Mark Kolier’s Blog

Posts Tagged ‘Denny’s’

If you are on the road and hungry at 3AM do you find it comforting to see a sign for an IHOP or Denny’s? I don’t travel in the middle of the night but once every few years so a restaurant open 24 hours a day does not have much value for me personally. However both IHOP and Denny’s are open 24 hours. People must be eating there in the middle of the night – right?

I don’t have the sales figures to know how much business is done at restaurants like IHOP and Denny’s between the hours of midnight and 6AM. But I do know that in my view being open those extra six hours detracts from my perception of the quality of the restaurant. It’s got to be really difficult to keep a busy restaurant clean in the first place, and being open 24 hours does not make that any easier. After all, the staff in the wee hours is minimal and they are trying to make do with as few people as possible.

I was in an IHOP (International House of Pancakes) in Florida this past weekend. I had not been in one in several years. Founded in 1958, IHOP has over 1,400 restaurants around the U.S., Mexico and Canada. From the time I was a kid IHOP represented pancakes and many kinds of different syrup on your table. In fact I had never even seen boysenberry syrup until I went to an IHOP. Well the IHOP I went to was crowded, dirty (the bathroom was a mess), the pancakes were not great, and it was expensive. It was a shock that it cost $ 34.00 for three people for pancakes, coffee and 6 strips of bacon. We won’t be going back to IHOP for a long time.

In contrast Denny’s (which operate 1,600 restaurants in 49 United States), has embarked on developing its Denny’s Diner concept. I have been in a few Denny’s in recent years but never the diner concept. I was pleasantly surprised that it was not only pretty clean and kind of cool looking inside, but there also were choices at $ 2/$4/$6 and $ 8 for breakfast (or any other meal for that matter). Oh and the bathrooms were clean also (hey I had to find out for myself).

I still feel that being open 24 hours is a detriment to restaurants like Denny’s or IHOP or any other restaurants for that matter. How much business could they be doing during that 6 hour period? Staffing during that time has to be a nightmare as working graveyard is no picnic and service, and maintenance would seemingly suffer. So is it enough to promote being open 24/7 to offset what might be a negative connation when one considers going to an open 24 hour a day restaurant?

Maybe it’s me but do you have a built in prejudice for ‘Open Always’ restaurants?

The past two years Denny’s restaurants have offered an interesting promotion the Tuesday after the Super Bowl – a Free ‘Grand Slam’ breakfast. It created a great deal of buzz in 2009 and again this year and reportedly cost less than $ 1.50 each when you factor in that many people still had to pay for coffee ($ 1.85) and/or juice ($ 1.99).

What continues to be a mystery is how this promotion created new customers (I assume that it did) and how loyal have those new customers become? My marketing intuition suggests the tactic should have been successful but without an attribution model it’s a gray area to everyone except those at Denny’s and Denny’s marketing agencies (or so I hope).

More recently Denny’s has teamed up with AARP and reports are that the discount program http://bit.ly/eSeIh1 has drawn more than 2 million members. AARP members who show their membership cards at Denny’s restaurants on any day of the week between 4 and 10 p.m. get 20% off the total check amount. The card also allows members and their guests to purchase a cup of coffee for $1 per person on any day, 24 hours a day.

Again I really like the idea and imagine that it will have a high probability of success. But how is it being measured? I expect that Denny’s would be measuring the lifetime value (LTV) of the new customers these promotions have brought into the funnel. The promotion is seemingly also a smart one for AARP as it delivers added value to its members (of which I am one but I was totally unaware of this promotion – hmmm).

Since Denny’s continues to do out-of-the ordinary promotions it’s easy to surmise that they must be working to some degree. After all like the person who goes to the doctor and says ‘Doctor it hurts when I do this’ and the doctors says ‘Stop doing that’, Denny’s has to know the promotions have worked to some degree or why continue them, right?

How about Denny’s sharing the numbers so the rest of us can see how truly effective these campaigns have been over a broader scale? I’d like to think that the marketing community would be eager to have Denny’s share what would be very valuable information.

Much has been discussed the past few days related to the Doritos ads presented during the Super Bowl telecast this past Sunday.  Like them or not (I liked the Samurai one and the other not so much), there have been articles written on how Ad Agencies should ‘fear’ user generated ads as the beginning of the end for marketing agencies. 

Stuart Elliott in this morning’s NY Times http://www.nytimes.com/2010/02/09/business/media/09adco.html?ref=business postulates that ‘modern-day “Mad Men”’ should take pause since the two Doritos spots were among the most-watched among all the spots.

The article went on to note that in two separate surveys among users of Twitter (never thought of Twitter as a focus group myself), Doritos finished first.  It did not mention whether or not the Twitterers were already Doritos aficionados. 

But should we really be surprised that amateur ads performed well enough to be even included in the same conversations with ads produced by giants like Goodby, BBDO, and others?   Not at all in my view.  In particular Doritos is a fairly straightforward value proposition.    The ads are fun, irreverent and aimed at the target audience of chip loving Americans.  The 24 year old creator of the “Underdog” spot won $ 600,000 for his second place finish.   How exactly is that so different from paying a Madison Avenue agency to come up with a strategy and execution? 

The real success of the campaign should not be solely measured by how audiences liked or did not like a Super Bowl ad.  Everyone seems to like to flog the GoDaddy ads but they talk about them constantly and can you remember which company is the former leader in internet domain name registrations and SSL’s?   GoDaddy owns that space now – with their cheesy ads and all (Doritos is a bit cheesier to be sure as am I). 

How many more people will try and enjoy Doritos as a result of the Super Bowl ads?   I hope Frito-Lay will have some metric for figuring that out.  But I don’t hold out much hope. 

And today the chickens truly come home to roost as Denny’s is amidst it’s 8 hour free Grand Slam breakfast offer that was promoted by those chickens during the Super Bowl.   Last year 2 million people went to Denny’s to have their free breakfast.  I bet they will do even more free breakfasts this year. 

More importantly I expect Denny’s to collect email addresses of all free breakfast redeemers.  That offers a real opportunity to both engage and make offers to potential customers (remember they are not customers until they actually spend some $$).  

Wish there was a Denny’s close enough for me to find out for myself. 

Let me know if you went to Denny’s and what you thought.