Why You'll Abandon Your Branded App in 12-24 Months

This article was featured on Pizzamarketplace.com on September 22, 2014.

Many restaurant brands have invested a lot of money in building a custom mobile app for their brand. Reasons range from "it's cheap to re-engage with a mobile audience" to "we want to be able to provide mobile payments to quicken in-store lines and collect more data on our customers." If you are one of the unicorns that has a majority of your customers actively participating in your loyalty program or app, you can ignore the rest of this post. Otherwise, read on.

pizzamarketplace.com

pizzamarketplace.com

I'm sorry to tell you that your loyalty program and/or app will not be as valuable as you think. Here's why:

First, many marketers naively see a branded mobile app as an additional marketing channel rather than a strategic service offering, such as mobile payments. Just because you built it doesn’t mean they will come. Getting consumers to download and use your app consistently is really, really hard and requires a sustained marketing effort from day 1. This is why most brands find success in offering consumers  some kind of reward or discount in exchange for the download. If you don’t offer something and back the app with a sustained marketing push, adoption will be low, participation from consumers will be even lower and all of that money you spent getting the app up and running will go to waste.

Second, even if you are successful in getting people to download your app, only a precious few of your customers will ever actually use it. These are typically the top 1 to 3 percent of your customer base; the people who know and love your brand and visit you frequently enough that having an app on their phone is justified. To these top customers, your app is valuable because they will accrue rewards for visits they already planned on making and will, perhaps, have a better in-store experience (provided your app actually works the way you want, which is rare on the first release). But as of mid-September 2014, you have a problem: Apple Pay has just demolished the payment value of a branded app. Apple Pay now makes possible for consumers to pay with their phone without downloading your app by offering consumers the ability to store any credit card on their phone and use it with any NFC-enabled device in-store - it's an idea that already has traction: McDonald's, Subway, Panera, Chipotle and Starbucks, the champion of the branded app, have all stated they will accept Apple Pay.

Starbucks accepting Apple Pay is a huge deal and here's why: the consumers using your mobile app are comprised of some fraction of your current customer base who (a) have a smart phone that is compatible with your app, (b) also come frequently enough that they want your app and (c) are willing to download it. Frankly, it's just not that many people. Estimates show that, Starbucks, for example, a globally recognized brand with what is considered the most successful food-service app by far, has less than 20 to 30 percent of its customer base on the app and transactions through the app accounted for less than 14 percent of all sales, according to their last financial release. While this is remarkably high, it is equally unlikely to replicated.

Apps can be a fantastic investment for brands who (a) have a very high customer frequency, (b) a large enough quantity of customers that a subset of those can justify having an app and (c) have both the cash to pay for the app and sustained marketing efforts to promote more downloads. Starbucks has incredibly high frequency (6x/month), very busy lines and lots of cash -- there is increased motivation by consumers to download the app (go through the line faster) and higher likelihood they’ll keep using it (since they were already planning on going back). If your brand has lower customer frequency, lower cash reserves and/or lines that aren't as busy as Starbucks, then an app is likely not your best investment.

Apple Pay's adoption potential

Apple Pay, on the other hand, represents way more adoption potential. As it relates to your brand, the number of people who may want to pay you with Apple Pay is some fraction of iPhone owners who are also your customers. It is very likely that the number of people who qualify to transact with your brand via Apple Pay is way higher than the number of people who would download and use your app. And, because many POS terminals offer NFC compatibility, this new mobile payment option will be mainstream in no time (as of 9/15/14, Apple already pre-sold 4 million phones).

That said, there is definitely some value in having your own branded app. For those top 1 to 3 percent of your customer base, having an icon living on their phone serves as a valuable reminder. And surely, the die-hard users of your app will spend a little more and come back a bit more frequently. But buyer beware: A recent study from Localytics shows that around 20 percent of all mobile apps downloaded are used only once and then disregarded. At a certain point you have to ask yourself, "Is it better to get 200 people to spend $100 more or 20,000 people to spend $10 more?" The answer, by a factor of 10, is 20,000 people. Don't think this is you? Compare your number of loyalty club/app members and your total social media following.

Kim Matlock, from Hard Rock Cafe, pointed out at a Venturebeat conference that they have a couple million people in their loyalty program and more than 9M fans on Facebook. Obviously, there is a ton of value in converting those people into some type of CRM/loyalty program which will allow her to market to them. If a brand as sophisticated and established as Hard Rock is seeing this phenomenon, what makes you think your brand is different?

