Your Guide to Creating a Restaurant LTO
During these unprecedented times, how can you draw customers to your restaurant as things reopen? How about introducing an item for a season? You can promote that it’s “while supplies last” or “only for a limited time” and Eureka! You have created a limited time offer! It seems as easy as we just described it, and it can be, but you also need a strategy to create an effective restaurant LTO.
Let’s pause here and briefly explain limited time offers (LTO’s) and how they work. When it comes to Marketing, think about the psychology behind making a purchase decision. When a customer is placed in a “strategically controlled environment, by creating product uncertainty,” retailers can “motivate behaviors such as urgency to buy.” Simply put, when a retailer puts a timeline on a product, it incentivizes the customer to make a purchase decision quickly. A timeline indicates scarcity, which gives your customer less time to acquire that product. How can you, as a restaurant operator or manager, create an effective limited-time menu offer?
Aspects of Limited Time Offers
What makes a limited time offer effective? There’s not a perfect formula, as every restaurant has different goals. Like most businesses, however, restaurants want to drive sales and entice new customers. What does an effective LTO look like?
- What’s your goal? Set your goal, stick to it, and hash out a timeline for your strategy.
- Know your audience. Who is your audience? What demographics make up the audience that visits your restaurant throughout the day?
- Use language that is descriptive and appealing to your customers. What language will draw customers to your LTO and get them to make a purchase?
- What can this LTO do for your customers? Depending on the LTO, use language that will show customers how they can benefit from the LTO. Is it healthy? Describe that part of the LTO to your customers.
Create a Strategy for Your LTO
Before you choose a random menu item from your menu, consider taking these steps to create a successful LTO.
- Consider your current menu items. According to Delgat’s Client Success Manager, Don Bye, management should understand that when shopping LTO’s, consumers are looking for “new products to try” or “different takes on their old favorites.” How can you put a twist on one of your popular menu items? You can utilize menu engineering to determine which of your menu items is most profitable.
- Study your audience. Use your restaurant data. What dishes do customers order the most? What demographics order that item the most? What’s the busiest time of day in your restaurant? Answering these questions can help with the creation of the LTO.
- Seasonality and timing are important. The easiest way to do this is to think about trends within the industry. What are customers interested in? Additionally, consider seasons. A soup may work better in the fall than in the middle of summer. Likewise, a frozen drink may not sell much in the dead of winter.
- Be creative! If you want to add something new to your menu, try it out on a limited basis. Launch it during a specific holiday or time of year to evoke feelings of nostalgia or tap into your customers’ holiday spirit. When you think of St. Patrick’s Day, do you think of McDonald’s Shamrock Shakes? PreGel America suggests that restaurants focus on potential customer excitement about the LTO and draw inspiration from there. LTOs are an opportunity for restaurants to think “outside the box” and try out something new.
- Make sure limited means limited and don’t order a ton of inventory. Set your timeline and once you reach it, discontinue that item (unless you’re planning on extending the LTO push). Continuing to sell the item past the promoted deadline can ruin the scarcity and lessen the urgency of customers to buy the item. If it runs out, customers will make sure to purchase before the item is out of stock and to ensure that they don’t miss out.
Need Some Examples?
Now that you know how to plan your LTO grab some inspiration from restaurants that regularly have limited time offers:
- Taco Bell — Every year, they note the return of their nacho fries, and they usually disappear again around the end of the year.
- McDonald’s — Shamrock Shakes anyone?
- McAlister’s Deli — Seasonal salads and drinks throughout the year.
- Red Lobster – Hello, Lobstober Fest!
- Starbucks holiday drinks and treats
Do LTOs Apply During the Pandemic?
Unusual times call for unusual measures, and LTO’s may work in your favor during the Coronavirus. Since dine-in restaurant traffic is nonexistent, restaurants need another stream of revenue. If able, restaurants are shifting to off-premise business models. Limiting menu options can help your guests make decisions when they order online or through a third-party delivery app. To decide exactly which items to offer, consider offering only “the most popular” items on your menu.
Of course, these difficulties are temporary; any deals, discounts, and promotions are technically limited-time offers. The difference is that there is not currently a definite end date for these deals. As most restaurants make the shift to off-premise dining, they still need to stand out to continue to make a profit. Limiting menu options and offering indefinite deals and discounts will allow customers to make better decisions and efficiently order from specific restaurants.
A Conclusion and an Unwarranted Personal Anecdote
LTOs can be an effective marketing strategy to draw business to your restaurant, increase sales, and test out a new menu item on a short-term basis. I’m a fan of any and all LTOs and try to get my hands on a few a year. I don’t want to be the only person at work who hasn’t tried the new latest item in the food scene. Keep that in mind as you consider planning for an LTO option. More than likely, it will benefit business and not have a negative impact. Get to it! Create your next LTO!
How has the pandemic altered your course? Click the link below for our page containing helpful restaurant resources for the COVID-19 outbreak.
About the Author
Devyn Nance is the Marketing Coordinator at QSR Automations. She graduated from the University of Louisville with a bachelor’s degree in Communication and from Loyola University Chicago with a master’s degree in Global Strategic Communication. She considers herself an (amateur) profiler – trained solely from watching every episode of Criminal Minds. Outside of work, Devyn loves to shop, travel, hang out with friends and family, read, and watch shows on various streaming platforms.