APT CEO Anthony Bruce discusses recent trends in Big Data analytics.

APT President Patrick O’Reilly discusses how restaurants are using Test & Learn to improve the return on their capital investments.

A recent Businesweek article talks about some interesting menu items which have made their way onto select restaurant menus, often for a limited time. Though limited time offerings (LTOs), such as glazed donut sandwiches, pizza with a cheese pocket crust, or the famous McRib, often garner media attention, understanding whether they are truly profitable can be difficult. Using in-market testing to answer the following questions will help solve this challenge: (more…)

FSR Magazine recently published an article by Jonathan Marek, APT SVP, about strategies to consider both before implementing a loyalty program and once one is in place. Here is the link to the article: http://www.fsrmagazine.com/service/should-you-implement-guest-loyalty-program

Check out a recent byline from APT SVP Jonathan Marek about moving beyond product testing: NRN_Maximize Profit with testing.

APT SVP Jonathan Marek recently wrote a byline in QSR Magazine, which outlines the following five trends for restaurant executives to watch in 2013:

-QSRs taking steps to compete with Fast Casual

-Understanding how to optimize labor given recent legislation

-Determining optimal pricing given increasing commodity and labor costs coupled with continuing consumer pressures

-Using mobile more effectively

-Investing in in-restaurant technologies

Click here to read this article.

Taco Bell has recently begun testing the “$1 Cravings Menu” to replace their “Why Pay More” value menu. According to USA Today, the new menu lists nine items and three new offerings. Despite the value message, the “Cravings” menu is actually a slight price increase over the current “Why Pay More” menu, which includes items at 89 and 99 cents. To measure success of the program, simply looking at order incidence of the new menu items will paint an incomplete picture. For example, it is possible that price-sensitive guests who generally ordered the 89 and 99 cent offerings may visit less frequently. However, existing guests could be trading down from higher-margin offerings, showing order incidence as either flat or even positive.

In order to understand the total restaurant incremental impact of this new menu relative to restaurants that have the “Why Pay More” menu, Taco Bell executives will need to isolate the impact to both total number of guest visits and average check size. Because of the small extent of the price change, it is possible that this new menu will have minimal impact. However, to be most profitable, Taco Bell’s new value menu will need to either have no impact on existing value menu guests (who will then be paying more) or attract incremental guests who will then be drawn to higher-margin purchases, thus increasing check size and guest visits. Alternatively, Taco Bell will find the program to be unprofitable if messaging surrounding the “$1 Cravings Menu” causes too many trade-downs.

Applied Predictive Technologies (APT) announced that P.F. Chang’s China Bistro, Inc., operator of P.F. Chang’s China Bistro and Pei Wei Asian Diner, has signed an agreement to license APT’s Test & Learn Management System™. P.F. Chang’s will use APT to test strategic and tactical initiatives across its network of nearly 400 polished casual dining and quick-casual restaurants.

NRN recently posted an article about the pros and cons of daily deals. The article cites research that reveals “restaurateurs who offered internet daily deal discounts were evenly split about whether or not they would run such promotions again and confirmed that the offers can cannibalize sales.” The article goes on to suggest that in order to make daily deals profitable, restaurants need to “devise a way to limit the deal to new users” and “structure deals to maximize overage, or customer spending above the amount of the offer, to net higher sales and better cover costs.”

A few months ago, APT CEO Anthony Bruce commented on the economics of daily deals in USA Today.  “Companies doing deals ‘get crushed economically’ when existing customers buy deals.” The article continues, “APT, which represents many Fortune 500 retail and restaurants clients including Denny’s and Wendy’s, says daily deals almost never make sense for major national chains.”

As with any marketing investment, testing these types of daily deals, while analyzing attached sales and subsequent visits, is the only way to fully understand program economics.

Bruegger’s Bagels, a QSR with over 300 locations, has once again launched its Bottomless Mug Club. During this annual promotion, Bruegger’s offers guests unlimited coffee for a whole year for less than $200. This promotion is certainly unique, but is it profitable? The simple answer is that this program must be profitable for some guests and not profitable for others. However, in order to fully understand the economics of a promotion like this one, restaurant executives need to consider the following (more…)