According to the chain’s leadership, one of Burger King’s most popular customer incentives will be phased out this year.
In a recent earnings call, The King’s CEO Jose Cil stated that the restaurant will phase out its popular paper coupons, which have worked to attract customers in the door for decades.
The fast-food restaurant, which has fallen to third place in sales behind McDonald’s and Wendy’s, will no longer distribute printed coupons for promotions such as Buy One, Get One for $1 and 2 for $6.
In reality, the business intends to lower the overall volume of promotions it offers. Burger King has traditionally offered significantly better value than its biggest competitors, which may have hindered rather than helped sales.
“For years, we’ve been spreading ourselves too thin across too many messages with mixed results . . . we’ve consistently had the most value constructs in the market, three times as many as our lead competitors, which diluted marketing firepower and added to operational complexity,” Cil told me. “It also confused guests.”
Now, the company will focus on value offers offered through digital interfaces such as the Burger King app, as well as leveraging its Royal Perks customer loyalty program, which was successful when it was rolled out countrywide in the third quarter of this year.
In theory, replacing paper coupons with digital promotions makes perfect sense: there is no way to ensure that a printed coupon reaches an end-user who is likely to use it—if it reaches anyone at all before being discarded.
Digital promos, on the other hand, may be personalized to and given to specific customers, considerably improving the likelihood of them converting to a sale.
However, by removing paper coupons, Burger King risks losing roughly 20% of its potential client base, particularly older Americans.
Customers in the Baby Boomer or older age groups make for 36% of the overall U.S. population, according to PYMNTS.com, and 58% of them do not order food online.
While shifting to digital promotions may help the business attract younger customers, whom it sorely needs, the strategy may also alienate older customers.
The chain’s most recent earnings report was just another disappointment for the company that had announced a return.
Burger King’s third-quarter earnings reveal a 2.8% drop in sales compared to the same period in 2019.