LTOs With Lasting Power
Restaurants leverage the power of temporary promotions to make long-term menu decisions.
Ironically, one of the constants on most restaurant menus are limited-time offers (LTOs), which present loyal customers with fresh dishes and beverages and give restaurants an opportunity to test new items. However, LTOs are only as successful as the lessons learned from them.
The May 2015 SCORES report from market research firm Datassential examined 526 LTOs tested that month. Among the top-performing LTOs in terms of purchase intent and draw were menu items that did not stray too far from the comfort zone of a chain’s customers—offerings like the Bone-In Natural Cut Ribeye at Outback Steakhouse, the Bacon Ranch Cheeseburger at Shoney’s, and Lobster Shrimp Scampi at Uno Chicago Grill.
The report also highlighted that LTO activity remains strong. Some of the busiest restaurants over the last year in terms of the volume of LTOs they offered include Bonefish Grill, with 136 LTOs, as well as regional chains such as Ram Restaurant & Brewery, with 119 LTOs offered at its portfolio of 30 locations in six states; Eat’n Park, with 81 LTOs in the three states where it has restaurants; and Ninety Nine Restaurant & Pub, with 71 LTOs serving its seven-state footprint.
“In the short term, I believe we’ll continue to see the same levels of [LTO] activity,” says David Jenkins, managing director of customer solutions for Datassential. “There will be some gains by the chains that currently do very little and that begin to develop a regular LTO calendar. Those gains will likely be offset as some of the most-active chains will scale back as they find the optimal level of activity for their concept.” He adds that LTO activity has been increasing since 2011 and, in 2015, is running even with last year.
“LTOs offer a perfect opportunity to showcase new items and to offer new flavor profiles that appeal to our guests’ desire for variety,” says Paul Mangiamele, chairman and CEO of Legendary Restaurant Brands, which includes Bennigan’s. “We integrate LTOs into our menu to appeal to different taste palates, to put a twist on some of our old-time favorites, and to try new innovations. [Bennigan’s is] a chef-driven concept, so LTOs are also a great way to give our chefs creative license to try new things.”
A standard LTO runs two to three months, during which restaurants can examine seasonal trends. Chains can also test LTOs in select locations before broadening them to every unit in the portfolio.
“Our ongoing Burgers & A Movie promotion provides the perfect platform for our menu and culinary teams to create innovative LTO menu items that incorporate fresh ingredients and bold flavors, and generate excitement for both movie-goers and burger lovers alike,” says Dana Benfield, vice president of marketing for Red Robin Gourmet Burgers. Earlier this summer, Red Robin partnered with the movie Terminator Genisys to premiere The Genisys Burger and Blue Haze cocktail.
Many LTOs become menu mainstays: Bennigan’s success with limited items like the Cottage Pie, Irish Tower O’ Rings, Dubliner Quesadillas, and Original Irish Dip resulted in permanent inclusion on the menu. The positive response to Red Robin’s first-ever LTO beer shake, the Samuel Adams Octoberfest Beer Shake in 2012, led to a regular line of beer shakes, including the Irish Beer Shake and Blue Moon Beer Shake. They duplicated that success with the Can-Crafted Cocktails tested in 2013.
Similarly, Smokey Bones Bar & Fire Grill debuted a Chicken Parmesan Burger last year, and it sold so well that it remains and is one of the more popular items in the burger category.
“We try to do a little bit of a twist to introduce something that’s complementary to the brand but a little different than what guests normally get, whether it be a margarita or the burgers that we’re promoting right now,” says Chris Artinian, former president and CEO of Smokey Bones, who left the company a month ago to pursue other opportunities.
“It always helps when the LTO is attached to a charity,” Artinian adds, such as the recent red, white, and BBQ burger trio, sales of which benefited the Fisher House Foundation to help provide housing for the families of ill or wounded military veterans. “Throughout my career, I’ve found there are ways to fund great charities and be able to promote your business where they benefit each other,” Artinian says.
Naturally, when an LTO makes a strong impact, customers may lament about it disappearing from the menu. However, as Artinian notes, it can always be brought back or remain unofficially. “If we have the necessary ingredients at the restaurant, then the answer is always, ‘Yes, we will make it.’ ”
For the last eight years, Red Robin has offered the ability to customize meals to order, which means diners may swap toppings or add components to recreate favorite LTOs. “If an LTO contained a unique ingredient that we no longer carry, we thank the guest for their feedback and let them know that the item may return in the future and to check back frequently,” Benfield says.
LTOs can help spice things up as well as help restaurants determine what kind of menu changes to implement. “From a business perspective, you can manage it and evaluate it,” Artinian says. “You don’t have to make long-term commitments without knowing what the sales are [likely] to be.”