Restaurants use mobile scratch cards to engage with millennials

A recent survey from The NPD Group, a retail research firm, found that over one in three decisions on where to eat out are determined by deals. At the same time, millennials are unlikely to cut coupons, so restaurants like McDonald’s, Papa Murphy’s, and Ponderosa are using smartphone apps like Front Flip to lure millennials addicted to their cell phones.

How mobile scratch cards work

Ponderosa steakhouse visitors can scan a QR code on the back of their receipt once they’ve downloaded the Front Flip app on their smartphones. A virtual scratch card will then show up on their screens. Customers rub their fingers across these cards to reveal their prize. Prizes range from discounts, free meals and drinks to gift cards and iPads. Other players in the food category are also using QR codes innovatively.

Pros of mobile scratch cards

Franchisees “were really challenging us to develop something that had a little bit more excitement and the ability to engage guests, especially the younger segment of our demographic,” says Jon Rice, chief marketing officer of Ponderosa’s parent company, Homestyle Dining.

A Front Flip user. Image by Front Flip.

In that sense, the promotion worked. Although only 17% of the chain’s customers are 18-29 years old, Rice says the highest percentage of Front Flip users at the restaurants are 24-34 years old. “People are definitely using it, and they are definitely coming back. We’re breaking down that information to understand if we, in fact, are increasing their frequency. Right now, it appears so,” he says.

There are other benefits. Front Flip’s interface makes it possible for restaurants to “look at the level of activity, what prizes people have won and whether anybody has shared it on Facebook. They can get a feel for whether people are actually excited about it,” says Rice.

Front Flip provides other data that restaurants can use for marketing to customers. “We track what day of week they’re coming, what time of day and how often they come, and all the data goes to the business,” says Sean Beckner, CEO of Front Flip.

To get customers who haven’t visited a restaurant in a month or more to return, Front Flip automatically sends a “gift” the restaurant has picked, at regular intervals.

Costs and cons of mobile scratch cards

Millennials relish eating out. Image by James Hartshorn.

Front Flip charges restaurants $125 monthly for the service. 2,000 eateries across the country have signed up with it. Rival Belly has a slightly different twist. For $50-100, restaurants get an iPad and a customized loyalty scheme. Customers scan a bar code from the app on the iPad, which tracks the points they earn and redeem.

Drawbacks are similar to those seen in traditional loyalty schemes. Customers at Papa Murphy’s franchisees using Front Flip complained that they were not winning often. The restaurant owners agreed to adjust the odds of losing on a given day from 30% to just 7.5%, according to Paul Cox, owner of one of the outlets.

“The [restaurant] market is not expanding, so everyone is in a fight for that one customer,” says Todd Luther, owner of nine McDonald’s, of which eight have Front Flip.  Apps like Front Flip provide instant gratification to millennials, and can amplify eating out to food events. They could be the shot in the arm restaurants need to entice elusive consumers.

Category: QR codes