Extension messages can be an opportunity to drive additional redemptions, but they are not without their challenges. In our experience, we’ve learned that extensions perform best when restaurant marketers use offers sparingly. If the offer strategy is based on frequency, extensions generally have a negative impact on net sales. Restaurant marketers must be careful to follow best practices: they must monitor the unsubscribe rate to protect their list size, no matter what happens on the revenue side.
Fishbowl’s Online Marketing Consultant Caroline Smith is well versed in engagement marketing and driving incremental sales. She recognized that this client’s offer strategy made it a good candidate for a successful, revenue generating extension campaign. Caroline and her team suggested that the client could maximize the potential revenue impact by running the extensions across all of their triggered messages – Welcome, Birthday, Belated Birthday, and Membership Anniversary – instead of just for the Welcome.
She set up the test to run in one market. The control test was a single tier mailing for each triggered message. The campaign details were as follows:
- Fourteen days after each triggered mailing went out, the team sent a 7 day extension to all non-redeemers.
- Each mailing had a unique Promotions Manager ID for accurate tracking and analysis.
- The team compared performance of the test mailing to the single tiered campaign and measured campaign success on three metrics: redemptions, net revenues, and the unsubscribe rates.
Test results were impressive. The client saw a 23% increase in incremental net sales compared to the single tiered campaign. The two-tiered Welcome email alone brought a 32% increase in total revenue ($1.67 per mailing) – which Caroline and her team calculated could drive an additional $1.1M over the next twelve months, using the client’s 2013 growth rates. Even better, the team was able to accomplish this without negatively impacting the unsubscribe rate.
The client quickly moved to implement extension messages company-wide. After such a home run, who wouldn’t? To date, the client has earned over 2 million dollars from the extensions to their triggers.