Enhancing Customer Retention & Competitive Edge With Targeted Value Strategy

Challenge

A leading quick-service restaurant (QSR) franchisor in Germany was facing increased competition, driven by stagnating transaction growth over the previous two years. To combat this challenge, the client sought out insights to understand the effectiveness of limited-time offers (LTOs) and identify strategies to enhance customer value perception and retention.

Beyond assessing general preference, the client also wanted to understand which offers would attract competitors’ heavy users and engage their own low- and non-user segments. These insights would be critical for refining their value strategy.

The Solution

Revenue Management Solutions (RMS) deployed a targeted MaxDiff analysis, commonly known as “best to worst scaling”. Known for its precision in identifying the factors that drive consumer preferences, MaxDiff allowed the RMS team to assess what aspects of each deal resonated most with both current and potential customers.

Strategic Insights: This approach allowed RMS to deliver actionable recommendations tailored to distinct customer groups, particularly competitor users and the client’s lighter users.

Survey Scope: RMS evaluated eight recent LTOs from top fast-food brands in Germany, asking respondents to rate “most likely to visit” and “least likely to visit” for each.

Customer Segmentation: Respondents were categorized into heavy, medium, low and non-users of both the client’s brand and competitors, creating a clear picture of customer behaviors and preferences.

Execution and Results

With the MaxDiff survey data, RMS identified the LTO with the highest preference and provided actionable insights into consumer value perception. Key results included:

• Preferred Deals Identified: Specific LTOs with the highest appeal to non-users and low-engagement customers were identified, aimed at driving increased foot traffic.
• Targeted Awareness Strategies: Recommendations were made to increase the visibility of specific menu items among competitor heavy users and the client’s own low- and non-users.
• Value Differentiation: RMS advised the client to highlight operational factors, such as taste, speed and order accuracy, rather than relying solely on price, differentiating their brand in a crowded market.

This study underscored the value of data-driven decisions in responding to shifting market conditions, ultimately bolstering customer retention and strengthening the client’s competitive position.

Key Outcomes

• Leveraged data-driven insights to define a refined retention strategy that resonated with target customers.
• Provided actionable recommendations to help the client gain a competitive edge.
• Identified core drivers of satisfaction compared to top competitors, to strengthen the overall customer experience.