Marketing Math

Executing Local Store Marketing Facilitator:

David Buckley, CMO, Sears Hometown & Outlet Stores @DavidJBuckley

Panelists:

Jason Mann, Owner/Area Representative, Planet Smoothie & Tasti d'Lite Randy DuBoise, Owner, Meineke; Christina Coy, Director of Marketing, Pie Five Pizza @piefivepizza

Most Franchisees have local marketing plans

• • •

72.5% of respondent’s Franchisees HAVE a Marketing Plan

17.4% Do Not Have a Marketing Plan 10.1% of respondents don’t know if their Franchisees have a marketing plan.

zcubator.com | [email protected] | 1.800.280.8305

3

• • •

50.7%

Set Specific Goals For Each Local Promotional Campaign SOMETIMES 21.7% ALWAYS set specific goals 18.8% NEVER set specific goals 8.7% DON’T KNOW if specific goals are set for each local promotional campaign

zcubator.com | [email protected] | 1.800.280.8305

4

Results are across the board when it comes to satisfaction with

their 2013 Local Marketing Strategy

, though 32.4% are Somewhat Satisfied, followed by 31.1% Satisfied.

zcubator.com | [email protected] | 1.800.280.8305

5

Do you measure the return on investment (ROI) that is achieved from the dollars you spend on your local marketing campaigns in these areas?

Campaign Type

Pay Per Click Email Campaigns Direct Mail Flyers

Always 46.9% 44.4% 40.0%

26.2% Coupons 25.0%

Sometimes

21.9%

33.3% 32.3% 30.8%

28.1%

Never

9.4%

We don’t use this channel

18.8%

I don’t know

3.1% 14.3% 7.7% 4.8% 15.4% 3.2% 4.6% 8.5% 9.4% 20.0% 32.8% 4.6% 4.7%

zcubator.com | [email protected] | 1.800.280.8305

7

What are your top THREE greatest local franchise marketing challenges? Local Franchisee Marketing Challenges

Lack of budget Lead generation Franchisee compliance Disparate systems to handle all media channels that don’t ‘talk’ to each other / don’t work together well Hard to keep up with all of the new media channels Hiring marketing talent at the corporate level Marketing to my franchisee customer database Oversight over what franchisee is doing for marketing efforts Other Don’t know / N/A

1 59.4% 43.8%

26.1% 18.2% 20.0% 23.1% 18.2% 23.1%

40.0%

12.5%

2

21.9% 37.5% 26.1% 18.2%

50.0%

30.8%

72.7% 42.3%

20.0% 12.5%

3

18.8% 18.8%

47.8% 63.6%

30.0%

46.2%

9.1% 34.6%

40.0% 75.0% zcubator.com | [email protected] | 1.800.280.8305

Co-Op

Market-wide LSM Local Advertising Market-wide Sponsorships Corporate Responsibility Franchisee’s Responsibility

NMF

Brand Awareness Strategy System Promotions Annual Calendar

PR

Local Consumer National Consumer Event Marketing Grand Opening Trade

LSM

Grassroots Mktg Community Oriented Field Mktg Support LSM Programs/Tools

Contributions to Local Advertising Media



2% National Marketing



1% Local Store Marketing



1% Regional Advertising Co-Op

National Marketing Fund

Co-op Budget Allocation

 70% Traditional Advertising — DMA wide Coupon Drops in the Orlando Sentinel — Supports NMF Promotions on a direct Local Level — Reach 380K 4 x’s a year  25% Events Support — Participation in events of 1000 people or more — 15 + events or more with an average of 2500 participants

LSM Budget Allocation

 90% Support Collateral and Tools — Coupons — Support tools i.e. Tent, table clothe, flags, banners  10% Loyalty Program Schools Business Gyms

Location

Churches Apartments

Coupon or Discount Marketing

  Purpose - to drive trial and frequency Advantages: — Easy to track — Instant gratification — Tangible results — Drives traffic  Disadvantages: — — Cutting price to gain customers Customers loyal to discounts may not be loyal your business  Measuring tools - Sales Comps, Customer Count, Ticket Average — General Cost: $10 to $25 per 1000 people hit — Return: 1- 5% of total drop depending on aggressiveness of discount and type of coupon guide



Event Based Marketing

Purpose - Build brand awareness, drive traffic and create loyal customers  Advantages: — — — — Direct touch of potential customers direct dialogue Product sampling opportunity potential catering opportunity  Disadvantages:  — — — Labor intensive returns may not be instant hard to track impact

Measuring tools: immediate coupon redemption from the event, customer count increase over time

— General Cost: Tools $1000 with tent, table clothe, flags (add $2500 for wrapped vehicle); $75 — to $400 an event including product and labor (entry fees extra) Return: Based active event marketers 8 to 15% per year growth

