Stop Right There: You're Not Using Promotions In Your Micro Market?

June 26, 2018
Promotions in micro markets generate returning customers. Incentive program data improves location-specific relationships.

Promotions aren't necessary to make a micro market successful, are they? Actually, promotions engage consumers in the micro market. Promotions give consumers an incentive to come into the micro market, and more importantly, to come back. Whether you call your program a promotion, incentive, loyalty (program), or reward, it's all synonymous for the same thing: being engaged with the consumer and getting them engaged with the micro market. Make the most of your promotions by using the data from your kiosk providers and management systems. Be open to trying new and different promotions, because each location is different.  

Promotions are key to micro market success 

Promotions are drivers of certain behaviors, such as loyalty. Advanced operators understand this to be true, however some, including new to the scene operators, don't see the need for promotions, according to Kevin Galaida, business development consultant, Breakroom Provisions Company. The use of a promotional program is effective in not only staying engaged with the consumer but also with getting to know a location.  

Kevin Searcy, operations manager, Golden Brew, explained that the reason to do promotions is to set up rewards; "this gets the consumers excited and gives them a reason to come back," he said. When first setting up a micro market account, rolling out a promotion or incentive program is a great way to get consumers on board. It can be through a micro market's grand opening, in which fresh food items and other micro market exclusives are offered. Many locations respond well toward a grand opening promotion, for example, where all the employees get $2 loaded on their account towards the micro market, Searcy explained. It's popular for the location to run promotions like this. "Promotions are the biggest selling tool towards getting the location during the initial sale," said Searcy.   

Promotions can give operators an advantage over their competition who don't offer the same incentives. This includes fast food and other out-of-office food establishments that don't incentivize. A promotional program not only keeps consumers on-site but it also develops loyalty within the location. Whatever you'd like to call it, promotion, reward, loyalty, incentive, it is helpful in getting and keeping consumers coming back to your micro market. The work you put into creating promotions will be worth the rewards.  

Step by step 

The basis of doing a promotion is either to introduce a product to the market, or to reintroduce a product and give it a push, explained Amanda Sulc, Director of Category Insights & Strategy, Accent Food Services. However, promotions can be used for many reasons. This is true for encouraging consumers to explore a specific category, to help the location encourage their employees stay on campus during breaks, and many other examples. With many options to offer, it's important to fully understand the promotions you intend to run. 

The operator needs to be educated about the different aspects of the promotions and what there is to offer so that they can then present it to the consumer. "Education is the key to surviving," said Benjamin Thomas, VP of Dreams, Yoke Payments. Get consumers engaged by making them the number one priority. This is invariably the most important step, because if consumers aren't drawn to the promotion then it won't be effective. Get to know the basic information about your location and understand what's typical of your market. This is important in figuring out which promotions will have the most success. From there you can focus and decide on the behaviors you're trying to drive, which you can figure out with consumer data.  

Data is key 

A micro market offers benefits not available in other convenience services, including the ability to analyze end-user data. "Use the platform for what it is," explained Thomas. He went on to explain that by running reports, you can see what's selling, what's popular and what's not at each location. Your management software and kiosk provider are designed to help you succeed. The data will also help you see how your customers are responding to your promotions by calculating the number of consumers making transactions, how many consumers have accounts, and so on.  

Consumer retention is key to a micro market's success. You need to know what makes your customers come back. It could be the food, the atmosphere, the convenience, a mix of all three or other reasons. Focus on the tools you have to drive behavior, instead of the products, explained Galaida. Parlevel's Munson emphasized using data-driven results to determine whether the promotions are good ones.  

Identify the top sellers – again using the data that lets you drill down to minute subsets. Find out what the most popular products are at each location. This can include popular seasonal products. Some locations may prefer a specific category. Use this information to your advantage to create promotions.   

Data also allows you to see the amount of products you're selling, how many consumers are frequenting your micro markets, and how many transactions are taking place. The goal is to get a measurable increase in products, consumers and transactions, explained Galaida. From there you can begin to figure out what behaviors are behind those numbers. The focus here is the behavior of the consumer. If a consumer is engaged, then you know you're on the right track. 

Incentivizing rewards 

The success of micro market incentive programs is dependent on the operators. "It's about being engaged and keeping consumers engaged to make it successful," said Thomas. He went on to explain that the promotion wouldn't be successful if you "set it and forget it."  

Some companies operate promotion programs through reward systems with points, and others work through loyalty marketing instead of points. Searcy's company, Golden Brew, uses a program with points allotted through a reward system. Recurring customers accumulate reward points on their account which they can "cash in" for free items at the micro market, Searcy explained. Consumers respond well to this incentive because it's easy to see how many points they've got stacked up in order get a free item.  

Thomas explained that Yoke Payments has a loyalty program through its app. This promotion program is based on how much the consumer spends, similar to the promotion program at Golden Brew. With Yoke's app rewards, the consumer is incentivized to spend in order to receive rewards at the micro market. The more a consumer spends, the greater the reward. The promotion program was modeled after Starbucks reward program, which has been extremely successful in getting consumers to remain loyal to the store by rewarding them with free coffee along the way.  

Accent Food Services uses an incentive program that incorporates email blasts and a points reward program, explained Sulc. Through a mobile app and kiosks, Accent's promotional program uses consumer information to find what work best, Sulc explained. Another type of promotion that Accent does is through digital signage. For example, it works with kiosk providers to get custom Accent promotions on its kiosks. This helps to give consumers an overview of what items in the micro market are on sale. Accent also runs fundraisers on its kiosks in micro markets. One such fundraiser it ran was for hurricane Harvey relief efforts. It sets up the kiosk promotion so that there is a button on the screen to donate $1, $2, etc., to the fundraiser. Different companies create different incentive programs.  

