What happens when the rules of marketing get thrown out the window, and creative minds go in a new direction? What if instead of buying media and selling a client’s products, marketing agencies say: ‘Let’s just give away the goods for free!’ Sounds implausible, right? Well, it just so happens to be the newest craze in marketing for the food service industry. At Mad4Marketing, we’re always seeking new ways to stay on the cutting edge of modern advertising. That’s why we’re paying close attention to the recent Denny’s Grand Slam Giveaway, an event which took place on Tuesday, February 3rd and set unprecedented return rates with its $5 million “freebie” marketing endeavor.
After seeing a reported 22% revenue decline in the third quarter of 2008, Denny’s decided to reacquaint America with a once-upon-a-time bestseller: the Grand Slam breakfast. The allure of two pancakes, two eggs, two pieces of sausage and two of bacon lost much of its mass appeal as the price rose from its 1977 debut of $1.99 to the $5.99 tag it hefts today. Another detriment to sales is that the Denny’s tradition of sitting around a table for breakfast is all but retired to the Sunday crowd, while weekday commuters opt for a fast cup of coffee paired with anything that can be passed through a drive-up window and consumed with one hand. The mission was to make America reconsider their relationship to the most important meal of the day. And Denny’s thought they could do so by showing them what they were missing-for free.
Like most other marketing endeavors, it began with an ad. But not just any ad-an extremely costly, highly coveted Super Bowl XLIII ad. Denny’s bought a 30-second spot in the third quarter of the Super Bowl for an estimated $3 million. The message was fairly straightforward: come to any of our restaurants between 6:00am and 2:00pm and let us show you what a “serious” well-balanced breakfast looks like. Our treat.
Companies who have tried this tactic before include McDonald’s, Dunkin Donuts and Starbucks, all with equally impressive-albeit far less expensive-results. Starbucks led the most adventurous marketing campaign prior to the Denny’s ad; in response to their first-ever drop in quarterly sales, Starbucks premiered its 2008 Election Day free-coffee-when-you-vote ad during Saturday Night Live, followed by online advertising on Facebook.com. Dunkin Donuts and McDonalds also offered free cups of brew, while similar endeavors from high-profile chains included fast food samples from Ben & Jerry’s and Taco Bell.
But this is the first time that a restaurant geared toward sit-down service attempted the same feat. And it was by far the most expensive per-item giveaway to date in the food service industry, with Grand Slams selling for $6 per meal as opposed to a $1.40 cup of coffee. It was also the first time Denny’s purchased a Super Bowl commercial. Could they succeed? Mad4Marketing was eager to view reports, interested to see what this explorative effort would reveal about consumer responsiveness.
According to the follow-up report from AdAge.com, Denny’s experienced greater turnout than anticipated, and were pleased with the results. After spending a total of $5 million dollars between advertising and food expenses (Grand Slams value at between $1 and $1.50 at cost), Denny’s gave away 2 million of their most famous menu item (about 16% of the Grand Slams sold in the previous year). With a Super Bowl audience of about 98 million viewers, that’s a 2.05% return on their 30-second ad (plus one 15-second post-game spot, and a full-page ad in USA Today). It surpasses the 1% success benchmark set for giveaway promotions. But in terms of impact and revenue, the big question still remains: will customers be returning to pay for the complete breakfast once they’ve sampled it for free?
Naturally, we’re keeping a close eye on Denny’s for further information about sales performance in the coming months. With more than 1,500 stores nationwide, a positive and unanimous result might make other industries consider what a solid giveaway marketing strategy can do for their products, even outside of the food service industry. If nothing else, the Denny’s Grand Slam Giveaway has served as a positive example of thinking outside of the box in terms of marketing. They took a risk. Not only did they embrace a new strategy, but they expanded upon preconceived standards by giving away entire meals and doling out the big bucks to make it happen.
At Mad4Marketing, this display of enterprise certainly piqued our interest and got our thinking caps on. What if a local launderer gave everyone a free day of dry cleaning? We’d certainly gather up last week’s trousers and give it a try. What if a chain of salons gave away free manicures for one afternoon? We imagine lines would form down the block. Free shoes…? Don’t even get us started; we’re taking a sick day! It’s fun to speculate, but in what ways might we at Mad4Marketing follow the Denny’s example and “seriously” push the boundaries of alternative marketing techniques for our clients? You’ll just have to keep an eye on us to find out.
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