Suburban happy hour kings cultivate new customer relationship strategies

Direct marketing plays a major role in the consumer outreach efforts of competitive brands Chili’s and TGI Friday’s. When consumers visit the websites of both Chili’s and TGI Friday’s, they’re immediately greeted by offers to join the brands’ e-mail clubs and loyalty programs. 

Although many casual dining restaurant chains have loyalty pro-grams, TGI Friday’s “Give Me More Stripes” initiative sets it apart from competitors, say industry experts. 

The program, promoted heavily in store and on the brand’s web-site, offers consumers points for every dollar spent, preview opportunities for new menu items and exclusive tastings, and special discounts and coupons. Members also get a free appetizer or dessert for signing up, and free dessert on their birthdays. The brand also gives consumers points toward free menu items for spending certain amounts of money. 

“From the loyalty perspective, there is a very clear standout with what TGI Friday’s is doing with the Give Me More Stripes program,” says Kelly Hlavinka, managing partner at loyalty consultancy Colloquy. “It’s a holistic program, it’s very well branded, and it really reinforces the Friday’s theme and the vibe that they want to associate with the restaurant. After you spend $100, you get about $8 back for dessert, and that in the world of loyalty is very generous,” Hlavinka says. “They also do some nice perks, which is very important for a younger
demographic, such as allowing them to jump the line or a free dessert. We’ve seen from our research that’s very important.” 

Chili’s is also active in the loyalty and couponing space, and the brand integrates its loyalty strategies well with its e-mail marketing initiatives, according to experts. Consumers who sign up for the e-mail club get free chips and queso at their next visit, and the brand also allows them to opt in for mobile alerts. 

Chili’s also recently distributed e-mails promoting its holiday specials. The restaurant chain posted a different holiday special each day from December 6 through December 24 on its website, and it reminded consumers about the discounts using e-mail messages. Chili’s also adds its brand to merchandise, which is available for purchase on the chain’s website. Consumers can order food through the portal as well. 

“[Chili’s is] doing things that appear to try to cultivate loyalty and get repeat visits. They have an e-mail club that gives someone who joins a free order of chips and queso, and they have promotional specials on Foursquare that they announced earlier this year,” Hlavinka says. “They have taken a very different approach in that their loyalty program is not as strong to me because it doesn’t have the same holistic approach and continuity as Give Me More Stripes. It appears to be driving traffic, but I don’t know how well it will drive
loyalty to Chili’s.”

Neither Chili’s nor TGI Friday’s responded to numerous Direct Marketing News’ requests for comment on this story.

Chili’s, though, is ahead of TGI Friday’s — and many other brands — in terms of incorporating location-based social media marketing to its promotional mix. In July, the chain began offering Foursquare members free orders of chips and salsa for checking in at Chili’s locations. The program also alerted people in the vicinity of a Chili’s restaurant that the giveaway was going on, helping to attract custumers to their locations. 

TGI Friday’s, meanwhile, launched a Foursquare initiative in the UK to reach 18- to 35-year-olds and individual lo-cations have conducted Foursquare initiatives in the US for alcoholic beverage promotions, according to media reports. Jeff Hilimire, chief digital officer at digital agency Engauge, says Chili’s is the clear leader of the two in social and mobile media. “It’s not even close.” 

“The fact that Chili’s has an iPhone app — and it’s a pretty extensive app — shows that,” he says.

The number of fans that the two brands have obtained on Face-book is fairly close. Chili’s had more than 645,000 fans while Fri-day’s had more than 497,000 at press time. Both restaurant chains use their Facebook pages to promote special offers. Chili’s encourages consumers to sign up to obtain gift cards and join its e-mail club on the social network, while TGI Friday’s urges fans to share holiday offers with other Facebook friends. 

In late 2009, to increase its social media popularity, TGI Friday’s offered consumers a free hamburger in exchange for becoming a fan of a promotion-specific Facebook page. The campaign featured an affable character named “Woody” that appeared on the brand’s TV ads and YouTube videos and chatted with customers on Facebook. BusinessWeek panned the effort for its hasty conclusion, saying TGI Friday’s shouldn’t have abruptly ended the social media campaign without converting its newfound fans to the company’s official Facebook page.

Chili’s adept use of Twitter, and TGI Friday’s lack thereof, further sets the two brands apart in social media marketing. TGI Friday’s Twitter account had less than 850 followers at press time, while Chili’s had more than 14 times that amount. Chili’s communicates more often through the media as well. 

Chili’s also seems to better understand the language of social media based on reading its Twitter stream. The brand uses Twitter both to communicate with customers and to promote its special offers. 

“They are doing some promotions and doing a good job of com-municating with their fans, but they’re also pushing some deals,” says Hilimire. “It’s very important to find the balance of conversa-tion versus promotion.” 

He notes that Chili’s iPhone application even includes a game, as well as mobile application standards, such as location finders. The app also has a “meal builder” that lets consumers figure out what to eat. It could improve the app function by letting fans check in through Twitter.

Both casual dining restaurant chains have enhanced their brands by lending their names to nonprofit initiatives. Chili’s builds social media goodwill through its ongoing website, which encourages consumers to create their own versions of Chili’s iconic “pepper” logo and donate to St. Jude’s Children’s Research Hospital. TGI Friday’s has also engaged in cause marketing. In September, it worked with non-profit Share Our Strength to fight childhood hunger by asking customers to donate $5 and rewarding them with  $15 coupon books, tying the initiative back to its brand attributes.

Brand Champion

Although TGI Friday’s scores points for its loyalty initiatives, which experts cited as being superior to those of Chili’s, the brand lost ground in other areas. Chili’s is far ahead of TGI Friday’s in social media, and it uses e-mail marketing in a superior way based on samples that Direct Marketing News examined. It also gained points over Friday’s for its exploration into mobile marketing.

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