The Lowdown on LTOs

Forget the first leaves changing color. For hundreds of thousands of devotees, the day Starbucks puts its pumpkin spice lattes back on the menu each year—around Labor Day—is the official start of fall. The “PSL,” as it’s been nicknamed by legions of fans, is one of the best examples of the boon a limited-time offer can provide a business, especially bakeries and QSRs offering baked goods. 120,000 PSL-lovers follow the beverage’s Twitter account. While the process for developing an LTO may be daunting, the potential profits can make the effort well worth it: Forbes estimated that Starbucks made roughly $100 million in revenue last year from PSL sales alone.

Here’s how to turn an LTO into long-term success.

Set Limits

The secret to most successful LTOs is in perceived scarcity, which builds excitement and creates a sense of urgency that boosts sales. Perhaps that’s why LTOs accounted for 74 percent of menu activity at major chains, according to a 2013 Datassential report for the International Foodservice Manufacturers Association. But before you launch an LTO a day, the same study showed that offering too many leaves customers jaded, viewing the onslaught of pop-up menu items as a marketing ploy.

Trend with the Season

Start seasonally and then fine-tune category trends. “We find limited-time offers work best when they’re relevant to the particular season, and also take into account current flavor and dessert trends,” says Benjamin Stanley, innovation R&D manager for Baskin-Robbins, part of Dunkin Brands Group. For example, Baskin-Robbins’ Flavor of the Month program highlights seasonal notes. “Giving our guests something new to try on a regular basis—a new ice cream flavor to try every month—is a very important part of this limited-time offer strategy,” he says. Local ingredients, upscale comfort items and authentic ethnic options elevate seasonal trends.

Tap Into Emotion

Go further and connect your seasonal LTO to a positive emotion or memory. CEO of the fast-casual dessert concept Coolhaus, Natasha Case, says, “Our bigger impact LTOs are those that elicit an emotional connection to a season. This summer, we really focused on getaways: Is there a dessert you could take a bite of and instantly be transported to a tropical destination?” That’s how Case came up with the “Dessert Island” collection, which features seasonal stunners like the pineapple whoopie cookie.

Build On Buzz 

Unless you hit a PSL-style jackpot, it will take more sales than an LTO can serve up to keep customers coming back year-round. Once an LTO brings customers into the store, give people a reason to stay. One no-brainer is to give out samples of your next special. Starbucks, for example, serves up tiny samples of winter specialty drinks to customers lured by the fall favorite.

“We find limited-time offers very helpful in generating news and excitement for the Baskin-Robbins brand,” Stanley says. During an LTO rush, and at all times, Baskin-Robbins invites customers to try every flavor—LTO or evergreen. “Our guests love having the opportunity to try something new when they visit us, even if in the end they go for one of their favorite flavors, like pralines ’n cream or jamoca almond fudge,” Stanley says. And isn’t that an ideal match? Customers with a favorite they can’t pass up, and business getting a boost from LTOs.