How Your Restaurant Can Leverage LTOs to Drive Sales


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Fast food companies and packaged food companies often do a great job of using limited-time offers, or LTOs, to drive sales. But their usefulness as a sales and marketing tool isn’t limited to these businesses. Many other types and sizes of restaurants can borrow these promotional techniques to successfully stir up excitement among their customer base.

So what exactly is a limited-time offer when it comes to food?

One classic example is the McDonald’s McRib, which is periodically revived by the company. It was initially released in 1981. However, it didn’t sell well in the ‘80s and was removed from the menu. Later, in 1989, it was re-released and remained on the menu until 2005. Now it is released for a limited-time, usually each fall. The unpredictable nature of its availability inevitably gets customers excited to come into the store, not to mention discussing it on social media and with their friends.

Another example of a successful LTO is McDonald’s Shamrock Shake, which is only released around St. Patrick’s Day, or Starbucks’ infamous Pumpkin Spice Latté, so popular it has a recognizable abbreviation, not to mention a full-on cult following.

There are also tons of examples of LTOs in the grocery store, such as the many Oreo’s seasonal flavors, holiday-themed creamers and limited edition beers like UFO’s Gingerland.

Why LTOs Work

That said, you don’t need to be a giant fast food chain or a national CPG brand to take advantage of the magic of LTOs.

To get started, it’s important to understand why limited-time offers work so well with consumers. It all traces back to human psychology. As TIME explains here, it’s not just the sense of impending FOMO (fear of missing out) that gets consumers to purchase these seasonal or limited-run items. There’s also a sense of tradition at stake. People love their Pumpkin Spice Lattés in part because it helps them to feel that Fall has truly arrived.

As QSR Magazine put it, a good LTO can, “boost brand excitement and even single-handedly drive sales.”

The magic of LTOs on the business side of things is that they allow you to temporarily expand your menu, without arriving at a bloated, overly long encyclopedia of offerings that overwhelms customers (unless, of course, you’re the Cheesecake Factory.)

Instead, you can capitalize on the excitement of a season, tempt customers with new offerings and control inventory by building in predictability. Done right, LTOs are win-win.

Making LTOs Work for You

So how can you as a restaurant manager squeeze the juice out of the limited-time offer? First, understand your customer base. One good place to start is to look at past customer data. A few things you might want to look for:

  • Which seasons are busiest for you? Which are slowest?

  • What types of items sell out quickest during each season?

  • Are there common flavors, ingredients or spices that people seem drawn to at certain times of the year?

  • Are there important cultural touchstones (such as a famous local band playing or a successful sports team in the playoffs) that drive business for you?

If you don’t have this type of data on-hand, remember that automating the process of data collection and analyzation using a tool like Squadle can help you make important business intelligence decisions throughout the year.

As you analyze this data, make sure to note trends that can help you better understand your customers. Do they like funky flavors and new tastes, or do they prefer to skew toward the same, tried-and-true dishes each year?

Armed with some data about the time of year, special events and types of items that your customer base gravitates toward, it’s time to start experimenting with limited-time offers.

The Three Key Aspects of LTOs

Once you understand your market, there are three key areas you need to focus on in order to succeed with LTOs:

1) Timing

Perhaps the most important thing to get right when it comes to LTOs is the timing. When you first begin to experiment with them, you want to understand what your customer base is interested in at what time.

During the autumn, tastes generally gravitate toward heavily spiced items. In winter, especially at the holiday season, mint, chocolate, chestnut and other rich flavors will be the ones to ring customers’ bells. Spring calls for fresh, produce-heavy recipes. And summer is all about capitalizing on the bounty of fruit while emphasizing a more laid-back approach: think barbecue, burgers and fresh seafood. 

You may also have some local-specific traditions, events or cultural touchstones that you’ll want to incorporate into your LTOs. The key here is to plan ahead, so you don’t find yourself scrambling to purchase inventory a week before the event sneaks up.

2) Promotion

Next, consider how you will spread the word about your LTOs. If you are a regional chain restaurant, you may want to advertise in local markets. Beware of daily deal sites like Groupon, which may indeed bring customers in the door to take advantage of your promotions, but often primarily pull in people who would otherwise visit and pay full price.

Social media can be a very effective tool to promote your LTO, particularly if you offer early access or an extra incentive to your followers. This encourages people to follow you, making them feel like insiders and increasing the odds that they will visit your restaurant and take advantage of the LTO (plus, likely, share it with their friends.)

3) Loyalty

Of course, the point of an LTO isn’t to get customers in the door once. It’s to build a long-term relationship with them that will prove its value over time. In order to turn excitement over a limited-time offer into a valuable customer relationship, make sure that you capture customers’ information so that you can continue to promote future offers. You can do this via a mobile payment or ordering solution, by asking for their email or by encouraging them to sign up for social media updates.

Once you have their information, use it wisely. Plan to survey your customers at a reasonable interval to understand which of your LTOs they like the best. You can also involve them in the process by asking them to suggest or vote on ideas for seasonal offerings. This will often energize your customer base and get them to keep coming back time and again.

Limited-time offers can be a very effective tool in a restaurant’s arsenal of promotional techniques. Getting them right depends on gathering data, analyzing it to understand your customers and then following the three key steps: time it right, promote it right and remember to drive loyalty. If you can successfully execute on a limited-time offer, it can be just the thing to move the needle for your restaurant and get customers fired up about visiting.