A limited time offer, also known as an LTO, provides instant excitement surrounding one or more menu items. These are offers that are designed to be short-lived, and are crafted to engender brand awareness, customer intrigue and new sales. According to QSR magazine, “Quick serves have discovered that a good limited-time offer can boost brand excitement and even single-handedly drive sales.”[Source] LTOs are valuable means of testing, stimulating and maintaining a group of loyal customers.
When is an LTO Appropriate?
There are no hard and fast rules when it comes to promotions, but limited time offers are especially useful in the following circumstances:
- Launching a new business. If you are just getting started, try offering limited time discounts on select menu items for one week after your grand opening. Examples might be “Buy One, Get One” offers on low cost items such as coffee drinks, fountain soda drinks or a selection of free desserts on dinner orders over $30.
- Adding a new menu item. When you add a new item to your menu, or you are testing something totally different, a limited time offer can help make customers aware of it and excited to try it.
- Changing up the menu. If you make drastic changes to your restaurant menu, your customers might be caught off-guard. Encourage them to try it at a discounted rate for a limited time, so they are tempted to come back sooner rather than later.
- Promoting holidays or events. LTOs are useful when it comes to promoting holiday specials or events. For instance, try promoting a Spring Break drink special for one week only in April, or make your peppermint lattes 50% off for the month of December only.
What Draws Customers?
When launching an LTO, it’s important to make sure that the offer is appealing to both current and new customers. Here are a few ways to effectively use a limited time offer:
- A new experience. Customers are interested in trying new things, especially if it’s only available for a short time. Offering something new and interesting is a great way to get attention.
- A good deal. LTOs are essentially menu items that are being offered at a reduced price. When customers can get a great price on top of feeling privy to an exclusive offer, they feel special and walk away happy.
- A sense of urgency. Limited time offers help create a sense of urgency in customers. A deadline or end-date helps consumers act, rather than waffle and decide to go elsewhere. A good deal can spur action, resulting in higher sales.
A Successful Launch
LTOs are most successful when there is enough time to plan a great launch. When the customers’ needs are taken into consideration, it increases the chances of a profitable LTO.
- Give it ample planning time. Even though LTOs are here one day and gone the next, they will require planning and organization. You may need to source new ingredients, plan for menu changes, and pay for advertising.
- Listen to the customers. Consider customer comment cards and restaurant social media communication. Think of ways to influence your customers’ choices and focus on how to provide something new that people want. Although you cannot predict the future, be sure to take the time to develop an item that is appealing.
- Utilize online and social media. Use your restaurant email marketing as a tool to communicate your limited time offer. Also, be sure to post the deal on any social media platforms you use, such as Twitter or Facebook. Use viral restaurant marketing and reach the greatest number of people as quickly as possible.
- Keep it simple. Don’t make it more complicated than it has to be. Plan to keep the name simple and the ingredients focused. The easier it is to describe, promote and sell, the better.
Benefiting Your Restaurant
From attracting new customers to initiating quarter-ending sales, LTOs can benefit the restaurant in many ways. Here’s what an LTO can do for your business:
- Bring in new business. Offering existing customers a great deal is one benefit of an LTO, but attracting new business is key.
- Initiate end-of-quarter highs. If your sales need a pick-me-up near the end of the quarter, an LTO could be just what the doctor ordered.
- Strategically update your regular menu. Limited time offers allow operators to try new menu items out while keeping the cost of goods in line. This strategy will provide some insight as to whether the item will succeed or fail. If customers can’t get enough, adding the new item to the menu will make good fiscal sense.
Limited time offers can bring a lot of positives to a restaurant business such as attracting new business, re-igniting interest with current customers and trying out new menu items. A successful LTO campaign can provide something special for your customers and can generate bigger sales for your business.