Enabling Profitable Customer Acquisition
THE CHALLENGE A national casual restaurant aimed to expand its customer base and increase revenues.
THE PROGRAM The restaurant’s marketing team created a unique promotion designed to bring in new guests and encourage follow-up visits. The initial offer consisted of a direct mail piece to local residents. The mailer included a card for $10 off as a way to entice new customers into the restaurants. Then, when the guests redeemed the discount, they would receive an extra bonus: a bounce-back worth $4 off their next visit.
Paytronix’s technology made it possible to execute this complex promotion. Specifically, Paytronix:
- Incorporated a magnetic strip card into a distinctive single-piece direct mailer
- Activated cards with an appropriate value and expiration to match the campaign
- Set-up a system of “Rules and Wallets” to ensure a simple redemption process
- Integrated with the restaurant’s POS system to dynamically:
- reflect the discount on the guest check
- load the first-time visitor’s card with the bounce back ($4 off their next visit)
- deliver pop-up messages to inform the cashier at each step
- Provided reporting capabilities to track the promotion results
THE RESULTS AND FINANCIAL RETURN After a well-performing pilot, the restaurant group rolled out the promotion in multiple cities and achieved outstanding results. The higher costs of the mailer were more than offset by the strong 11% response rate. The appeal of the magnetic strip card and the bounce-back generated thousands of incremental guest visits. In total, the restaurant group earned a 40% ROI on this customer-acquisition promotion. Plus, the success positioned the restaurant chain for the long-term benefits of an expanded customer base.
In addition, the restaurant group saved thousands of dollars by ensuring accurate accounting. They leveraged Paytronix’s “comp card” technology which explicitly identifies promotion expenses at the point of service and facilitates appropriate financial accounting. Had they used a standard gift card for the promotion, they would have overstated revenues and tax liabilities -- and squandered much of their financial return.