Marketing MathExecuting Local Store Marketing

Facilitator: David Buckley, CMO, Sears Hometown & Outlet Stores @DavidJBuckleyPanelists: Jason Mann, Owner/Area Representative, Planet Smoothie & Tasti d'LiteRandy DuBoise, Owner, Meineke; Christina Coy, Director of Marketing, Pie Five Pizza @piefivepizza

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• 72.5% of respondent’s Franchisees HAVE a Marketing Plan• 17.4% Do Not Have a Marketing Plan• 10.1% of respondents don’t know if their Franchisees have a marketing

plan.

Most Franchisees have local marketing plans

zcubator.com | info@zcubator.com | 1.800.280.8305

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• 21.7% ALWAYS set specific goals• 18.8% NEVER set specific goals• 8.7% DON’T KNOW if specific goals are set for each local promotional

campaign

50.7% Set Specific Goals For Each Local Promotional Campaign SOMETIMES

zcubator.com | info@zcubator.com | 1.800.280.8305

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Results are across the board when it comes to satisfaction with their 2013 Local Marketing Strategy, though 32.4% are Somewhat Satisfied, followed by 31.1% Satisfied.

zcubator.com | info@zcubator.com | 1.800.280.8305

Do you measure the return on investment (ROI) that is achieved from the dollars you spend on

your local marketing campaigns in these areas?

Campaign Type Always Sometimes Never We don’t use this channel

I don’t know

Pay Per Click 46.9% 21.9% 9.4% 18.8% 3.1%

Email Campaigns 44.4% 33.3% 14.3% 4.8% 3.2%

Direct Mail 40.0% 32.3% 7.7% 15.4% 4.6%

Flyers 26.2% 30.8% 8.5% 20.0% 4.6%

Coupons 25.0% 28.1% 9.4% 32.8% 4.7%

zcubator.com | info@zcubator.com | 1.800.280.8305

What are your top THREE greatest local franchise marketing challenges?

Local Franchisee Marketing Challenges 1 2 3

Lack of budget 59.4% 21.9% 18.8%

Lead generation 43.8% 37.5% 18.8%

Franchisee compliance 26.1% 26.1% 47.8%Disparate systems to handle all media channels that don’t ‘talk’ to each other / don’t work together well

18.2% 18.2% 63.6%

Hard to keep up with all of the new media channels 20.0% 50.0% 30.0%

Hiring marketing talent at the corporate level 23.1% 30.8% 46.2%Marketing to my franchisee customer database 18.2% 72.7% 9.1%

Oversight over what franchisee is doing for marketing efforts 23.1% 42.3% 34.6%

Other 40.0% 20.0% 40.0%Don’t know / N/A 12.5% 12.5% 75.0%

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zcubator.com | info@zcubator.com | 1.800.280.8305

NMFBrand

AwarenessStrategySystem

PromotionsAnnual Calendar

Co-OpMarket-wide

LSMLocal Advertising

Market-wide Sponsorships

LSMGrassroots Mktg

Community Oriented

Field Mktg Support

LSM Programs/Tools

4 TierMarketi ng

Strategy

Corporate Responsibility

Franchisee’s Responsibility

2% National Marketing

1% Local Store Marketing

1% Regional Advertising Co-Op

Contributions to Local Advertising Media

National Marketing Fund

70% Traditional Advertising— DMA wide Coupon Drops in the Orlando Sentinel

— Supports NMF Promotions on a direct Local Level

— Reach 380K 4 x’s a year

25% Events Support— Participation in events of 1000 people or more

— 15 + events or more with an average of 2500 participants

Co-op Budget Allocation

90% Support Collateral and Tools— Coupons

— Support tools i.e. Tent, table clothe, flags, banners

10% Loyalty Program

LSM Budget Allocation

Location

Coupon or Discount Marketing

Purpose - to drive trial and frequency Advantages:

— Easy to track

— Instant gratification

— Tangible results

— Drives traffic

Disadvantages: — Cutting price to gain customers

— Customers loyal to discounts may not be loyal your business

Measuring tools - Sales Comps, Customer Count, Ticket Average— General Cost: $10 to $25 per 1000 people hit

— Return: 1- 5% of total drop depending on aggressiveness of discount and type of coupon guide

Purpose - Build brand awareness, drive traffic and create loyal customers

Advantages: — Direct touch of potential customers— direct dialogue— Product sampling opportunity— potential catering opportunity

Disadvantages: — Labor intensive— returns may not be instant— hard to track impact

Measuring tools: immediate coupon redemption from the event, customer count increase over time— General Cost: Tools $1000 with tent, table clothe, flags (add $2500 for wrapped vehicle); $75

to $400 an event including product and labor (entry fees extra)— Return: Based active event marketers 8 to 15% per year growth

Event Based Marketing

Purpose – Reward the frequent and VIP customers with direct communication of offers and messages

