In a first-of-its-kind pairing, Sonic (www.sonicdrivein.com) recently partnered with OLO Online Ordering (www.olo.com) to pilot a completely new type of online marketing promotion. As the largest Sonic franchisee in the country, there was a great opportunity to test two relatively new approaches designed to drive sales and improve the customer experience: mobile/online ordering and Groupon. The program was rolled out in February of 2012 across 30 Phoenix area drive-ins, offering a deep discount on all orders made through mobile and online ordering, using Groupon.
Through Sonic’s mobile and online ordering platform, SonicOnTheGo.com (www.soniconthego.com) developed by OLO Online Ordering, users could purchase a Groupon, find a nearby Sonic location, place an order, and choose a desired pick-up time. Transactions can take place completely through a mobile phone or online, except for order pick-up, of course. A carhop still provides the same drive-up delivery customers expect to receive at a Sonic Drive-In.
Promo benefits loyal patrons and attracts new customers
Phoenix customers responded in droves. Over the three-day campaign, Sonic enthusiasts purchased more than 4,000 Groupons, approximately four times the average sales for quick-serve restaurants in one market. Redemption rate has topped off at about 64 percent.
The program was not launched without some hesitation. While SonicOnTheGo.com has been widely used by loyal customers, concerns were raised that the Groupon deal would cannibalize sales. The fear seemed to be shared by others in the industry as well. In a recent report by Cornell’s Center for Hospitality Research (Restaurant Daily Deals: Customers’ Responses to Social Couponing, November 2011), operators stated concerns about giving a discount to customers who would have paid the full amount anyway. Overall, the study reports, the percentage of daily deal users who are already frequent customers ranges from 30 to 40 percent.
Some loyal Sonic customers did take advantage of the Groupon discount, but rather than deem it “cannibalization,” the offer is described as a loyalty perk to these frequent users.
Since the offer, Sonic has enjoyed an uptick in sales. While this suggests that the Groupon discount introduced new customers to their local Sonic, commitment to quality food and great service is necessary to transition new patrons into repeat business.
The promotion also resulted in a sizable jump in the use of online ordering with a whopping 250 percent increase. That boost has been sustained since the promotion. SonicOnTheGo.com allows users to save their orders and offers an opt-in to receive e-mail marketing. This provides the Sonic team with valuable details in order to track customer retention and offer customers targeted reasons to visit their local Sonic.
Managing the masses
With an anticipated increase in traffic, there were fears that long lines would discourage loyal customers while new customers would not experience Sonic at its best. The OLO platform, which Sonic uses exclusively for online and mobile ordering, is designed to link directly to each location’s POS system, mitigating any concerns about operations or service. During the pilot program, it was decided that orders would be received via e-mail and manually entered into the POS at the store level. In the future, the OLO platform allows remote orders to seamlessly move to the kitchen without overwhelming cashiers and reducing the chance of human error. Furthermore, when customers use the mobile or online platform, they can enter a desired time for pick-up. The average preparation time needed for each menu item is written into the system. Orders appear on kitchen monitors with prep time backed out so it synchronizes with each customer’s desired pick-up time.
The Sonic kitchens are a little busier than normal as a result of the offer, but using mobile and online ordering has simplified deal redemption, resulting in above average traffic with transactions nearly three times the average order. An added bonus has been the addition of new and loyal customers to the database who now regularly enjoy the Sonic experience.
R.D. Martin, is a supervising partner of Sonic of Phoenix – MHR, the Phoenix-based arm of the Sonic Drive-In franchisee Mason Harrison Ratliff Enterprises LLC.