Invest in your marketing platform

What you really should be focused on is investing in a marketing platform that will allow you to acquire customers from across the web into a centralized database and distribute and track promotions that can connect to Apple Pay, so you can get an exact ROI for every marketing campaign. This way, you can optimize your marketing and grow your database in preparation for Apple Pay being adopted by your customers.

With Apple Pay, you will be able to offer the same payment utility/value to consumers as your app does, and, because it doesn't require a download, more people will use it. And for what it’s worth, I would bet a pretty penny that Google will push Google Wallet hard to be more competitive with Apple Pay so Android owners don’t switch to Apple.

Focus your energies and attention on tracking your marketing, not building apps with mobile payments. That way, you can generate higher and higher returns on your marketing investments, instead of investing in a payment infrastructure which not many people will use and has just been leapfrogged by a technology which is now widely available for all. You can thank Apple for solving that payment problem for you and you can help yourself by refocusing your marketing dollars and attention.

P.S. To learn more about Privy's marketing platform, sign up for a personalized demo, or, check out The Two Things Every Successful Privy Customer Does.

Why You'll Abandon Your Mobile App in 12-24 Months

If you're a marketing professional in the restaurant or retail space, you are undoubtedly having internal conversations about a mobile app. Before you invest tens of thousands of dollars in your app, think about the maximum potential value and your expected potential value.

pizzamarketplace.com

pizzamarketplace.com

Our very own Jake Cohen was featured in Pizza Marketplace to help marketers think through mobile apps, especially with the introduction of Apple Pay. Here's the summary of the article:

  • Branded mobile apps aren't another marketing channel, they are a strategic service offering (e.g. loyalty, payments) 
  • Only the top 1%-3% of your customer base will actually download your app
  • Starbucks, who has the best branded mobile app, is accepting Apple Pay - showing how important this new technology is
  • More people will use Apple Pay than will use your branded app, so you don't have to pay for a mobile payments app (Apple provides it now)
  • You should be investing in a marketing platform that helps you acquire customers and measure ROI 

See the whole article here or see how Privy can help you acquire more customers and measure your ROI via a personal demo.

How to Spend Your First $1000 On Social Media

Congratulations! You got blessing from your executives to start testing with spending on social media and you're cleared to spend your first $1000. Do you know what to do first? Here's a quick guide to get you going.

Step 1: Test a boosted post

First, go through your organic posts and find the one that has received the highest engagement, then recreate a post just like it and publish. 

Facebook makes it easy to Boost a post.

Facebook makes it easy to Boost a post.

Then, go to your personal account and share, like and comment on that post to kick start organic engagement.

After you've started the sharing, go back to your corporate account and spend $100 to Boost the post to your key cities. Don't forget to specify which city you want to target and to select the Boost duration to somewhere between 3-5 days (depending on what day of the week you are posting).

Step 2: Test a geotargeted ad buy

Now you'll want to test some Facebook Ads to see how they compare to boosted to your Facebook fans and their friends.

You can get sophisticated reporting with not much work from Facebook ads.

You can get sophisticated reporting with not much work from Facebook ads.

First, decide what you're going to promote - hint: draw inspiration from your best posts and culturally relevant things (e.g. local events, sporting events, holidays - things that matter to your target audience). For example, if I was pushing an ad on Thursday, I'd advertise a special for Sunday football.

Second, spend $100 and geotarget the zip codes that are closest to your stores. When it comes to targeting, you only want to care about zip codes - Facebook only charges you when someone clicks and they do restrict reach when you add more targeting elements (like age and gender). Keep it wide on your first test to understand performance.

In creating your ad, make sure to insert the maximum number of images. The more images you have, the more variations of your ad Facebook will show and the better data you'll get for optimizing later.

Step 3: Compare results

When both your post and your ads are completed, write down your results. Compare cost, impressions, clicks, likes, shares and comments. Decide which metric is most important to you (or come up with a new one like in-store sales). Identify which campaign worked better.

Step 4: Tweak and double down

After you've identified which campaign was stronger, dig into the results. Were there specific variations of the campaign that worked better? Why do you think? Build a hypothesis on what you think would perform best and run a campaign or two to prove it. For example, you might believe that a picture of food will perform better than a picture of a person eating food. Great! Create two campaigns (either boosted post or Facebook Ad) and run them with the exact same targeting at the exact same time. Spend $100 one each. You'll know which one works better at the end.

