Serving up Free

So what do you do when you have been around forever and newer brands seem to have passed you by? And yes, bitching and moaning won’t help. First, of course, you’ve got to talk to your lapsed customers and find out what’s wrong. Then you’ve got to fix the problem, typically by upgrading your product or service. And then you need to do something dramatic, something newsworthy, something disruptive that causes your lapsed customers to become reacquainted.

“Nice theory Drew but does it work?” You bet your sweet hotcakes it does. Just ask Denny’s. Denny’s? Yes, the very same brand that you have been driving by everyday and probably haven’t eaten at for 10 or more years. Denny’s who very familiarity caused it to blend into the landscape. Eight years ago, CEO Nelson Marchioli described his company as “in a ditch.” It took him most of that time to fix the food quality, add new products and get the service up to par. And once it was fixed, he knew they needed to do something dramatic to get folks reacquainted with his restaurants.

Marchioli is quoted in USA Today as saying “I’d rather give something away than discount it.” He added, “if I’ve got something that I think is wonderful, I want to get it into the mouths of customers.” Thus was born their “free Grand Slam breakfast” campaign that was kicked off with a three million dollar ad on the SuperBowl. The results of their $5 million marketing investment are nothing short of astounding:

• Denny’s served roughly 2 million free meals on Tuesday (2/3/09)
• The campaign generated over $50 million in PR coverage
• Denny’s and related promotional terms like “free Grand Slam breakfast” were 5 of the top 40 search terms on Google Tuesday
• Denny’s sold enough high-margin beverages to pay for the cost of the food
• Denny’s generated tremendous good will among many of the customers that visited

“Free is an emotional hot button. When free is concerned, there is not downside” says Duke professor Dan Ariely. So Denny’s used the promise of free food to get back on consumer’s radar. Smartly, Denny’s was ready for the burst of attention both online and in their stores. Denny’s purchased several keywords to make sure consumers could find their local restaurant as they searched online. In-store, Denny’s doubled their staff to make sure their new customers had a positive experience.

Time will tell if this was simply a blip on the radar or a new beginning for old Denny’s. In the meantime, feel free to serve up something free to your lapsed customers and see what kind of sizzling response you can cook up.