Restaurants drive consumers to dine out with calculated email coupons

When Pei Wei Asian Diner introduced the Caramel Chicken entrée, the Chinese food chain took advantage of the occasion to beef up its email database. Pei Wei, which is owned by P.F. Chang’s China Bistro, worked with email provider ExactTarget to create a multichannel campaign centered on email to help spread the word. 

The effort included in-store signage, online ads and social media messages that invited consumers to sign up for Pei Wei’s email list for a buy-one, get-one free coupon. To get the coupon, consumers were asked to text their email address to a shortcode. 

“Email is being seen as viable again because of smartphones,” says Jason Miller, digital content and community manager at P.F. Chang’s. “Emails now have even more immediate impact, and with large lists, restaurants can drive a lot of information and traffic quickly.” The campaign led to 20,000 new email subscribers in two weeks. In addition, the restaurant saw 20% redemption rates. 

In this tough economy, restaurant marketing departments are facing challenging times, says Eric Giandelone, director of research at food data analysis firm Mintel Group. “With high unemployment and a slow economy, restaurants are using lots of coupon offers to motivate people to eat out.”

Giandelone says that email is a cost-effective way to send these coupons. “It’s a lot cheaper than direct mail or TV,” he says. “But restaurants have to make sure that price promotions are strong enough to get people into their restaurants, and that they can afford them with increasing commodity costs.”

Although email is cost-efficient, Giandelone warns that restaurants should not over-send coupons. “Email marketing is a great tool to send coupons, but if it is done too much, it promotes a culture of consumers who expect deep discounting,” says Giandelone. 

Joel Book, principal of the ExactTarget Marketing Research & Education Group, agrees with Giandelone’s assessment. “Daily deal promotions specifically are something that we are seeing working well,” he says. 

Taco John’s International, a West–Mex chain based in North Dakota, is using email combined with social and mobile to attract new customers. The chain uses promotions to help build its list and to drive traffic into the store. For instance, in November of last year, the company sent out emails to its database to promote its new Baja Boneless Wings dish. In order to encourage recipients to go into the restaurant, Taco John’s email included a coupon for a free portion of the meal. 

Like Pei Wei, Taco John’s also uses in-store signage that encourages consumers to sign up for its email list by texting to a mobile shortcode. The motivating factor for signing up for the list is a free serving of its signature product, Potato O’Lays. 

“Email is a great way for us to help our customers feel special and in-the-know by letting them know about new products first,” says Renee Middleton, VP of marketing at Taco John’s. “We want to give back to our customers with a free product to thank them for being a Taco John’s loyalist.” 

This year, the chain plans to create email templates to enable its franchisees to run campaigns at the local level. For example, if it’s 18 degrees outside in Fargo, N.D., and traffic is slow, a franchisee will be able to run an 18-cent taco promotion to drive customers to restaurants.

“This is a competitive category, but using emails at the local level is a powerful way to help drive people into stores in their community,” Book explains.

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