Fast casuals draw customers with e-mail marketing

This article originally appeared in Fast Casual magazine

Cost effective, easy to use and measurable, e-mail marketing costs pennies per contact — far less than traditional direct mail. No wonder so many companies are utilizing it to carry their messages and offers directly to customers. According to a recent survey from Interland, 60 percent of small- and medium-sized companies use or are interested in using e-mail marketing, while Forrester Research reports that 65 percent of marketers think e-mail marketing will become more effective in the next three years.

The growth of ExactTarget, a custom e-mail purveyor based in Indianapolis, is proof positive that e-mail is now seen as an important component in marketing strategy, not only for restaurants, but particularly so in the fast-casual segment. The firm has nearly 5,000 clients — an increase from five years ago when there were just 400 — including restaurants such as Max & Erma's and those under the Lettuce Entertain You umbrella.

"The goal for every one of our clients is to develop a closer relationship with individuals, their customers," said Chris Baggott, chief marketing officer of ExactTarget. "E-mail offers a means to do just that. Businesses work so hard to acquire these folks, and it becomes a question of how best to retain them."

One of ExactTarget's largest clients is Rewards Network, a loyalty-program company that provides contact-management technology for restaurants. Rewards Network uses ExactTarget's e-mail platform on behalf of its clients, an outsourcing strategy that allows restaurateurs to track customer data, such as offer response rates and e-mail click-throughs.

Further proof of the popularity of e-mail marketing is seen in the explosive growth of Constant Contact's clientele. In December 2005 the company announced that it passed the 50,000 customer mark, a two-fold increase over the previous year's 25,000 customers.

"Businesses of all sizes, but particularly those that thrive on frequent, repeat business, such as restaurants in the fast-casual category,, rely on e-mail marketing to drive customers back into the restaurant, attract new customers, develop stronger relationships with existing clientele, and build brand awareness," said Janine Popick, chief executive of San Francisco-based VerticalResponse.

Such a strategy has worked for Shaun Ito, owner and manager of Lollicup Tea Zone in Irvine, Calif., who launched permission-based e-mail marketing using mUrgent Corporation's EMPACT (E-mail and Wireless Marketing Manager). "We started low-cost guerrilla marketing with the standard techniques: money mailers, clipper coupon packages, campus and door-to-door leafleting, health fairs and other event sponsorships with high foot traffic.

"We quickly saw that our target market was more than 90 percent Internet-savvy young adults. So we added permission-based e-mail because of its hyper-efficiency and its natural appeal to our target audience."

Ito's initial advertising reached more than 10,000 local residents, but more importantly, he captured more than 1,500 personal e-mail addresses from shop visitors. New e-mails are collected daily with a voluntary sign-up sheet at Lollicup's service counter. Customers also can register their e-mails directly on the Lollicup Web site.

Ito expects to see his current e-mail list of names grow at least 5 percent each month. By using EMPACT, Ito expects to reach up to 2,500 potential customers instantly through e-mail containing the Lollicup logo banner and a variety of possible promotions including discount coupons and special drink offers.

"E-mail marketing has become the new standard in guerrilla promotion," Ito said. "It's faster, more efficient and more personal than display or broadcast advertising. We'll always keep up our community affairs activity, but we believe personalized e-mail, sent only to people who have given us their e-mail addresses voluntarily, can turn the Internet into the most effective marketing tool we use."

Using e-mail for effective marketing has been top-of-mind for a handful of

FAST FACT   E-mail marketing is an extremely effective promotional tool, a reality underscored by its growth into a $9.4 billion business, as projected by Forrester Research and Jupiter Communications.

fast-casual concepts for some time. One such example is Qdoba, which enlisted the services of Alexandria, Va.-based Fishbowl Marketing in 2001. It was the custom e-mail firm's first fast-casual client. According to Andrea Von Utter, Fishbowl Marketing's senior vice president, other fast-casual players have come on board, including Rubio's, La Madeleine and Pasta Pomodoro. Most began signing up for the service in 2004 and 2005.

For Fishbowl, "about 75 percent of our clients are in casual dining," said Von Utter. "Fast casual and quick service have been coming into this medium, in earnest, in the last year or two."

The largest of Fishbowl's newcomers is Dairy Queen, which has found some success in its creative marketing using e-mail. For DQ, its return on investment was recouped within six months of use in 2005.

That e-mail marketing is a cost-effective, multipurpose advertising medium, "makes it ideal for regular contact or situations where information needs to be communicated on short notice, times when print or other forms of advertising often prove to be cost-prohibitive," Popick said.

Popick said her restaurants clients use e-mail services to send special events invitations, promote specials, discounts or seasonal menus, advertise wedding and banquet packages, mail newsletters, distribute special recipes from the chef and, of course, supplement or replace conventional coupon programs

Growing the List

Growing an e-mail marketing list takes effort both inside the restaurant (through table tents, mentions on the menu and by staff) and on the restaurant's Web site. Once on the site, customers provide their e-mail addresses and opt in to receive electronic communiqués from the company. Dairy Queen drove customers to its site by plastering its URL on its cups.

Cincinnati-based LaRosa's lures customers to its Web site with an enticing game where players score points by catching falling ingredients. But to play, visitors must first provide an e-mail address. The game is promoted on the chain's point-of-sale materials.

Popick called e-mail marketing an ideal tool for small and mid-sized restaurants, especially those in the fast or casual foodservice segments. "(The) immediacy offered by e-mail marketing makes it especially well-suited for the fast-casual segment, where dining decisions are often more impulse oriented than in the fine dining category."