NRN this Week
Operators employ work-site marketing to gain traffic

By Milford Prewitt

(April 17) - An increasingly popular advertising technique is enabling restaurant companies to target consumers where they work, generating substantial gains in customer frequency and brand awareness.
Chain and independent operators are enlisting the help of local businesses to deliver coupons, menu discounts and new product promotions directly into the hands of both potential customers and regulars at their jobs.

Operators say work-site marketing — also known as alternative print media — is a cost-effective tactic that allows them to target consumers who fit their demographic profile better than the more random approach usually taken by mass-marketing efforts.

"We never liked mass marketing because when you do that, you are basically renting that customer who is going to go somewhere else next week when your competition comes out with a bigger discount," said Jim Benedict, whose Benedict Advertising in Daytona Beach, Fla., handles ad logistics and creative content for 2,500 franchised Subway shops in 13 markets and seven Southeastern states.

"With work-site marketing," he said, "you are specifically targeting a customer who is working on a job near your restaurant, who fits your customer profile."

Operators like Subway, McDonald's, Uno Chicago Grill, Applebee's, Blimpie and Panera Bread say they are finding that marketing to customers at work offers a fresh way to stimulate frequency and increase sales through greater brand exposure.

As with many other foodservice advertising techniques, the chief message conveyed through work-site marketing is the importance of time and convenience.

"Whether you are a working mom or just a working single person, we want to be as convenient for our customers as possible," said Alex Conti, senior director of field marketing for McDonald's. "In today's society, there is a lot more demand on people's time. They are working longer, trying to spend more time with their kids and families, and that does not leave a lot of time for cooking.

"So that means people have to see us as a solution for convenient and immediate meals as they travel about — and that certainly means traveling to and from work."

Heyward Whetsell Jr., senior vice president of Uno Restaurant Holdings Corp., the West Roxbury, Mass.-based parent company of the 220-unit Uno Chicago Grill, said the chain has picked up new regulars and retained loyal patrons by marketing to them at their jobs over the past few years.

He said marketing in the workplace recently has been used to launch a new menu for the chain and to introduce a unique "Snack Hours" program with products priced between a $1.99 and $2.99 between 4 p.m. and 7 p.m. and again from 10 p.m. to closing.

Customers who work near an Uno outlet also are treated to a free appetizer during Snack Hours when they redeem their coupons, Whetsell said.

Conti said McDonald's started using work-site marketing two years ago by hooking up with a company called WorkPlace Print Media in Mentor, Ohio, which develops the creative graphics from text that McDonald's forwards to them. WorkPlace then distributes slick, full-color marketing messages to employers.

The employers, in turn, distribute the coupons or promotions to their employees through payroll checks, intraoffice mail or other official company correspondence. In most cases, the employers offer the coupons as a perk or benefit.

While Conti would not discuss the sales impact, he said that reaching customers where they work has proved to be an unqualified success for the giant burger brand.

"The program's redemption rate is higher than any other freestanding advertising insert or direct mail program that we have ever done," he said.

Benedict said leaders of the Subway co-op decided to try work-site advertising four years ago after franchisees had complained of lackluster sales during the months of January and February.

He said Subway operators were rewarded with a 12-percent increase in same-store sales a year later and stuck with the program.

"In foodservice, 70 percent of the business is breakfast and lunch, with lunch accounting for about 50 percent of that," said Dan Wheeler, vice president of business development for WorkPlace Print Media. "So if 50 percent of your business is coming from just one daypart, why try to reach your guests at home when they are more likely to be at work?"

Wheeler said the employers who participate in the program represent a broad cross section of the private sector from neighborhood dry cleaners to clothing stores to law firms and medical clinics.

Wheeler cited a biennial time-use study conducted by the Bureau of Labor Statistics released last fall that tracked how 14,000 Americans with full-time jobs spent their time in the course of a 24-hour day in 2004, specifically, from 4 a.m. to 4 a.m.

The study showed that 60 percent of consumers' waking hours are spent at work or traveling to or from it. "You add that to sleeping, exercising, helping the kids with homework," Wheeler said, "and it doesn't leave a lot of time for cooking."

Those findings come at a time when the restaurant industry is widening its lead over the grocery store business in sales growth, which suggests that consumers are depending more on restaurants for convenient meals.

According to the U.S. Census Bureau's retail sales division, in the five years between 2000 and the preliminary estimate for 2005, "food services and drinking places" grew sales 30 percent, from $305.5 billion to a 2005 estimate of $396.7 billion. For the same period, grocery stores grew their business by 15 percent, from $403.0 billion to $464.0 billion, the bureau reported.

When it comes to comparing customer visits between grocery stores and restaurants, the gap between trips is even more dramatic.

According to the Food Marketing Institute, consumers visited a grocery store 2.2 times a week in 2004, but the National Restaurant Association says restaurantgoers ate in, ordered takeout or had meals delivered 5.3 times a week.

Nevertheless, many foodservice operators say they are not about to abandon marketing to their customers at home. Amy Lee, marketing manager at Sagebrush Steakhouses, a 37-unit chain in Denver, N.C., that competes only in small towns, said she still uses traditional residential direct mail through a company called Money Mailer. The company has 21 million households in its Grove City, Calif., database that operators target in monthly booklets.

When operators select Money Mailer to distribute their coupons, part of the transaction results in a contribution to the Children's Miracle Network, a national network of hospitals that specialize in pediatric care. The network provides placards and window clingers that businesses place in their lobbies or windows.

"Our customers are very value-oriented and time-poor," Lee said. "So anything we can do that saves them money and saves them time makes us, we hope, top of mind in their dining-out decision."

Adam Mirghanbari, owner of Adamo's, a two-unit pizza operation in Chicago and St. Louis, said customers who work near his businesses are redeeming Money Mailer coupons and growing his volume.

He said the coupons appeal to consumers who are time-starved.

E-mail the author at: mprewitt@nrn.com