Chris Newcomb, owner of Newk’s Express Cafe, a 30-store Southern restaurant chain that focuses on upscale quick-serve dining, knows that in the food business “people can throw a lot of marketing dollars at a lot of places.” Newk’s – and its franchisees – have used some print and radio advertisements, billboards, e-mail and social media marketing. Recently, though, Newcomb tried a highly targeted digital coupon that he says drove about 7,000 people into Newk’s restaurants, producing up to 40% increases in month over month revenue.
Newk’s partnered with Cardlytics to place coupons within the online bank statements of people banking near the five company stores it used to test the program this past summer. Cardlytics used customer Zip Codes to construct the campaign, with offers appearing in local banks and at larger regional ones, such as Regions Bankcorp South. It also tested different offers, including a “10% off a $5 purchase” and then increasing it to “20% off $5.” The average ticket order at Newk’s runs from $10-$11.
The offers could appear near a consumer’s purchase at a competitor restaurant on the bank statement to better target the potential customer.
“Our goal was to reward our current customers that eat with us regularly, and we wanted to gain customers who hadn’t eaten with us in 90 days,” explained Newcomb. “We also wanted to go against specific competitors so if someone had eaten at a deli, they would see the offer. It gives us a competitive hook.”
The program, which the chain is expanding to other Newk locations, produced about a 12% redemption rate and brought in about $33,000 in revenue. About one third of those who redeemed the coupon were new customers to the restaurant.
Newcomb said that as a small business, he appreciated that Cardlytics handled the data analysis and execution. “No 1, it’s easy to implement and operate,” he said.
Scott Grimes, CEO of Cardlytics, said that Newk’s results were typical for one of its programs, although response rates can vary by vertical. “Things that people buy often like food have higher response rates, while electronics aren’t as high,” he said. “What we try to do is start with a broad campaign, and each month we refine it to improve the ROI.”