1
Buzz is a big factor in the success of LTOs. Ninety-eight percent of operators surveyed promote LTOs through Facebook.5 While TV may seem outdated as a marketing channel to reach consumers weaned on digital devices, almost half of millennial and Gen Z survey samples reported seeing LTOs promoted on television.4 “A great photo, approachable item name, and easily understood description that communicates premium, but not too adventurous,” are the keys to promoting LTOs effectively.5
LTOs Answer the S.O.S for a Higher Check Average in the New Year
The NPD Group, an industry analysis and advisory firm, predicts that LTOs will be an even more important area of focus for restaurant operations in 2018, especially as these establishments step up their efforts to attract lighter buyers.5 This dovetails with NPD’s prediction that offering value will also be one of the year’s key foodservice trends. LTOs are typically associated with value-pricing and discount deals, and value is expected to become increasingly important as QSRs refocus on the lower end of price spectrum to jumpstart traffic.5 NPD also predicts the growth of loyalty programs, which can also be used to promote LTOs and reward valued customers.
LTOs' enduring appeal across industry segments lies in their fundamental ability to give the consumer a reason to visit. “Engaging customers remains the key to every operator's success,” said NPD Restaurant Industry Analyst Bonnie Riggs.5
Data from the global foodservice research firm Technomic indicates that consumers will increasingly plan dessert occasions as they gravitate to establishments that offer desserts they find especially tantalizing.6 More than half of younger consumers surveyed say that such desserts will inspire them to patronize specific restaurants.6 As a result, opportunities may be opening up for foodservice operations to use LTOs to build reputations as go-to venues for unique, can't-miss dessert concepts and flavor experiences.6
Simply by tightening the timeframes in which LTOs are available, operators can ramp up buzz and excitement. Leveraging anticipation of future LTOs can help build customer loyalty and drive repeat traffic, with email, text and in-app notifications deployed as a form of customer service reserved for reward program members.
Reach out to us below to learn more about how LTOs featuring our brands can help power profits for your foodservice operation. The clock is always ticking and you can never boost business too soon.
Aug.2017, Issue 44, p. 2. Downloadable here.