At this point you will have spent $400, leaving you $600. Once you have found the best campaign you can either continue to test or dump all of your budget into the best performing campaign to see how it scales. When you're done, you'll be able to produce some great reports on your results.

To get a free consultation from a Privy expert on what you should do specifically for your brand with your first $1000, sign up here.

What Facebook posts get the most likes?

facebook.com

facebook.com

Engaging with your fans on Facebook isn't easy. Each of your fans has a news feed full of photos and updates from people that fan knows and care about - and your content is competing with all of it. To them you are a restaurant or store they may or may not have visited once. That's why you have to work extra hard to get their attention and draw them in. With that in mind here are some proven types of content that effectively engages people:

  • Photos, Photos, Photos. Everyone knows photos yield the most likes. On average 87% of likes come from photos, far more than albums, videos, links, and status updates. Also photos of food automatically make people hungry so post photos of your delicious subs!
  • Promotions are another key tool to get people to like your page. About 60% of likes for all brands came from promotions. Promotions are any announcement of a special offer.
  • Entertainment is very important. People go on Facebook to connect/share with friends but also to be amused. Give them something to laugh at and get more engagement. “Tongue and cheek” graphics are great- check out rottencards.com or someecards.com.
  • Sharing big life moments. Important moment posts generate 3.75X more likes than normal status updates. People love to share in your pride. Some big moments for restaurants are: grand openings, new funding, birthdays/anniversaries, new menu or any meaningful moment.

If you’re looking to generate more comments try interactive posts such as questions, fill in the blanks, or "would you rathers". These posts are another form of entertainment.  If you go with a question think about the type. A Hubspot study reports ‘should’ ‘would’ ‘which’ and ‘who’ questions to be the most effective.

Another fun idea is to use an emoticon. According to a AMEX OPEN, businesses using emoticons reported 33% more comments, 33% more shares, and 57% more likes on posts with emoticons than standard posts. So  

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away!

Soon enough, you'll want to know if any of your Facebook posts are driving in-store sales. Good news: Privy helps you measure the ROI of Facebook and other channels. To learn how this works, get a free consultation from a Privy Customer Success Advocate.

 

Two Things Every Successful Privy Pizza Customer Does

For National Pizza Month we want to share the two things every successful Privy pizza customer does that sets them apart  when it comes to collecting more email addresses and increasing in-store sales.

1.  They have a Long Running Offer on their website.

A long running offer is typically a small, complimentary item in exchange for an email address. This can be anything from a high margin, low cost item like a fountain soda, to a branded t-shirt, sticker or wristband.

The Privy widget on Crazy Dough Pizza's site.

The Privy widget on Crazy Dough Pizza's site.

Crazy Dough Pizza uses the Long Running Offer of "2 slices for the Price of 1"

privy.com

privy.com

With long running offers like these, Crazy Dough’s has grown their email database by 13% in just 6 months! The offer lives on their website, with the goal of converting high intent web visitors into new email addresses - and ultimately in-store customers.  Why? Website is by far the number one source of new customers and new email addresses.

This offer can also be distributed anywhere across the web, but it’s typically used as a hook in places where high-intent customers tend to hang out, like Yelp, Trip Advisor, Urban Spoon and more.

2.  They use multiple channels to distribute Limited Time Offers.

The goal of a Limited Time Offer is to drive repeat business and really boils down to this question as a marketer: “what’s the call to action/trigger that’s going to get someone to come in-store?”  This can be anything from a new menu item, a monthly special, or holiday.

Stone Hearth Pizza used the trigger of "National Panini Month" to get existing customers to try something different

Stone Hearth Pizza used the trigger of "National Panini Month" to get existing customers to try something different

privy.com

privy.com

Limited Time Offers are typically distributed everywhere, whether it be on Facebook, Twitter or geo-targeted ads.  And the best part is, one of the most powerful drivers of repeat business is right under your nose: your email list.  Just like website is the number one channel for acquiring new customers, email is best for getting people to come back.

And with the long running offer constantly adding new email addresses on your website, there’s a snowball effect: potential audience of people to reach with a Limited Time Offer grows every day.

Want to see how you can easily run campaigns like these with Privy? Signup for a demo.

 

The 4 Restaurant Marketing A-B-Cs Every Good Marketing Exec Knows

Marketing today has a TON OF BUZZ. Are you on Snapchat? Does it matter? Do you have an app? How's your food?

