Tuesday, June 19, 2012 | Edited by Daniel Moores
||Big Chain Restaurant Trends: Hot Menu Items, Hot Marketing Strategies
In recent years, the rise of better burger franchises and fast-casual chains such as Panera Bread and Chipotle has put pressure on sit-down chain restaurants and classic fast food joints alike.
As the competition for diner dollars evolves, here are some of the trends shaping the increasingly crowded marketplace.
Fast Food Going Upscale
One hardly expects fine dining at an establishment with a drive-thru. That hasn't stopped some of the greasiest fast food chains from trying to go fancy. Attaching the word "artisan" on menu items is one example. Domino's is notorious for that, as it is for stunts like adding luxury ingredients like foie gras onto pizzas.
McDonald's and Wendy's are both redesigning locations with a sleeker, more upscale look and feel. Taco Bell, meanwhile, has been trying to completely revamp its menu and vibe, which includes the national launch of "gourmet inspired" Cantina Bell items created through a partnership with Lorena Garcia, a chef who has been a part of reality shows such as "America’s Next Great Restaurant."
Multi-Course Meal Deals
There is never a shortage of promotions at chain restaurants. Most involve a roster of specially priced items, and the hope is that if diners order one of them, they'll also go for sides, desserts, and other extras—at full price.
Lately, though, several chains are promising to pack in value by offering a full meal with several courses, all for one low price. Olive Garden did just that a few months ago with a $12.95 create-your-own deal that included soup or salad, a choice of entrees, and a mini-dessert. Outback Steakhouse and Red Lobster currently have similar deals -- a three-course dinner featuring a 6 oz. steak for $11.99 and a four-course "Seafood Feast" for $14.99, respectively. T.G.I. Friday's has a mini version meal deal, with one entrée and either an appetizer or dessert for $10.
Restaurants can't make much money off of such orders, but these specials may attract customers who might not have otherwise come out -- and they may bring with them friends and family who'll order meals with a bigger markup. And even though these specials are billed as full meals, guests will probably wind up paying for something else. Namely, drinks.
Stealing the Competition's Playbook
Every chain has its core specialties -- the menu items that set it apart from the competition. Sometimes, though, restaurants want to challenge the competition directly, and they do so by mimicking their counterparts' menu.
Pizza Hut, for instance, recently began encroaching on the turf of Subway and Quiznos with a lineup of hot P’zolo sandwiches. For its part, Subway has apparently been testing a new Doritos nachos menu item, akin to something you'd expect at Taco Bell.
Similarly, McDonald's has been selling pastries in certain locations, apparently in an attempt to steal business away from Dunkin' Donuts. The strategy worked, after all, when McDonald's upgraded its coffee a few years back and seemed to be able to draw customers away from DD and Starbucks.
Sometimes, as in the case of Quiznos (and now, Pizza Hut), sandwiches are literally hot. The growth of sandwich shop chains, as well as sandwich items on chain restaurant menus, is also hot. The most recent Sandwich Consumer Trend Report from the research firm Technomic shows that 49% of consumers now purchase their sandwiches away from home, compared to 44% two years ago. In 2011, as the industry lost 4,500 restaurants overall, some 800 limited-service sandwich restaurants were added.
Touchscreens Used to Upsell Customers
Small interactive computer screens have been popping up on the tables of restaurants such as Chili's and Applebee's. They have entertainment features, allowing diners -- or their kids -- to play video games and watch movie trailers.
But restaurants may be most interested in these screens because they help sell food and drinks. The Smashburger chain says digital menu boards placed at cash registers have proven successful in getting customers to add on extras like milkshakes and fries, and The Wall Street Journal reports that dessert orders rise 30% after screens displaying the desserts are installed at restaurants.
Free Wi-Fi as a Draw -- and the Standard
Eight years ago, Panera Bread did something that was unusual at the time: It started offering free Wi-Fi to all customers. Some independent coffee shops and restaurants had free Wi-Fi then, but national chains including Starbucks charged for Wi-Fi then.
As USA Today reports, the move by Panera Bread paid off right away, with sales increasing 15%. The move also started a trend, as Starbucks, McDonald's, and others now offer free Wi-Fi. Panera's latest challenge is that its service may be becoming too popular. Free Wi-Fi has become even more of a draw in recent years as wireless carriers have begun getting rid of unlimited data plans. In April, there were 2.7 million connections to Panera's wireless network, up from 2.2 million monthly a year ago, and all of the traffic has slowed service.
We Just Keep on Driving Thru
The NPD Group's latest study backs up the perception that we're a culture of constantly on-the-go, not to mention constantly hungry, people. In 2011, Americans made 12.4 billion visits to fast-food drive-thrus, a 2% rise from the previous year.
