Recently, Limited-Time Offers (LTOs) have surged in popularity, with Technomic reporting a 53% increase over the past four years, highlighting their growing importance in the industry.
In my six years of experience working with restaurants, I’ve seen firsthand how effective LTOs can be in driving sales and engaging customers.
In this article, I’ll explain what LTOs are, why they’re important, and how to implement them effectively to boost traffic and restaurant profits.
Key Takeaways
- LTOs Boost Restaurant Sales: Studies show that 91% of people are more likely to visit a restaurant when new menu items are offered. By introducing an LTO, you create a sense of urgency, test new flavors, and spark conversation among customers. Using an online ordering system can capture this increased interest by allowing customers to place orders directly through your website or app easily.
- Create Urgency to Drive Action: Consumers are motivated to act quickly when they know an offer is time-sensitive or has limited availability. Incorporate restaurant marketing tools like email newsletters and social media ads to continuously remind customers of the urgency of your LTO and drive immediate action.
- Offer Unique Items to Stand Out: With 74% of consumers seeking new food trends, LTOs are essential for keeping customers engaged and coming back for more. Unique LTOs capture customer interest and drive sales by offering new, exclusive menu items. Regularly introducing fresh LTOs satisfies customers’ craving for novelty and keeps them coming back for more.
- LTOs Can Increase Profit Margins: Research shows that LTOs can increase sales by up to 20%, making them a powerful revenue-boosting tool for restaurants. Offering premium or exclusive items at strategic prices helps improve restaurant profit margins while maximizing restaurant revenue.
- Leverage Seasonal Trends for Relevance: Seasonal LTOs drive sales, as 66% of consumers prioritize flavor and ingredients when making food choices. LTOs often feature seasonal flavors, and 65% of consumers are drawn to them during events like Christmas and Halloween, making them a powerful way to attract customers based on the time of year.
- Customer Engagement Drives Loyalty: 52% of consumers consider an appealing limited-time offer a key factor in choosing which restaurant to visit. Engaging LTOs encourage repeat visits, help build brand loyalty, and keep your restaurant top-of-mind.
- Minimize Waste with LTOs: LTOs enable you to efficiently sell ingredients with a short shelf life, thereby reducing food waste in restaurants and optimizing the use of your inventory.
- Monitor and Optimize LTO Performance: Collecting customer feedback and analyzing the success of each LTO helps you improve future campaigns. By incorporating restaurant survey questions, you can ensure greater customer satisfaction and a higher return on investment.
What Is an LTO and What Does LTO Stand For?
A limited-time offer (LTO) is a promotion or menu item available for a short, specific period. The limited-time offer definition refers to an exclusive deal, item, or service available only for a set time, creating urgency and excitement among customers.
LTOs can range from seasonal flavors, like the popular pumpkin spice latte, to special menu items or discounted deals.
LTO Meaning in Food: What It Means for Restaurants
In the food service industry, an LTO restaurant refers to a limited-time menu item or a set of menu items available for a short, specific period. For example, a restaurant might offer a limited-time appetizer, like truffle mac and cheese during the winter, or a flash sale on tropical cocktails, available at half price every Friday in the summer.
Some restaurants take it a step further with an LTO menu, featuring seasonal or unique dishes available for a limited time. A steakhouse might offer a “New Year’s Eve Steak Special,” while a bakery could introduce a weekend-only pastry menu with items like cinnamon rolls or fruit tarts.
I’ve prepared a list of the most common types of limited-time offers below.
- Seasonal LTOs: Tied to holidays or seasons, like Christmas or summer menu items.
- Event-Based LTOs: Linked to events, such as sports games or festivals.
- Menu Innovation LTOs: New or experimental dishes to test customer interest.
- Discount LTOs: These are limited-time price reductions on menu items, such as restaurant discounts, designed to drive visits and attract customers.
- Combo LTOs: Bundled items at a discounted price, like meal deals.
Flash LTOs: Short-term offers, lasting a few hours or a day. - Cross-Promotional LTOs: Joint restaurant promotions with other brands for a limited time.
Benefits of LTOs for Restaurants
Now that we’ve covered the basics of LTOs, let’s explore the key benefits they offer for restaurants. Below, I’ll highlight the advantages of implementing a successful LTO in your business.