Digital signage is a popular form of promotion. Along with Accent, Breakroom Provisions also uses digital signage. This type of promotion can be cost-effective for companies to put in because they can be funded by manufacturers and sometimes even locations. "This is important because you need your customers to know what's new; it can also be a program funded by suppliers," said Kevin Galaida, business development consultant, Breakroom Provisions Company, Inc.    

Trial and error 

Some promotions don't work in every micro market. Not all promotions work at every location. Assess the promotion and monitor if it works. Trial and error is part of this process. Give a promotion a trial period, and see how it does. If the promotion doesn't do well, then you know it's time to pull the plug. The best way to figure out what promotion works best for a location is with consumer data and through trial and error. Data can show you what consumers are buying, but you'll have to try out different promotions to figure out which ones consumers prefer. 

Preloaded account cards given out during grand openings can be an effective promotion at some locations. However, there are effective ways to implement this promotion and also ways that don't work so well. Searcy of Golden Brew shared an example of this situation that didn't end up being a great promotion. One operator from Golden Brew would preload each consumer's account with two dollars and preorder all of the cards with the consumers names on them for their micro market accounts. At least one or two locations never used the key cards; instead, the consumers swiped their credit cards or used cash after they entered their account information into the kiosk. This not only wastes money for the location, who has to pay for the key cards and the printing of the employees names on the cards, but it is also a waste of time for the operator. On the other hand, in Sulc's experience, preloaded account cards have been very successful when used at micro market grand openings. It all depends on the location. 

There are many promotions that can be put on different items of food in different product categories, into various combos. A few categories, however, do not do so well when combined. "Don't place promotions on the top five bottom sellers," said Sulc of Accent. After measuring the success of the sales on the bottom-selling items both by themselves and through promotions, Accent found that promotions on the top five bottom sellers wasn't profitable enough to pursue. It doesn't make sense to have a reduced price on items that don't sell well, because it will be a waste of a sale that's already suffering. Further, it won't create headway in gaining interest in the items if they weren't doing well to begin with.  

Finding the promotion that fits best for a location takes a little trial and error in the beginning, but there are still some tried and true promotions that an operator can fall back on.  

This is how we do it 

Different types of combo promotions in the micro market tend to go over well. What's helpful about setting up a combo is that the operator can typically choose which items to put together. There isn't a list of items that have to go together, such as pick one item from List A, List B, and List C. So, operators can be creative in what they decide to bundle. An operator might choose to create a meal combo, in which a fourth item is the promotion or incentive. In this case, the combo could involve chips, a sandwich, soda and a candy bar, where the candy bar is that extra/added item. This promotes the candy bar as a treat, dessert, or an item to eat "for later," explained Galaida. This is a good way to boost sales, too, as the transaction goes from $5 to $6. Another example of a meal deal promotion that's simple yet effective is to buy two items, get one item free. "Usually one of the first two items would be a food item but the operator has full control over what he would like to include in the deal ie. food, beverage, or snack," said Alan Munson, Co-Founder & CCO, Parlevel Systems Inc. "The reason why the food items are the most popular is because they are usually the highest priced items in the market." 

The most common and effective promotion overall is some form of discount on an item in the micro market. Consumers respond well to the reduced retail program used by Accent, explained Sulc. In this promotion, a certain amount, monetary or percentage, is taken off an item. For example, buy any unit, get X amount of dollars off. Searcy's rewards program is also based on a discount promotion, but in this case the consumer can cash in their account points for items in the micro market.  

Another program that is similar to a discount program is Parlevel's most popular promotion. This promotion rewards customers for putting money on their internal wallet within their account. "If someone puts $20 on their internal wallet, then the operator can give then $2, $1, whatever they decide," explained Munson. The operator is able to reward the customer by way of percentage in addition to adding a certain dollar amount to their account.     

Innovative mindset 

Micro market promotions can be used to incentivize certain behavior, such as health and wellness. For example, a promotion in which the consumer only gets points through healthy products, or if the total items purchased are under 600 calories, explained Galaida. Another way to encourage healthy eating is by promoting salads through a "happy hour" promotion on Friday afternoon. For example, "I'm a vending operator. I make salads. I'm at a micro market location but they're closed on Saturday and Sunday. Let me put my salads/whatever is remaining on happy hour pricing after 2:00 PM, because I know they're going to be thrown away by the time I get there on Monday," explained Munson.  

Some of the best promotions are unconventional and out-of-the-box, and involve creative thinking. Some operators will do promotions on specific days or with specific items that they won't usually do, explained Munson. One operator has a location with Tuesday/Friday sushi days. The promotion is run on the kiosk and by email to let consumers know about it and asks them to sign up if they are interested in participating. However, even if someone doesn't sign up, extra sushi is brought in so that people who didn't sign up can purchase it.  

Promotions are the bread and butter of successfully maintaining micro markets. It creates extra traffic and loyal consumers. Not only that, it gets consumers excited and encourages them to come back. There are many different promotions within the parameters of your kiosk provider, and you can also come up with promotions of your own, too. Work with the location to find out what's popular among the employees to come up with creative promotions. If you haven't taken advantage of them, get in touch  with your kiosk or company provider and learn more about how you can get to know your location and consumers better through incentive programs.