Hamburger joints, unsurprisingly, were our favorite spots for drive-thru orders: 57% of all visits to McDonald's, Burger King, Wendy's, and other fast-food hamburger restaurants were of the drive-thru variety. Helping the cause has been fast food chains' innovations to make the drive-thru faster and more satisfying, including multiple lanes for ordering and specially designed cups, wraps, and sandwiches suited for in-the-car enjoyment.
(Source: TIME, 06/11/12)
||Auto Insurance Enters the 'Pay-per-View' Era
A warning to motorists who take speed limits as suggestions, screech around tight turns or favor extra-long road trips: You might not like where the auto-insurance industry is heading.
Insurers are accelerating efforts to tap into the systems that enable a car to communicate with satellites and mobile data networks, and use information about how you drive to set your rates. The companies say that basing your premiums on how and how much you drive -- a concept known as user-based insurance or "pay-as-you-drive" insurance -- will allow them to accurately target discounts at careful drivers, and charge more spirited customers an appropriately higher amount.
"Consumers are going to see more of this," says Richard Hutchinson, general manager of Progressive Corp.'s usage-based insurance.
Most of the user-based insurance programs offered now, such as Progressive's "Snapshot" or State Farm Mutual Automobile Insurance Co.'s "Drive Safe and Save" program, woo consumers with promises that they won't pay more if they agree to let the insurance company peek over their shoulders as they drive. The companies emphasize the discounts of 30%, 40% or even 50% they might offer to those who do well according to the electronic monitors. The Hartford Financial Services Group late last year began offering a usage-based program called TrueLane in about a half-dozen states. Allstate Insurance Co.'s DriveWise program offers a 10% discount just for signing up.
Insurance companies have been experimenting for several years with technology that collects data from individual drivers. That technology is getting cheaper, the data are getting more reliable, and some car companies are starting to offer insurers access to their onboard-telematics systems to harvest driving information to tailor insurance premiums to an individual's behavior.
State Farm, the biggest U.S. auto insurer, offers user-based auto plans in four technology formats. It offers at least one of these systems in about a dozen states. It has made agreements to collect driving data through General Motors Co.'s OnStar telematics system and Ford Motor Co.'s Sync telematics system.
To qualify for the biggest discounts of up to 50%, you would likely have to agree to install State Farm's "In-Drive" communicator device, travel no more than a paltry 500 miles a year, and be pretty sedate about it, according to State Farm's website. The In-Drive device measures distance traveled, the time of day (late-night trips can trigger higher rates), whether you indulge in hard acceleration or sudden stops, make abrupt turns or speed faster than 80 miles per hour.
An average driver who travels about 11,000 miles a year could expect a discount of about 12% from the rate they might get under a standard program, State Farm says. State Farm spokesman Dick Luedke says the average customer who signs up for one of State Farm's programs gets about 10% off.
"The company that can be most accurate in measuring risk is the company that is going to win the game," he says. "If you are a really safe driver and we are not able to measure that, you are going to get a better deal from somebody else."
That is the view that Progressive, the fourth-biggest U.S. insurer, is taking as it rolls out its Snapshot individual rating system in 42 states, with plans in motion to expand to California and several other states, Mr. Hutchinson says.
The Snapshot system uses a small digital device that plugs into the car's diagnostic port, usually located on the lower edge of the dashboard.
The company's most recent data from March 2011 says about 500,000 customers had signed up for Snapshot, but Mr. Hutchinson says that number has grown since. But, the number of people ready to trade information about their driving for a discount is small compared with Progressive's total of 12 million auto-insurance customers.
Progressive's Mr. Hutchinson and other insurance executives say not many young drivers get a break from user-behavior monitoring systems, especially those that penalize drivers for sudden stops or abrupt turns.
"I have yet to meet a teen who wants this," says Nate Bryer, new product development manager at Allstate.
Consumers have shown they will volunteer to give companies private data in return for a price cut, but they usually reject coercion, and insurers say they don't want to try it. The same goes for using telematics to track where customers drive. "We stayed away from that because of privacy issues," says Mr. Hutchinson.
State insurance regulators -- who are attuned to the risk of political backlash should insurance rates suddenly jump -- present another speed bump. They demand hard data to justify rating schemes that charge more because somebody drives more miles, industry executives say. Insurance-industry executives say they are increasingly confident that data they have harvested from consumers' cars support their new price ladders.
How quickly user-based insurance will jump from niche to mainstream is a subject of debate among insurance-company executives.
