Sales have grown 36 percent during the past four years at Baker Bros., and to maintain that pace and keep customer traffic up, the 16-unit fast-casual deli chain is trying something it’s never done: e-mail marketing.
Dallas-based Baker Bros. has relied on word-of-mouth since its founding in 1999 and has done little other marketing, but now as the brand matures and in light of “a lot of talk about how e-mail works,” it wanted to strengthen and reward the loyalty of its cult-like following of customers, said Ken Reimer, chairman and chief executive.
“This is a really, really good time to pick up the ball and get going with it,” he said.
It’s also a good time for 430-unit Huddle House to jump into e-mail marketing for the first time. However, its target audience is not consumers; it’s potential franchisees.
The chain wants to cut the costs of mailing printed material, and using electronic franchising brochures is quicker and cheaper and stands a better chance of getting read, said Jim Bullock, franchise development director for Atlanta-based Huddle House.
“We’re really focused on increasing brand awareness for franchise development,” he said.
Amid the popularity of microsites, viral campaigns, mobile promotions and social-networking programs—not to mention traditional print and broadcast campaigns—a strong e-mail initiative can be a potent sales and brand booster.
“I think [e-mail marketing] should be in-grained permanently into every company’s marketing mix or tactical weaponry,” said Boris Bugarski, president and chief executive of mUrgent Corp., an e-mail service provider based in Santa Ana, Calif.
Spending on e-mail marketing has steadily grown and is expected to rise to $2.1 billion in 2012, according to New York-based JupiterResearch, which also warned that e-mail does not motivate consumer purchase decisions as strongly as it has in the past.
Still, some chains that haven’t used e-mail campaigns are now integrating them into their marketing.
Such chains as Dairy Queen and Houlihan’s have conducted highly successful e-campaigns. About 2 million consumers have joined DQ’s Blizzard Fan Club to receive Blizzard news through e-newsletters, DQ officials said. A Fourth of July e-mail promotion for Houlihan’s increased sales by nearly 26 percent, the company said.
Depending on how a restaurant structures its e-mail marketing, sending one e-mail message costs a penny or less, Bugarski said. On average, 30 percent of consumers in the e-mail database will open the message, and 10 percent to 20 percent will click through.
It’s not the frequency of e-mail campaigns that will aid in growing sales, but the relevance of the message and the narrow targeting of the audience, said Brian Deagan, chief executive of Knotice Ltd., a provider of online-marketing services in Akron, Ohio.
“A lot of times marketers will focus on frequency, and the reality is if you have something relevant to say, and it’s targeted, that trumps frequency,” he said.
Or as Bugarski put it: “Don’t scream if you don’t have something to scream about.”
Baker Bros. is in the early stages of developing an e-mail database and has been “getting a large response” from consumers who want to get e-mail offers, Reimer said.
“We’re going to start off with a free entrée,” he said. “Our guests pay our bills. We’re going to give them something of great value. That’s a little bit unique, some people might say odd. Most [e-mail offers] start with an appetizer or drink.”
The initial campaign also will let diners know “they’re part of the family,” Reimer said, adding that the chain will use e-mail to send “useful information” to customers.
“Our managers are very enthusiastic about it,” he said. “If they’re not, it’s not going to work.”
For Huddle House, targeting potential franchisees with electronic brochures “is a whole new realm for us,” Bullock said, but it’s a necessary step because people want to receive information quicker and “time is so valuable.”
The chain plans to launch its first e-mail effort in early January, possibly targeting chambers of commerce and seeking co-branding deals with travel centers, he said.
When the program launches, the immediate cost savings will be the $10 to produce each printed franchisee package the chain has used until now, Bullock said.
Huddle House typically grows in size by 10 percent a year and is looking to the Mid-Atlantic, Midwest and Southwest for future expansion, Bullock said. The switch to electronic brochures is part of the chain’s growing focus on digital initiatives, including a revamped website set to launch in December and using My-Space, Twitter and Facebook to reach consumers, Bullock added.
“With costs rising, there’s just more availability for a better presence on the Web and using e-mail,” he said. “You can reach more people this way.”