Limited time offers (LTOs) are a special menu item or even a set of items that are available only for a limited amount of time. Pretty creative, right?
This might be a dry and boring way to define limited time offers, but that’s their crux. Restaurant owners and marketers place great value in limited items for hype generation, marketing, and gaining short-term revenue.
When customers see that a certain menu item is limited, they will want to try it more than they would with normal items. It’s a classic psychology trick, known as “attraction by exclusivity,” or FOMO (fear of missing out). Implementing limited time offers is also a great “gateway product.” It can serve as an introduction to your quick-service restaurant and the beginning of a stable customer relationship.
Whether you use digital menu boards or printed menus, read this guide to make your limited time offers successful.
Why It’s Used Across the Food and Beverage Industry
Alongside their regular menus, large chains and smaller brands use LTOs all the time. Here are some of the most notable examples that we saw last year.
- Taco Bell introduced the Firecracker Burrito. The famous Mexican food chain is renowned for its creativity and the will to try new things. With cayenne popping crystals (reminiscent of Pop Rocks candy), you get a cracking sensation in your mouth. Pretty neat, isn’t it?
- Krispy Kreme and Ghirardelli chocolate donuts. When it comes to donuts, Krispy Kreme is the king on the North American content. However, in this case, they decided to collaborate with the famous chocolate brand. Together, the two authority names in the food industry launched the Sea Salt Caramel Doughnut and a Mint Chocolate doughnut. Collaborations (also known as co-marketing) work, too.
- Lo and behold – McRib is back. For our final example, we would like to point out the success of LTOs. McDonald’s launched this sandwich 35 years ago. With clever marketing, intricate campaigns, and no small amount of fandom, they’ve made McRib a legendary LTO. It’s been so successful that they are returning it every few years. This last time, they even launched an app called McRib Finder, to find the nearest McDonald’s with the ribs available.
So, what can we learn from these three great examples? LTOs can become a valuable marketing tool and one of the icon products for a company if they’re marketed and launched the right way. Collaborations bring an exotic taste to everyday products, whereas special meals (which are unorthodox for the brand) can become cult legends, requiring a re-launch every few years.
But, are they necessary for your restaurant? If so, then why?
Reasons to use LTOs
LTOs aren’t just a tool to appease customers and to capitalize on certain periods of the year. The purpose of limited time offers can be separated into five key reasons. They will help you understand the intricacy of LTOs and why a restaurant such as yours needs to add them.
Product testing options
Before you add a new product to the menu for good, you need to do something that’s called “real environment testing.” For example, if McDonald’s wants to launch a new burger, it’s enough just to post an ad for people willing to test it.
No, real environment testing involves the entire purchase process. You have to advertise the product, sell it, and track its statistics in real life. One important reason is also to see how your most popular products handle the presence of new additions. Track the metrics carefully.
Fear of Missing Out (FOMO)
FOMO is the root of all discounts, promotions, and LTOs. It’s precisely this inherent yearning for exclusive experiences and possessions that makes LTOs so essential as a marketing tool. That’s right. If a company shows that they are willing to offer something rare and limited, they themselves will be seen as somewhat “exclusive. People don’t want to miss out on the new, exciting thing.
It’s a whole new trend of selling experiences and not products. No matter how good the product is (and quality IS important), it will always be overshadowed by the exclusive experience. However, too many experiences can wear customers out. The best way to use LTOs is to periodically add and subtract them.
Let’s play a game. We say one product and you tell me the first thing synonymous to it, okay? Shamrock Shake – McDonald’s. How about Pumpkin Spiced Latte? Starbucks, of course. Do you see what we’re trying to do here? These two LTOs that we’ve just discussed have become so well-known that they are like a verbal advertisement.
Everyone knows the brand, but the brand itself is becoming even more prominent through these clever LTOs. It can also be said that the brands are successful because of the powerful branding behind them. It’s the never-ending circle of marketing and it shows us how powerful LTOs really are. Paired with a powerful digital menu board design, LTOs can build your brand and bring a new niche of customers.
Word of Mouth
When you’re releasing a new unorthodox product, people are going to be talking about it. The specific term for this is word-of-mouth marketing. In most cases, this conversation won’t just rotate around the product in-particular. Instead, it will relate to your entire image. That’s how you spread awareness and reintegrate your brand into people’s everyday life. The best ways to achieve this integration is through social media and word of mouth.
Keep in mind that some irregular or non-customers will come to your restaurant because of the LTO, but not buy it. Instead, they will see something else, enjoy it, and become regular customers. Therefore, LTOs are known popularly as “hooks.”
Rewarding Loyal Customers
There are people who comprise the heart of your customer body. To keep this core, you need to keep them happy and satisfied. LTOs have a purpose in this area as well. One popular way of rewarding your most loyal customers is by organizing contests. They can choose their own burger/dish/drink to add to the menu and achieve the most votes online to have the item included.
Not only is this free advertising for you (people will share the fact they can influence your menu on social media), but it also shows everyone that you are a brand of your word. People will see that you’ve actually added the item to the menu. Even though it’s an LTO, it’s still a nice gesture.
Poorly Planned LTOs
LTOs require the same amount of metrics analysis, tests, and other important verifications before they’re launched. Even though they have to be different from the rest of your menu, LTOs must bear a trademark addition that is characteristic to your brand. If not executed correctly, LTO-based campaigns can be calamitous to your business.
Remember McPizza? If you’re experienced in the industry you probably will, but otherwise probably not. What you don’t remember is the disaster that this product brought upon McDonald’s. Pizza takes much more time for preparation than other McDonald’s products. Customers were used to speed and efficient service, the McPizza changed all of that. Not only was efficiency down and the lines were long, but pizza ovens took up a lot of valuable cooking space.
Also, due to the price of the oven, the product also had to have a higher price. Value-oriented customers became disengaged and McDonald’s lost revenue.
A similar failure of an LTO happened with Burger King’s Burger Buddies. These were sliders styled after White Castle’s classic offering. But the small patties kept slipping between the slots in Burger King’s grills! So, you always have to ensure a new LTO will seamlessly fit in alongside your existing product offerings.
How Do You Launch a Successful LTO?
To ensure your LTO succeeds, you need to ensure a solid value-proposition to effectively stimulate your target audience. What new element or experience are you bringing to the table? It has to be something that fills a hole, a certain menu item that will be widely eaten and talked about.
The product needs to fit in with your existing business model (see the issues with the McPizza) and follow trends. Seasonal trends are the best chance to launch a successful product, such as Christmas-themed donuts or other specialties. The weather and seasonal festivity has a powerful effect on people – launching an LTO will associate your brand with these positive changes and enhance your popularity.
The bottom line is – it has to be completely unique, cutting edge, and premium in its class of products, but still fit your target market’s expectations. People have to talk about and share it for others to see it.
Observe the successful and unsuccessful examples of LTOs and learn from them. Make sure your product is unique, but it also has to bring value. Let people talk about and you might have an excellent “hook” to introduce people to other menu items. Pick wisely and you will hit the jackpot.