Cannibalization or Smart Marketing

Yesterday, I was doing my thing, uncovering customer insights for a national food franchise. And I was visiting with a regular guest. And when I say regular, I mean super regular. He dines 5 times a week, 2 times a day at this franchise location. With a ticket average of $8.10 he spends approximately $80 a week, or $324 a month, at this fast-casual concept. Needless to say, he is a gem!
I noticed that he had a frequency card in his hand. I asked about it and he said that he received the card from the employees. It was actually a frequency card for students designed to encourage students from the local university to dine at various restaurants. So the staff decided to hand them out to regulars vs. handing them out to students. And it was a killer offer...50% off. Back to the regular customer. So for the next 6 months, this guy will spend a total of $972 with the restaurant vs. $1,944. And the kicker...he said he would still go two times a day whether he had a coupon or not.
I am all for rewarding frequent guests. For a guy that comes in that often, the owner should buy his lunch every once in a while. But is the relationship with the customer worth it? With food, paper and labor at 50%, and a 50% reduction in price, there is not profit, and no loss on this deal.

What do you think...cannibalization or smart marketing?

5 Marketing Myths Worth Testing

Thank you American Express Open Forum for providing another insightful article to make us all think.

http://blogs.openforum.com/2009/04/15/5-marketing-myths-worth-testing/?campaignid=OF2_ola_sb

Connect with Customers in April

Ignite your imagination this month. Here are some ideas to consider for implementation.

April is International Customer Loyalty Month. Consider the following tactics:

• Honor your customers hosting specials this month and communicate this through Twitter, Constant Contact or your company Face Book page.
• Personally get to know customers. Ask them, "would you like to see us doing.?" Be prepared to act on some of the suggestions to your customers know you are listening. Don't be afraid to personally call or talk with your customers. Their insights are invaluable.
• Host a customer appreciation week with added value offers and special promotions

April is Physical Awareness Month.

• Implement a cross promotion with a gym, fitness center or yoga studio. Create a card or flyer with menu items that are healthful and ask the gym to give them to members. Include a special offer just for their gym - members can show their membership card and receive this special offer during April only.
• In return, allow the fitness center to have cards or flyers at your restaurant or business.
• Team up with a nutritionist - have your chef and nutritionist offer a healthful cooking class one night at your restaurant.

April is Stress Awareness Month.

• Have fun with this one. Relieve stress at (insert your restaurant here). Attend a stress free happy hour. Promote your happy hour events in house, Twitter it, put it on your Face Book page, and send out to your database and ask them to forward it to their friends.

Have fun this month. And we'll keep the ideas coming.