At the end of the day, marketing is about announcing your brand promise and operations is about delivering on your brand promise. As a marketer, you have to decide which promises consumers want to hear, then say them in a way that people actually listen to. Here are some things to bear in mind when you're making your brand's promises:

1. Is it Branding or Call to Action?

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Any effective marketing message can only accomplish one of two things: get someone to BELIEVE something about your brand/product/service or get someone to DO something about your brand/product/service. What are you trying to make happen?

Branding Example: people think your beef patties are made of fake beef. The solution is to make people believe you use real meat. Perhaps make a commercial that introduces the consumer to the farmer who supplies the real beef that goes into your patties.

Call to Action Example:  your sales for a specific menu item are down compared to last year. The solution is to drive people to spend money on that specific menu item. Perhaps create a message that tells people to come to your locations this Saturday to try this specific menu item and attach a promotion that incentivizes them to come.

2. What are your revenue triggers?

In the restaurant industry, they are a) more new customers, b) increased frequency or c) higher average ticket. Which of these things can you improve? Pro tip: if you are not measuring these things, it's impossible to improve them. Measure first, optimize second.

3. Batting .300 is pretty damn good.

You shouldn't expect to perfect every marketing message out there. The idea is to have a goal, work to accomplish that goal and hope you nail it 1/3 times. If you do, you're going to the hall of fame!

4. Don't make promises you cannot keep.

DO NOT market something without Operations buy-in. Here's why: Let's say sales during the afternoon daypart are down and your finance team wants more. So you create a campaign and series of promotions to drive people in-store in the afternoon. Well, good news - you're good at your job and a lot of people come in. Suddenly, Operations doesn't have enough staff, service is weak, consumers complain publicly online and you now have an image problem to deal with for your next marketing campaign. Had you talked to Operations beforehand, they would have been aware of the potential increase in demand and would be able to handle the increase in volume and deliver on the promise you made on behalf of your brand.

To see how Privy can help you execute and measure your call to action marketing campaigns, get a free demo.

What type of Facebook Post is best for your brand?

Ever feel like your Facebook posts don’t get many likes? Ever wonder why?

Every time one of your fans logs on to Facebook they have an average of 1,500 new status updates, photos, and more to look at. And thats just an average. Some users have over 10,000 posts to look through.  

Now that Facebook has announced they will block like-gating in an effort to prompt more organic connections (and generate more ad sales?), marketers are forced to rethink how they should engage consumers on Facebook. With over 1 billion active users on Facebook your message gets easily buried, rarely reaching even a tenth of your fans. Of course there are solutions to get your posts seen more and increase your likes. Here are the three different ways to reach people on Facebook so you can increase likes and get more activity on your page:

1. The Organic Post

The organic post is the most basic post and is entirely free.  While this post typically reaches only 5-12% of your fans, it is still effective in reminding people of your brand. Be sure to research ways to make your organic posts as engaging as possible so they reach the maximum number of people Facebook will allow.

Organic posts reach an average of 5%-12% of your fan base.

Organic posts reach an average of 5%-12% of your fan base.

Boosted posts allow you to reach more of your fans, friends of your fans and local consumers.

Boosted posts allow you to reach more of your fans, friends of your fans and local consumers.

2. A Boosted Post

A paid boosted post spreads your message to a larger group of your fans and their friends. With this post you have two targeting options: traditional audience targeting (demographic targeting) or a wider outreach to fans and friends of fans. Anywhere from 32-50% of your fans will see your post. Depending on the content, engagement and how much you pay Facebook your message could reach more fans.

Facebook Ads allow you to target consumers based off of location, interest, device or demographic information.

Facebook Ads allow you to target consumers based off of location, interest, device or demographic information.

3. Facebook Ads

Facebook ads are the final way to get your message out. Similar to a boosted post, you decide the demographic you wish to target. Your message shows up not in the news feed but right beside it. This is the most expensive post form but it does reach significantly more people than an organic or boosted post.

These three post techniques can increase your likes and page activity. What’s key is testing out all three - form a hypothesis and see what works. Also think about timing-keep in mind these additional facts:

  •     Most people check Facebook at noon on weekdays
  •     Facebook’s highest traffic days are Thursday and Friday

The type of post certainly matters as does the content. Remember Facebook pushes out popular content so the more likes and comments your post gets the more people will see it. But how do you make engaging posts people will respond to?

Want to measure and compare which Facebook actions deliver the most number of sales for your brand? See how Privy can help.