1. Increased Foot Traffic
One of the key benefits of LTO food is its ability to attract more customers to your restaurant by offering a limited-time promotion that creates a sense of urgency to visit before the offer expires.
This surge in restaurant foot traffic can help fill seats during slower periods and boost overall business.
- Starbucks’ 50% Friday discount for app users in May boosted foot traffic, with visits on May 10th, 2024, jumping 20% above the year-to-date average, compared to a 1.1% drop on May 3rd.
- McDonald’s boosted foot traffic with its $5 Meal Deal, offering a McDouble or McChicken, Chicken McNuggets, fries, and a soft drink. Following the June 25, 2024, launch, visits surged, with June 25 being the busiest Tuesday of the year, drawing 8% more visits than the year-to-date average.
Learn more about how to attract new customers to your restaurant.
2. Boosted Sales
Most successful LTOs drive higher sales by attracting customers who are eager to try exclusive or discounted menu items. These promotions also help keep menus fresh, encouraging repeat visits and boosting revenue during the promotion period.
Our customers report that setting up LTOs on their menus through their websites with online ordering led to a 17% increase in sales. They leveraged restaurant marketing tools, including newsletters, SMS, and push notifications via the app, to effectively inform their customers about the special offer.
3. Higher Profit Margins
LTOs can lead to higher profit margins by offering premium or exclusive items at a higher price point, increasing the perceived value of the dish. These limited-time offerings allow restaurants to capitalize on customer demand while maintaining strong profitability.
By integrating an online ordering system, you can easily sell these premium items directly through your website or app, reaching a wider audience and boosting sales with minimal effort.
4. Testing New Recipes
LTOs offer a valuable opportunity for restaurants to test new recipes and gauge customer interest without committing to a permanent menu item. By offering new or experimental dishes for a limited time, restaurants can assess customer feedback and adjust recipes based on demand.
- 41% of consumers prefer exclusive recipes they can’t find elsewhere.
- Consumers are most likely to buy LTOs featuring unique burgers and pizzas, with 55% and 64%, respectively, preferring new options over their favorites. For operators new to LTOs, these popular items are a good starting point, as center-of-the-plate dishes are easier to promote.
5. Customer Engagement and Loyalty
LTOs help engage customers by offering something new and exclusive, which can strengthen their connection to your restaurant. When customers enjoy a unique offering, they’re more likely to return, building brand loyalty and encouraging repeat visits.
Repetition is key to LTO success. 42% of consumers believe that an annual limited-time offer (LTO) enhances the relevance of an item, and 17% reported ordering a returning LTO they had enjoyed previously, which helps build customer loyalty.
Learn more about customer engagement and how to increase customer loyalty in a restaurant.
6. Attracting Attention
LTOs are a great way to capture attention, as 64% of consumers purchase LTOs even when they wouldn’t have made a purchase otherwise. This helps generate excitement and draw in new customers.
7. Minimizing Food Waste
LTOs help reduce food waste by enabling restaurants to use ingredients with a short shelf life in limited-time dishes, improving restaurant inventory management. This strategy ensures perishable items are used efficiently, minimizing the risk of spoilage.
By better managing inventory and food costs, restaurants can boost profitability while reducing waste.
8. Enhanced Brand Visibility
LTOs can increase brand visibility by creating buzz around exclusive or seasonal menu items. Promoting these limited-time offerings on restaurant social media and other marketing channels helps attract new customers, keeps your restaurant top-of-mind, and strengthens your brand’s presence.
How to Implement an Effective LTO Strategy
Now that I’ve covered the benefits of LTOs, let’s dive into how to implement an effective LTO strategy. Below, I’ll share a few tips to help you make the most of limited-time offers in your restaurant.
1. Conduct Market Research
Before launching an LTO, it’s essential to understand your restaurant’s target audience and their preferences. Conducting market research helps you identify which menu items resonate most with your audience and what food trends are popular, giving insight into consumer behavior.
This ensures that your LTO will appeal to customers and meet their expectations.
2. Craft Clear Messaging
Effective messaging is key to a successful LTO. Clearly communicate the value and urgency of your limited-time offer, ensuring customers understand exactly what’s being offered and why they should act quickly.
