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Chain LeaderEditorial Archives2005 — October 15 — Community

Free Enterprise
Raising Cane’s Chicken Fingers gives away its signature product to build traffic in new markets.

Raising Cane’s places discount coupons in workers’ paychecks to bring in customers and create brand awareness in new markets.

Here’s something every marketer wants: guest traffic. The more, the merrier. But luring customers to a new restaurant in unfamiliar territory can be a strenuous task for small chains lacking broadcast media budgets.

That was the challenge facing Raising Cane’s Chicken Fingers, the Baton Rouge, La.-based chain that opened a unit in Lewisville, Texas, last November. It solved the problem using the most powerful word in marketing: “free.”

While giving away its signature combo meals during a 13-week promotion, traffic jumped as much as 20 percent, though long-term effects are uncertain, officials admit. Still, Raising Cane’s is duplicating the neighborhood-marketing strategy in Houston, the chain’s newest market, to build brand awareness.

Until the move to the Lone Star state, the quick-service operation hadn’t sweated guest counts. In its first eight years, founder and CEO Todd Graves had clustered restaurants in Louisiana and Mississippi, making broadcast media affordable. The company’s reputation for friendly service and a menu limited to cooked-to-order chicken fingers, coleslaw, fries, sauce and Texas toast won adherents. “If we get a customer in, they will be a customer for life,” says Graves, an admirer of Chick-fil-A and In-N-Out Burger.

Chicken Fingers Anonymous
But entering the restaurant-rich suburbs of Dallas without brand identity is another thing entirely—and brand identity was something Raising Cane’s didn’t have in Lewisville. “I’ve seen a lot of restaurants go in and out of business in Lewisville,” says restaurant consultant Lane Cardwell, a longtime Dallas resident.

Raising Cane’s Chicken Fingers
Baton Rouge, La.
Average Unit Volume
$1.9 million (company estimate)
2005 Revenues
$50 million (company estimate)
Average Check
Expansion Plans

2 in 2005

Still, recalls Raising Cane’s Director of Marketing Renee Trusty, when the Lewisville store opened in November, business was good, and she didn’t see the need for launching a campaign so close to Thanksgiving. “During the holidays customers are bombarded with offerings. Plus, we didn’t want to impede the operations of a new store,” she says.

By January, however, the honeymoon was over, too early by company standards. “Sales were holding, but we wanted to maintain sales consistency,” she says.

The company turned to Tim McCarthy, a recently signed franchisee and a marketing consultant who helped Graves define his concept and develop a menu strategy. McCarthy ran a relationship-marketing business in Mentor, Ohio, whose customers were primarily restaurant chains trying to boost traffic without indiscriminately discounting.

His tactic was simple: Put a discount coupon in a worker’s paycheck. Using a Web site called, McCarthy showed Raising Cane’s marketing executives the type and number of businesses within the restaurant’s trade area. The executives chose the businesses that they wanted to distribute the coupons to based on the chain’s customer profile, while also determining the offering and the length of the campaign.

Management offered a free Box Combo per coupon. The signature product contains four chicken fingers, fries, coleslaw, Texas toast and a 22-ounce drink. The box, which is the chain’s best-selling selection, was easy for the crew to produce. “We wanted to give customers something perfect,” Trusty says.

Trusty liked the relationship marketing because she could target Raising Cane’s customers. “It’s perceived to be a special offering,” she says, adding the chain does not discount products.

“The employer is doing it as a free benefit,” says McCarthy, explaining his company generates a permission letter over the signature of a unit’s general manager. The letter directs the employer to reply to a Web site and an 800 number. GMs call the employers if they don’t hear from them.

Bull’s-Eye Marketing
The 13-week paycheck-stuffer campaign, which distributed 20,000 coupons among 285 employers, boosted customer counts by 10 percent to 20 percent, Trusty claims. “Eighty-three percent of customers were first-timers, and more than 50 percent of the customers brought someone with them,” she says.

The redemption rate was 39 percent. Customers redeemed coupons slowly at first, with business picking up significantly in weeks three, four and five. To avoid pressuring the kitchen in the new Houston store, Trusty “dropped” coupons at half of the 450 businesses assigned to the program. “We’re a cooked-to-order product, and we try to keep it simple for operations,” she says.

Ultimately, the company wants to share the sales and traffic data they have collected with franchisees in expensive media markets. Says Trusty: “This is a replacement strategy for brand-building when mass media is unaffordable.”

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