Value-Driven Messaging Fuels Increased Traffic

Despite 93 percent  of QSR operators indicating they raised prices in 2024, nearly two-thirds (64 percent) reported increased traffic across all dayparts, according to TransUnion’s QSR Industry Report: Bridging the Affordability and Profitability Gap. More than two-thirds (67 percent) that “significantly increased” value-driven messaging saw an extremely positive effect on customer traffic, while only 53 percent of those who raised prices but only “somewhat increased” emphasis on value-driven messaging saw the same result. 

"There were two main takeaways from our findings: Those brands that instill value in their menus and effectively communicate that value to consumers will likely outperform operators that do not," Mark Rose, Senior Director of market strategy for TransUnion’s travel and hospitality business, told Modern Restaurant Management (MRM) magazine. "Also, leveraging demographic data to augment loyalty programs and special offers was a critical factor in successful campaigns."

Among the highlights:

• The report found QSRs using demographic data in their loyalty programs were nearly twice as likely to continue running targeted promotions and LTOs, compared to those that did not.
• Despite the value that appears to come from having deeper knowledge of loyalty program members, only about half (52 percent) of QSRs leverage third-party demographic data in their loyalty programs.

• Three out of four feel the current economic environment perpetuated fraudulent purchases or misuse of loyalty programs.

"While the vast majority (88 percent) of QSRs offered combo deals and value meals, only half saw a positive impact to the business in terms of store traffic," Rose said. "Interestingly, those QSRs using third-party demographic data in their loyalty programs were three times more likely to continue running those programs. We believe that having those additional insights allowed operators to be more accurate and specific in their marketing, and that was the deciding factor in successful campaigns."

Rose suggests operators should focus on better understanding and segmenting their loyalty program members to communicate their value-based menu innovations as well as new premium offerings.

"They should also work to understand their non-loyalty program customers and to create promotions that drive new loyalty program members. Operators will need build low-price value options into their menus while also ensuring premium items are available for customers that desire them as it's important for operators to leverage demographic data in their loyalty programs to understand where their customers may fall between value and premium offerings and target their advertising accordingly."
 

As we head into 2025, Rose anticipates more operators will look to data when problem solving.

"In addition to focusing on loyalty programs, operators are increasingly savvy about optimizing their store portfolio. For example, closing poor-performing locations and opening new ones with convenience features such as drive-up windows that cater to e-commerce orders. I think in 2025 we'll see more operators lean into rich customer data to make even better decisions." 

The survey, conducted by Restaurant Dive’s studioID on behalf of TransUnion, was completed June 8 to June 10, 2024, by 100 QSR executives from companies generating at least $250 million in annual revenues.