In an era marked by rising food costs and minimum wages, keeping a loyal, enthusiastic customer base presents a dilemma. It’s no secret that discounts drive sales in this economy, but marketers are faced with a reality that they can no longer afford to discount their brands.
This is particularly evident in the fast-food sector, where the exponential cost of labor has driven food prices to outpace inflation rates substantially (28% vs. 19%, per the latest figures). Customers are expressing fatigue with the expense of taking a family out to eat, to eateries that were formerly fast, fun, and affordable. The latest victim of this crisis is Subway, which has seen sales plummet.
While some brands, like McDonald’s, have rolled out summer meal deals to win back low-income customers, the key to retaining core customers without price promotions might lie in embracing customers as a community citizen.
On the surface, the customer may appear to be looking for discounts, but on a deeper level, savvy marketers have come to find many customers are looking for meaning. Customer connection transcends mere product offerings; it centers on shared values and the human condition. Deeper connections cannot be achieved solely through lower cost or higher-quality ingredients. One place to look for added value is your “values equation.”
Giving back to the communities being served in the middle of a financial downturn might sound counterintuitive, but it’s been proven to work. For example, franchise brands that do “Spirit Nights” where they give a percentage of sales to local school sports teams can pack out their store with enthusiastic fans. Printing a pizza box pink and investing in breast cancer care has built employee loyalty as well as sales increases, without cutting costs.
Delivering exceptional value beyond the food can be accomplished by creating memorable experiences and emotional connections. Recent studies highlight millennials' struggles in creating family experiences due to financial constraints and busy schedules. That should be seen not only as an invitation, but also a challenge worth accepting by creative QSRs.
One answer to compete without cutting cost is to push beyond product promotion and focus on fostering genuine community engagement. One nationally known client of ours was able to not only maintain pricing but deepen customer loyalty through events like "Daddy-Daughter Date Nights," "Stuffed Animal Sleepovers," and "Family Dinner-and-a-Mystery." The brand's value was showcased by providing customers with precisely what they needed: affordable family experiences amidst rising entertainment costs. Going to a QSR for the cost of a family meal while creating a brand memory and deepening family bonds is an easy expense to justify.
Within the rising expenses in the quick-service restaurant industry lies a profound opportunity. By wholeheartedly embracing and revitalizing the core values that define your brand, you can cultivate love and appreciation among both customers and employees, fostering success that transcends barriers and endures in business.
AUTHOR BIO
Daniel Cobb is CEO ad Chief Strategist of Daniel Brian Advertising, a digital-first brand agency providing emotional connections and measurement at every touchpoint of the consumer journey.