Use restaurant communication tools, such as signage, digital ads, and social media posts, to deliver this message.
3. Leverage Promotional Channels
Utilize a range of promotional channels to disseminate information about your LTO, including social media, restaurant newsletter, email campaigns, and your restaurant’s website.
By utilizing both online and offline channels, you can reach a wider audience and build excitement across different platforms, tracking the impact using sales data.
4. Train Your Staff
Ensure that restaurant employees are well-informed about the details of the LTO, including its duration and pricing.
A well-trained team can engage customers, answer questions, and encourage them to try the special offer, driving success and enhancing restaurant customer service.
5. Collect Feedback
After the LTO ends, gather feedback from both customers and staff at the restaurant to understand what worked and what didn’t. Use surveys, online reviews, and direct conversations to assess consumer preferences and gather insights.
Analyzing this feedback, along with restaurant metrics, will help refine future LTO strategies and enhance customer satisfaction.
Top Strategies to Maximize the Impact of Your LTO
Now, I will summarize the top strategies to maximize the impact of your LTO. These tactics will help ensure your promotions are effective and drive the results you’re looking for.
1. Create a Sense of Urgency
Encourage customers to act quickly by emphasizing the limited-time nature of your LTO. The fear of missing out (FOMO) can prompt faster decisions, driving more immediate visits and purchases.
Incorporate restaurant marketing tools like email newsletters, SMS campaigns, and social media ads to consistently remind customers of the urgency of your LTO and prompt immediate action.
McDonald’s McRib is a perfect example of creating urgency. The sandwich is available only for a limited time each year, and the company’s advertising highlights this scarcity, prompting customers to visit before it’s gone.
2. Offer Something Unique
Stand out from the competition by offering something special that can’t be found elsewhere. Whether it’s a unique dish or an exclusive experience, customers are drawn to offers that are different and exciting.
To maximize sales, use suggestive selling by training your staff to recommend these unique dishes, emphasizing their exclusivity and limited availability.
3. Keep the Offer Limited
By restricting the availability of your LTO, you increase its perceived value. Limiting access makes the offer feel more exclusive and urgent, motivating customers to take advantage before it’s gone.
To further drive urgency, incorporate promotional materials highlighting that the offer is only available for a short period, encouraging customers to act quickly.
Starbucks keeps its seasonal offerings limited, such as the Pumpkin Spice Latte, which is available only during the fall months. The limited-time nature of the drink boosts demand, making it a staple of Starbucks’ LTO strategy.
4. Leverage Seasonal Trends
Take advantage of seasonal events, holidays, or flavors to keep your current LTO relevant and timely. Seasonal offerings naturally generate interest, as customers often seek new and exciting items that align with the time of year.
Dunkin’ effectively taps into seasonal trends with its limited-time holiday coffee flavors, such as Peppermint Mocha and Gingerbread Latte. These seasonal drinks align with the winter holidays, creating excitement and encouraging customers to visit Dunkin’ for a festive, time-sensitive experience.
5. Align with Your Brand and Know Your Audience
Make sure your LTO aligns with your restaurant’s identity and values. Understanding your target audience’s tastes and preferences ensures the offer resonates and drives engagement.
For example, if your customers are primarily office workers, you can promote your LTOs as quick and convenient lunch options while integrating a restaurant loyalty program to encourage repeat visits and reward frequent customers.
If your audience is primarily teenagers, consider using Instagram for restaurants to showcase trendy, Instagram-worthy items and drive interest through visually engaging posts or promotions.
Tailoring your LTO to your audience makes it more likely to succeed.
6. Deliver Real Value
Offer something that feels worthwhile to your customers. Whether it’s through competitive menu pricing, unique flavors, or special deals, customers will return if they feel they’re getting a valuable experience.
If you’re unsure what to offer, don’t overcomplicate things—your customers are an excellent source of information. Ask them directly what LTOs they’d like to see at your restaurant to ensure they feel they’re receiving true value.
Chipotle often runs limited-time “Buy One, Get One” (BOGO) promotions, which offer real value to customers, especially during the holidays. These promotions drive foot traffic and encourage customers to return, knowing they’ll get a solid deal.
