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Coming to a cell phone near you

Restaurants texting coupons to diners


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Young people text more than they talk these days. Now companies are getting at them by offering coupons and ordering over a cell phone.

When marketers talk of "redemption" they're not talking of a religious experience, but a transactional one: of a coupon or a proof of purchase, a validation code that drives traffic to a store or online site. But coupon redemption in the digital age is less about traffic and more about targeting. That's what some restaurants are discovering about mobile marketing—allowing patrons to use their cell phone to download digital coupons, order via text messaging, or use the convenience to simply skip to the head of the line. 

Brent Dusing, CEO of San Jose, California-based Cellfire is one of the companies helping franchises streamline this process. They are taking aim at a $15 billion industry of printing and distributing circulars and coupons, and turning an expensive "push marketing" tactic on its head. The timing is right. What marketers often call "pull marketing" is coming of age at precisely the time when Generation Y (those born between 1980 and 1995) is growing weary of
intrusive marketing. "One of the most interesting age groups for the QSR and pizza markets are 18 to 34 year olds," says Dusing. "This same market understands that the cell phone can be used for more than just phone calls." Meaning, they use it to order, subscribe to, or pull information that they would otherwise block or ignore through other channels.

Not surprisingly, franchises from Papa Johns to Supercuts have all rolled out mobile marketing programs. Cellfire's clients include casual-dining, quick-serve and pizza chains like Arby's, Hardee's, Quiznos, Domino's, Wienerschnitzel, T.G.I. Friday's, as well as smaller franchises and chains such as Taylor Street Pizza in Chicago or Wild Noodles in Arizona. 

Digital call to action

What constitutes a mobile campaign? Mobile marketing in the form of targeted digital coupons is hardly complicated. Customers are driven to the Cellfire Web site where they install an application on their phone, and begin receiving mobile coupons to several restaurants. The next time they visit a restaurant they simply pull out the phone, click on the coupon and show it to the cashier. The digital validation code on the coupon could also be used when ordering
online. The restaurant creates awareness through in-store campaigns or conventional advertising.  

But there's a lot more to mobile marketing than coupons. Text messaging gives customers more control. Restaurants can create campaigns around a "short code"—a four- to six-digit number—just like a phone number. They can promote a particular menu item by asking customers to send a text message to the short code with a specific keyword to receive a coupon, participate in a contest, or be rewarded with music or ring tones. Once the customer opts in to the campaign, communication thereafter is not considered intrusive. Phoenix-based Blumo has done several text-based campaigns for major brands based on such short codes.
"The short code is a call-to-action," says Sean Bartlett, VP of sales and marketing. It's "an immediate response mechanism."  A pizza company could use keywords such as "supreme," "cheese and pepperoni," or simply "Offer1," "Offer2," and monitor response effectively.

Pre-ordering using text messaging is another way to engage the mobile generation. GoMobo, another mobile ordering service, allows the customer to store preferences and credit card information online at GoMobo.com. Then when the customer is ready to place an order, he or she sends a text message to GoMobo, which forwards the order to the restaurant, so the customer skips waiting in line. The customer's account is charged, and the restaurant gets paid by GoMobo. 

Market intelligence

Mobile marketing hinges on customer relationship management or CRM, where both marketer and customer benefit. For a generation that uses a cell phone for e-mail, swapping photos and Web browsing, the time-saving benefit is what's turning them on. For marketers, mobile coupons and the opt-in concept allow them to build loyalty programs around the mobile experience.

Mobile marketing provides more flexibility and control than print campaigns—a company can stop the campaign simply by turning off a keyword. A digital coupon can be easily redesigned, and an expiration date is easily extended. A restaurant could tailor a program to VIP customers with special offers once it has acquired a sizable number of people willing to receive the offers. 

The restaurant can track exactly when a customer has used a coupon, and how many times he or she has redeemed it—valuable information for building traffic to stores through targeted offers to a specific demographic or those in certain ZIP codes. For franchised restaurants with several locations in a state, such market intelligence could be used to predict demand based on seasons, changes in menu, etc. 

And there's that other attractive factor—the environmental benefit of no wasted paper.

Customer convenience, more accountability, and the ability to save a lot of trees—they could make mobile marketing an irresistible menu item in the marketing mix. 

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