Article
How Earl of Sandwich is beating bigger brands through mobile marketing
A new mobile system allows the chain to engage customers on a one-to-one level.
January 9, 2014 by Cherryh Cansler — Editor, FastCasual.com
Mobile advertising was predicted to top out at $8 billion this past year, and it should hit $11.8 billion by the end of 2014, according to Advertising Age, which also found that newspaper, billboard and radio advertising revenue will continue their downward slide and TV will stay steady.
That means mobile is the only advertising medium growing, said Sastry Penumarthy, co-founder and VP of Marketing and Business Development for Punchh, a mobile marketing company. He believes effective mobile marketing can give smaller chains and independent restaurants an edge over restaurant giants.
"We read a surprising amount of news about America's largest corporations not using mobile as effectively as they could — though they think they are," he said. "Sure, their apps provide access to their websites, online ordering and sometimes even a game is included, but not many yet engage their customers directly in two-way communication. They may be contacting their customers through mobile, but they still don't know them. Worse, those potential customers still aren't buying from them."
Penumarthy predicts that smaller restaurants will win when it comes to mobile marketing because they're adopting platforms that are less expensive but often more powerful than those used by the country's largest brands.
For example, Earl of Sandwich, an Orlando, Fla.-based chain with fewer than 30 units, tested Punchh's mobile system in four stores in July and by September expanded it into six more, said CEO Steve Heeley. Earl had previously been using a physical punch card and had an e-mail club.
How it works
Customers download the "Earl's Rewards" mobile app from their phones, and because Punchh's platform is integrated with the chain's Aloha POS system, all receipts have a unique barcode printed on them. Customers can earn rewards from the phones by tapping on the "Punch" button, and the app automatically scans the barcode on the receipt.
"It allows us to identify and target loyal and frequent customers, as we get metrics on frequency of visits, average spend, and Punchh ties to Facebook, Twitter and other social media," Heeley said.
The numbers
The system is performing well, Heeley said. Specifically, the chain:
- Has several thousand customers engaging with it, and are repeating at a rate of 54 percent.
- Has customers coming in five to 10 times a month who are now using the mobile loyalty program. On average, customers engaging via the loyalty program are spending 22 percent more.
- Has more than 1,000 reviews, which is 10 times the number of its Yelp! reviews.
- Can track how many times customers visit, how much they spend, what they've ordered and what they've shared via social media.
- Is getting new customer referrals and can see which customers are doing the referring.
- Can read reviews and have one-to-one conversations with customers, while driving social media marketing by publishing those reviews to social channels.
- Can target and deliver personalized offers to customers' phones. The campaigns can be based on visits, daypart, menu items, or other special offers.
Although Heeley couldn't comment on the exact cost of the program, he said start-up costs are low and the "cost per transaction is an excellent ROI for a loyalty program. We see much higher frequency and satisfaction from users. The Millennials love it, and they spend more per average than non-users. As our user base grows, we are better able to plug into the purchasing patterns and preferences of our users, which allows us to make better marketing and brand decisions."
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