CHICAGO -- Limited-time offers (LTOs) grab customer attention, shake up an everyday menu and can underscore a variety of flavors and preparations. As a promotional tool, they've been effective in driving seasonal interest—particularly for convenience-store dispensed-beverage platforms—and can be part of a successful marketing tie-in with c-store loyalty programs.
The appeal of LTOs—an opportunity to get new customers in the door and increase visits from regulars, as well as the accompanying boost in checks and sales—is clear. But the cost in dollars and development time, additional SKUs, staff training and marketing can make their value a little cloudy. Those factors were a key reason Darden CEO Gene Lee gave for Olive Garden cutting back on LTOs during the fourth quarter of 2017—a move that contributed to the brand’s stronger performance, he said in a recent earnings call.
Olive Garden ran one fewer promotion in the fourth quarter, eliminating the need to bring in extra product. Instead, it lengthened the run time of the others, with the hopes of re-energizing the LTO mid-promotion, Lee said. That strategy, along with the chain’s never-ending pasta promotions (which require no training and no new products), are proving effective. But some chains see value in running more varied, frequent LTOs to appeal to different customers.
Read on to uncover the key considerations restaurant chains are using as they strategize around LTOs, courtesy of our colleagues at Restaurant Business ...