IT’S LIMITED TIME OFFER SEASON – BUT DOES THAT MEAN YOU SHOULD DO IT?
It should always be limited time offer season by the way! To me, however, this time of year is a never-ending chain of holidays. Hallowe’en (not really a holiday I know, but it is a widely celebrated occasion so I’m counting it!).We spin from that to Thanksgiving and then the Christmas season and all the holidays that are around that time of the year. Last month we talked about how these flavors can drive sales up during quieter times of the year. The idea of LTOs for restaurants for drumming up business are well known – think the Pumpkin Spice Latte and McDonald’s resurrection of the Snack Wrap. In the frozen custard world, the pumpkin pie concrete is often seen around this time of year as well. There are other benefits to using LTOs as well. You can use them to selectively run down inventory as you approach the end of the year, or conversely take advantage of seasonal flavors or reduced prices for food items that are offered by your vendors. LTOs do not just drive traffic, you can use them to increase average revenue per sale by offering them either in larger serving sizes or as smaller add on products – a mint chocolate shake with a
candy cane or two sold with it.
You may also find that customers that came for the LTO choose to go elsewhere when that particular product of flavor has been taken off the menu.
Finally, if existing customers may simply trade their original purchase for the exciting new one resulting in an increase in cost and complexity without the corresponding increase in sales.
The takeaway here is that the LTO is not a panacea. The reasons to run LTOs are valid and can be successful, but be aware of the downsides and think things through what your aims are before offering them.