The quick-service-restaurant industry is one of the sectors that are expected to continue growing steadily in the U.S. As competition multiplies, QSR marketing needs to become more precise, and tailored for specific audiences. 

What Does QSR Marketing Mean?

Quick-service restaurants are those where consumers pay for food before eating. In the U.S., QSRs typically sell burgers, sandwiches, ethnic foods, pizza, pasta, and chicken. This industry excludes coffee and snack shops. In recent years, QSRs have started to diversify as a result of evolving consumer behavior and preferences. Thus, the space has become more crowded.

QSR brands have to be smart about their marketing. They already have two main advantages: low prices and convenience. Even though the category has performed well recently, as shown by the US $273 billion in revenue and an average yearly growth of 4.1% in the last five years, heavy competition forces QSR operators to differentiate in a fierce battle where smarts mean everything. 

QSR Marketing expert
Alex Tokatlian

One way to be outstanding is by offering outstanding experiences. In the words of Alex Tokatlian, Brand Marketing Director at Marco’s Pizza and until late 2019 Advertising Manager at Domino’s Pizza*,  “experience matters a 100%. It’s different for our category because people are mostly enjoying their pizzas outside of the restaurants. They get it delivered to their home, but we do everything we can with technology to make the experience as easy and as seamless as possible. We’ve done things like Domino’s Hot Spots, that mean you don’t need a specific address to receive a pizza, you can have it delivered to the beach, the park, etc. We find ways to bring meaningful service innovation to life, just to make that pizza experience easier and faster.”

Experience matters a 100%.It’s different for our category because people are mostly enjoying their pizzas outside of the restaurants.

How Quickly is the QSR Marketing Industry Growing?

The QSR industry in the United States is forecasted to reach US $731.8 billion by 2024. The main factor driving the industry growth is the digitalization of food services, including anticipated reservations, orders, and online payment. This is a great opportunity for marketers, as digital advertising is expected to grow from 36.1% in 2019 to 43.8% of total QSR Marketing by 2023.

In 2018, McDonald’s was the top spender within the category. With US $761 million spent in ad expenditures, the chain was way ahead of brands such as Domino’s, on the second spot with US $418 million, and Taco Bell on the third spot with US $415 million.

QSR Marketing Top Spenders
Top 10 QSR Marketing Spenders. Source: Statista

What’s the Role of Technology?

A recent report by the National Restaurant Association used a forecasting approach based on questionnaires sent to experts to predict the future of QSRs by 2030. Three out of five developments center around technology: mobile payments, handheld payment terminals, and a majority of digitally-placed takeout or delivery orders placed digitally.

QSR marketing exampleEvidently, QSR marketing should take this into account. We asked Alex Tokatlian about how Domino’s is taking advantage of technology to improve marketing. He told Portada about their ground-breaking initiative “Points for Pies”, a loyalty program that rewards consumers of the pizza category regardless of where they eat. “It was a big effort right before the super bowl, the first of its kind as far as we know,” shared Tokatlian. “I don’t think there’s been another brand willing to reward consumers for participating in the category, not specific to the brand.”

Also, the program is completely mobile-based and uses artificial intelligence. “We know technology is highly relevant in the multicultural segment, and we had the experience available in Spanish as well,” commented Tokatlian. “It was also our first time using AI in this capacity. We had a “Pie-dentifier” built into the app, which scanned the images you put it on and it had to decide whether it was pizza or not. If it was pizza, we awarded the points to the customer.”

QSR Marketing and the Multicultural Opportunity

According to recent data, 40% of America’s population will be multicultural by 2021. Also, Hispanics account for 20% of QSR sales. “Hispanics are also more family-oriented when eating out,” mentioned Geoscape CEO César Melgoza to QSR magazine. “Half of Hispanic restaurant visits from Spanish-dominant Hispanics include parties with children, and one-third of visits from English-speaking Hispanics include children. This is compared to only 29% of non-Hispanic families who bring their children to restaurants.”

QSR Marketing expert
Aisha Burgos

Moreover, QSRs are important to Hispanics not only in the U.S., but also in their origin countries. “The QSR category is very relevant for Hispanics,” shared Aisha Burgos, SVP of Digo Hispanic Media. “In Puerto Rico we estimate that there are 1,300 quick service restaurants in an island that measures 100×35 miles. According to Scarborough, 88% of the population of Puerto Rico have visited a QSR in the past 30 days. We see how these restaurants are using omnichannel strategies. They’re trying to connect with the right person at the right moment with the right message.