Advantages: — Text based technologically relevant— Rewards customers building loyalty— instant ability to drive traffic— 100% electronically tracking— Highly targeted campaign 0-30,60,90,120 etc…

Disadvantage: — Discount and coupon based marketing— drag down ticket average and food cost

Measuring Tools: Cloud based real time activity and measurement based tools— Cost: $25 – $250 + per month depending on number of offers sent out— Return: Direct customer impact 40 to 60 customer per campaign

Loyalty Program – Plum Rewards

MerchantNew

CustsCust

Visits Coupons GCsCust

ActivitiesTotal Visits

Total Custs

Receiving Coupons RC %

Loyalty Only LO % Points

Planet Smoothie - Crane's Roost

3 38 2 0 3 156328 25929 4192 16.17 % 21737 83.83 % 38

Planet Smoothie - Sports Authority Ctr

4 57 6 0 6 118509 17611 2762 15.68 % 14849 84.32 % 54

Planet Smoothie - Waterford Lakes

6 40 6 0 8 151528 24390 4063 16.66 % 20327 83.34 % 39

Total 13 135 14 0 17 426365 67930 11017 16.22 % 56913 83.78 %

Loyalty by the #’s

Loyalty by the #’sCampaign Type Coupon Text Type Sent Redeemed Ratio Begin Date End Date Sent Date myPR

Regular Campaign

We MISS U, come see what's new at ur Planet Smoothie, 50% OFF ur purchase! Exp 1/26

SINGLE USE 2835 70 2.47% 1/22/2014 12:00:00 AM

1/26/2014 10:00:00 PM

1/22/2014 9:25:13 AM

Regular Campaign

Chilly or not we are HOT, try our CHERRY TART! 20% off any smoothie. Exp 11/14

SINGLE USE 1353 38 2.81% 11/13/2013 12:00:00 AM

11/14/2013 11:30:00 PM

11/13/2013 11:35:16 AM

Regular Campaign

Go GREEK! $2 off ANY Greek Yogurt Smoothie exp 9/27

SINGLE USE 2081 51 2.45% 9/19/2013 12:00:00 AM

9/27/2013 11:30:00 PM

9/19/2013 9:36:45 AM

Regular Campaign

REFRESH ur SUMMER with our 3 Blazing Summer Smoothies! 20% OFF exp 7/25

SINGLE USE 2077 69 3.32% 7/23/2013 12:00:00 AM

7/25/2013 11:00:00 PM

7/23/2013 11:56:42 AM

2014 Transition: Discount Marketing to Brand Loyalty

Hired an Advertising Agency Initiatives:

— Consolidate Facebook pages in the region and have all social media managed

— Manage all map based and review based searches i.e. Yelp, Google, etc

— Move away from traditional couponing and move towards Digital Marketing

— Manage all other types of Marketing efforts

— Event budget will increase

— Social Media will become an integral piece of our social media efforts

Individual pizzas ordered “sandwich style”

One size, one price, unlimited toppings in under 5 minutes

Four crusts to choose from, including gluten free and whole grain

7 sauces & over 25 toppings to create your perfect personal pizza

20 locations & commitments for 160 more!

not your average

pizza

National vs. Local Marketing Spend

National Marketing Spend• Brand Strategy• Public Relations (Natl. & Local)• Consumer Research• Customer Loyalty• National Promotions/LTOs

• Local Store Marketing• Community Involvement• Event Marketing

Local Marketing Spend

Objective: Look for ways to attract new customers within 3-5 mile radius of restaurant.

Tactic: Contacted largest apartment complex near the restaurant to find a marketing opportunity. Placed ad in resident magazine.

Offer: Residents were given a FREE pizza (regular price $6.79) when they brought in the ad.

Cost: $1,443 (includes cost of ad in publication & food cost)

Revenue: $1,920

Result:

— ROI 33%

— Redeemed 7.3%

A little work = a lot of new customers

Pie-Advocates are a Portion of the Pie

Objective: Look for ways to increase brand awareness & sales at two locations near college campuses.

Tactic: Hired two students to be brand advocates (aka “Pie-Advocates”) for 14 weeks with specific goals per week.

Offers: $5 pizza and BOGO.

Cost: $3,900 (includes food cost, cost for promotional materials & hourly wage)

Revenue: $5,458

Results:

— ROI of 153.6%

— Brand awareness at school functions and “walking billboards”

— New opportunities discovered for future marketing efforts

Loyalty is the New Discount

Objective: Reduce discounts & increase frequency

Tactic: Implement loyalty program to incentivize customers to visit more often.

Offers: Points based (2 points per pizza purchase. 20 points = free pizza)

— Implement double points days to increase frequency & traffic

Results:

— Double points increased traffic an average of 15%

— Double points increased sales an average of 9%

— Discount percent went down by 2 points

— Testing new offers such as triple points & points for add-ons, which have also proven to increase traffic & sales