At a recent telematics conference in suburban Detroit, Allstate's Mr. Bryer prompted chuckles from his competitors when he said that telematics-enabled insurance pricing could grow to 70% of the market in 10 years. However, he and his rivals agreed it is likely that user-based insurance could account for about a fifth of the market within five years.
(Source: The Wall Street Journal, 06/13/12)
||Dads' Influence in Grocery Shopping Continues to Grow
More than one-in-three (35%) moms admit dads have had more influence on grocery store purchases over the last few years. And, with 52 percent of dads now saying they are the primary grocery shopper in the household, the power of dad is hitting its stride, according to the "2012 Cone Communications Year of the Dad Trend Tracker."
Dad's Doing His Homework
Top shopper is a role typically thought to belong to mom, but as more dads are poised to take on the grocery store, they're demonstrating a lot of forethought and preparation. Dads primarily responsible for grocery shopping are more than twice as likely as moms to get a lot of input from other members in their household (34% vs. 12%).
They also do their homework before setting foot in the store. Before heading to the supermarket, dads say they:
"This research goes against all stereotypes of the 'Father Knows Best' dad who doesn't concern himself with domestic responsibilities," says Bill Fleishman, president of Cone Communications. "Marketers need to recognize the growing number of dads in the supermarket aisles who are taking their roles seriously and can benefit from brands who provide tools and shortcuts to make shopping easier."
- Create a detailed shopping list -- 63% (vs. 65% of moms)
- Collect coupons or read circulars -- 56% (vs. 62% of moms)
- Plan meals for the week ahead of time -- 52% (vs. 46% of moms)
- Perform background research on grocery products -- 24% (vs. 11% of moms)
The In-store Experience
All the prep work dads put in before heading to the grocery store is paying off. When asked about their typical grocery shopping experience, nearly one-third (32%) of dads say they get in and out as fast as possible, buying only what they came for, compared to just 21 percent of moms. Dads are also less likely than moms (26% vs. 30%) to say they get distracted by large in-store displays.
But there are still a considerable number of dads who are just as thoughtful in-store as they are beforehand. Thirty-eight percent of dads say they walk up and down each aisle to look at all their options or comparison shop. And while nearly one-in-five (19%) dads say they can finish their shopping in fewer than 30 minutes, the majority (58%) spend up to an hour in the store.
Marketing to Dads
For brands to reach dads, it's important to leverage tried-and-true marketing strategies like advertising and media relations. Dads' top three channels for gathering product- and other grocery-related information are: in-store promotions (57%), advertising (50%) and traditional media like newspapers, magazines, radio and television (40%). Surprisingly, traditional channels such as these even outrank word of mouth from friends and family (38%).
But, as effective as traditional approaches are, marketers shouldn't ignore online media, either. When looking at all online channels together, it turns out more than two-in-five (44%) dads seek out online sources -- online media (18%), product websites (15%), social networks (11%) -- for information.
"Historically, when brands of any kind market to dads, the conversation has been very one-way," says Cone Communications Vice President Byron Calamese. "But now dads are saying, 'You can reach me in other ways.' Marketers need to surround dads with an integrated approach to storytelling -- one that is ownable, talkable and shareable for the brand."
When making purchasing decisions on the spot in-store, coupons play an important role in tipping the scales in favor of one product versus another. After price and quality, dads say the number one purchase influence is a coupon (37%), stronger even than product benefits (20%) or brand name (14%). Moms are no different when it comes to purchase influences and information sources. They, too, are heavily swayed by coupons (44%) and are especially attuned to in-store promotions (69%) and traditional media (49%).
"Marketing to the sexes has always been looked at as needing two distinct approaches, but the lines are blurring," says Fleishman. "Roles may be shifting within the household, but we're finding that dads are not acting so differently from moms in their approach to grocery shopping.
"This is good news for marketers because it means we don't have to rewrite the playbook. By understanding the nuances between them, we can actually use the same strategies to reach the primary grocery shopper in the household, whether it's mom or dad," he added.
(Source: Cone Communications, 06/12/12)
Daily Sales Tip: Identifying the Real Objection
When customers say they want to "think over" their buying decision, it's often safe to assume that they have an objection they're not sharing.
Asking "What do you want to think over?" can seem intimidating, and probably won't help you uncover the real problem. Instead, ask, "Is it a question of price?" Then quietly wait for a response.
By guessing a specific objection, you'll encourage prospects to correct you by stating their true concern. If your suggestion is correct, you probably found out what's making your buyer hesitate. You might be surprised at how much this strategy improves your closing ratio.
Source: 123 Super Sales Tips