 

 

Why Digitalization is the Key According to Digo Hispanic Media

Burgos agrees that digitalization is a crucial component of QSR marketing growth and efficiency. “In digital, we’re seeing a lot of different strategies that include high impact display banners when they are launching a new product,” she explained. “This is a very effective strategy since it helps them create awareness in the first stage of the funnel. Some examples of high impact banners that they use include formats like the interscroller, rich media, takeovers, and video. We also see how they use day parting in a very effective manner to showcase their menus and products in the correct context for the user.

These restaurants are using omnichannel strategies to ensure they connect with the right person at the right moment with the right message.

Actually, Digo Hispanic Media is seeing an “always on” approach with QSR marketing. “They need the reach and frequency to stay relevant in a competitive landscape,” said Burgos. “In our sites we’ve seen an average of .30% CTR for this category, which is really good since most of these banners don’t necessarily have a clear CTA. Their main focus is to drive traffic to their locations, not their sites. With 90% of traffic coming from mobile, QSRs are very clear that they need to be in mobile.”

 

Brands Know How Important Multicultural Consumers Are

The growth potential and buying power of Hispanics make of this group the most important multicultural audience. For Domino’s Pizza, it’s important to really make Hispanics like they’re included in the brand’s marketing. “We always have to keep an eye in how media consumption habits are changing, the best way to reach the consumer and also what’s most effective for our franchisees,” said Tokatlian. “So we’re always trying to understand media behavior and how to reach different audiences. Specifically for multicultural audiences, we think tailored messages make more sense. We’re very disciplined in our approach, we’re very much into the data, we test and learn everything to make sure the investments we’re making are effectively driving sales.

A customized message is important, but you have to find a balance between broad general marketing and where it makes sense to send a more nuanced message.

In fact, Hispanics are a very important part of business for Domino’s. “As a national brand we have a footprint all over the country in major cities, especially in markets with high Hispanic populations; 20% of stores are in high Hispanic markets and those stores account for 25% of our sales,” shared Tokatlian. “For the multicultural segment, we did a spot featuring an employee explaining the ‘Points for Pies’ program. He goes around different situations and different parts of the city showing ways in which people enjoy pizza. We had a corner slice shop, eating pizza at home with the family… We used examples that are relevant for that audience, beyond just language.”

Furthermore, Domino’s genuinely cares about giving back to the community. Their employees have the possibility to become franchisees, and 90% of Domino’s franchisees started off working at a store. “The people that are franchisees have come from within, they have grown at our stores,” told Tokatlian. “Often they end up serving the communities that they came from. In terms of our national footprint in Hispanic communities, you do get a lot of multicultural franchisees.”

How to Reach Those Multicultural Consumers?

The first obvious answer is data. For Domino’s Pizza, data has been important since before it was smart. As Alex Tokatlian explained, “We needed people’s addresses and phone numbers. We also look at their order preferences to offer improved experiences. Knowing what they like, how they order, how they use our website… It’s very important for us to understand our consumers. The experience is customizable, there are always certain toppings that certain markets order more.”

Furthermore, said Tokatlian, it’s very important to test and learn. “Everything we do, we put the rigor up front to test and measure if things are working or not, which allows us to be more efficient and effective in marketing and media strategies. That’s my best advice. It requires some inspiration but also a sense of discipline. Trying to think ultimately what will be the best thing to drive the business and engage with customers in a way they want. A customized message is important, but you have to find a balance between broad general marketing and where it makes sense to send a more nuanced message. It’s all about being disciplined, leveraging data and taking a measured approach to things.”

* Alex Tokatlian was interviewed for this story in the summer of 2019

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Janet has worked as editor and translator since 2013. After graduating with honors when receiving her Bachelor's Degree in English literature, she began working as a book reviewer for Expansión, the leading business magazine in Mexico. She has also worked as editor of young adult literature for publishing houses like Planeta and Penguin, and she's the author of a book of short stories. She's in the process of getting her MA in English at McGill University. Her interests include arts, good food, and her 8 pets.

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