Loyalty Program – Plum Rewards

  Purpose – Reward the frequent and VIP customers with direct communication of offers and messages

Advantages:

— Text based technologically relevant — Rewards customers building loyalty — instant ability to drive traffic — 100% electronically tracking — Highly targeted campaign 0-30,60,90,120 etc… 

Disadvantage:

— Discount and coupon based marketing — drag down ticket average and food cost 

Measuring Tools:

Cloud based real time activity and measurement based tools — Cost: $25 – $250 + per month depending on number of offers sent out — Return: Direct customer impact 40 to 60 customer per campaign

Loyalty by the #’s

Merchant New Custs Cust Visits Coupons GCs Cust Activities

Planet Smoothie Crane's Roost 3 38 2 0

Total Visits Total Custs

3 156328 25929

Receiving Coupons

4192

RC % Loyalty Only

16.17 % 21737

LO % Points

83.83 % 38 Planet Smoothie Sports Authority Ctr 4 57 6 0 6 118509 17611 2762 15.68 % 14849 84.32 % 54 Planet Smoothie Waterford Lakes 6 40 6 0 8 151528 24390 4063 16.66 % 20327 83.34 % 39 Total 13 135 14 0 17 426365 67930 11017 16.22 % 56913 83.78 %

Campaign Type Coupon Text

Regular Campaign Regular Campaign Regular Campaign Regular Campaign

Type

We MISS U, come see what's new at ur Planet Smoothie, 50% OFF ur purchase! Exp 1/26 SINGLE USE Chilly or not we are HOT, try our CHERRY TART! 20% off any smoothie. Exp 11/14 SINGLE USE Go GREEK! $2 off ANY Greek Yogurt Smoothie exp 9/27 REFRESH ur SUMMER with our 3 Blazing Summer Smoothies! 20% OFF exp 7/25 SINGLE USE SINGLE USE

Loyalty by the #’s

Sent Redeemed Ratio Begin Date End Date Sent Date myPR

2835 1353 2081 2077 70 2.47% 1/22/2014 12:00:00 AM 1/26/2014 10:00:00 PM 1/22/2014 9:25:13 AM 38 2.81% 11/13/2013 12:00:00 AM 11/14/2013 11:30:00 PM 11/13/2013 11:35:16 AM 51 2.45% 9/19/2013 12:00:00 AM 9/27/2013 11:30:00 PM 9/19/2013 9:36:45 AM 69 3.32% 7/23/2013 12:00:00 AM 7/25/2013 11:00:00 PM 7/23/2013 11:56:42 AM

2014 Transition: Discount Marketing to Brand Loyalty

  Hired an Advertising Agency Initiatives: — Consolidate Facebook pages in the region and have all social media managed — Manage all map based and review based searches i.e. Yelp, Google, etc — — Move away from traditional couponing and move towards Digital Marketing Manage all other types of Marketing efforts — Event budget will increase — Social Media will become an integral piece of our social media efforts

 Individual pizzas ordered “sandwich style”  One size, one price, unlimited toppings in under 5 minutes  Four crusts to choose from, including gluten free and whole grain   7 sauces & over 25 toppings to create your perfect personal pizza 20 locations & commitments for 160 more!

National vs. Local Marketing Spend

National Marketing Spend • Brand Strategy • Public Relations (Natl. & Local) • Consumer Research • Customer Loyalty • National Promotions/LTOs Local Marketing Spend • Local Store Marketing • Community Involvement • Event Marketing

A little work = a lot of new customers

    Objective: Look for ways to attract new customers within 3-5 mile radius of restaurant.  Tactic: Contacted largest apartment complex near the restaurant to find a marketing opportunity. Placed ad in resident magazine.

 Offer: Residents were given a FREE pizza brought in the ad. (regular price $6.79) when they Cost: $1,443 Result: — — ROI 33% (includes cost of ad in publication & food cost) Revenue: $1,920 Redeemed 7.3%

Pie-Advocates are a Portion of the Pie

      Objective: Look for ways to increase brand awareness & sales at two locations near college campuses. Tactic: Hired two students to be brand advocates (aka “Pie-Advocates”) for 14 weeks with specific goals per week.

Offers: $5 pizza and BOGO. Cost: $3,900 (includes food cost, cost for promotional materials & hourly wage) Revenue: $5,458 Results: — — — ROI of 153.6% Brand awareness at school functions and “walking billboards” New opportunities discovered for future marketing efforts

Loyalty is the New Discount

  Objective: Reduce discounts & increase frequency Tactic: Implement loyalty program to incentivize customers to visit more often.

  Offers: Points based (2 points per pizza purchase. 20 points = free pizza) — Implement double points days to increase frequency & traffic Results: — — — — Double points increased traffic an average of 15% Double points increased sales an average of 9% Discount percent went down by 2 points Testing new offers such as triple points & points for add-ons, which have also proven to increase traffic & sales