Local Store Marketing Strategies/Practices

Jim Ilaria

President & CEO

Potomac Family Dining Group

Potomac Family Dining Group

• 7th largest Applebee’s franchise system

• 67 Applebee’s operating in five Mid-Atlantic States

• Roughly 3,500 employees• $145 MM in revenue• 2.75% of net revenue

spent on National media• 0.50% of net revenue

spent on local working media

• Significant push to drive Local Store Marketing (LSM)

“May you live in interesting times.”

Ancient Chinese Proverb (aka The Chinese Curse)

The Case for Local Store Marketing• Slow economic growth• Real wages negative• Low population growth• Increase in competitive intensity / intrusion • Change in nature of competition: share-shift game• Changing media landscape• Consumers’ desire to feel connected to brands they

support

IT’S ALL ABOUT DRIVING TRAFFIC

Restaurant sales trends closely follow GDP trends…

GDP growth coming out of the “great recession” is tepid at best

Inflation adjusted “Real” Median Household Income is negative

Slow-Down in population growth decreases demand for all goods

New and adjacent market entrants have traditional casual dining players in their cross-hairs

Fast Casual

Sports Bar/Pub

Grocery

Polished Casual

Changing Media LandscapeMass media is more expensive than ever but reaches fewer potential

customers because of audience fragmentation.

How Potomac Approaches Marketing

National TV

&

Online Campaigns

Holiday / Occasion

Super Bowl, Valentine’s Day, Mother’s Day, etc.

Day/Daypart and Offering

Mondays, lunch daypart, Carside To Go, late night, Applebee’s Anywhere

Cohort Specific

Urban, suburban, highway, shopping center, military, tourist/seasonal, low population-density town

Regional

Above-store events and traveling teams

Store Specific

Hyper-local, community based

Potomac(0.5%-0.7% of Revenue)

Franchisor(2.75% of Revenue)

Potomac’s LSM Marketing Pincer

• Banners/POP• Flapjack

Fundraisers• Dining to Donate• A is for

Applebee’s

Above Store (Marketing Dept)

• FSI• Radio• Mailers• Digital

• B2B• Social Media• Newspaper

Store Level (Local or Regional)

• You Were Brave

• Frequency Cards

• Local Events

Driving Traffic

Top Down LSM

Bottom Up LSM

Facebook Ad E-mail Coupon

LSM starts with LOCAL. In addition to in-store POP, we are pushing outdoor banners

Caution…don’t overwhelm your customers or they will tune it all out

Be Brave FREEKid’s Meal Cards

Frequent Lunch Punch Card

New Resident Flyer

Consumer ConnectednessEmotional connections build the strongest brands.

It’s all about winning MINDS and HEARTS through LSM!

PotomacDiningServes.com Princess Party Night

Alex’s Lemonade Stand

Military Children’s FestivalFlapjack Fundraiser

LSM Works…now how do I get started?

• Know what you are solving for

- trial or repeat business

- day and/or daypart

- traffic or check

• Talk to others who are in your industry or market to see what works for them

- understand the variety of activities or promotions that you can execute

- get a sense of what works and what does not work (but don’t assume they had perfect execution)

- learn as much as you can from vendors but understand that they are selling…

• Don’t “bet the farm” on your first attempt

- start small

- don’t be afraid to fail…but fail fast

- instill discipline to measure results/ROI as best as you can

• If you don’t understand how to reach Millennials, hire one for your marketing team