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What's it worth to dress like me? About $8 million if you're Chick-fil-A

August 10, 2016 by Eli Portnoy — CEO, Sense360

Chick-fil-A conducted its annual Cow Appreciation Day about a month ago, on July 12. If you're not familiar with this event, it's an annual rite at the chain where customers dress like cows to receive free entrees. Data collected by Sense360 indicates how exceptionally savvy this seemingly silly promotion ends up being for the chicken-based chain. In fact, data analysis for the day shows that the event generates more than $8 million in foot traffic.  

Aside from Sundays, when the chain is closed, most any other day of the week, Chick­-fil-­A averages almost 3 percent of all QSR visits in the U.S., ranking eighth in Sense360's competitive benchmark. The chart here plots Chick­-fil-A visitors in June and July as a percentage of all QSR visits for every day of the week (aside from July 12) and shows that most Tuesdays are fairly normal traffic-wise for the chain. 

However, when we look at individual July days, Tuesday, July 12 stands out with significantly higer traffic, totally about 4.1 percent of all quick-service traffic that day. In other words, on that single day Chick­-fil-A took an extra 1.1 percent of the entire QSR category business. That’s a lift equivalent to the combined foot traffic for the day of In-N-Out, White Castle and Church's Chicken, as you can see in this graph. 

So, clearly people were excited about a free Chick­-fil-A entree and, as a result, visited at a more frequent rate. But extra foot traffic is only a part of the story, so let’s explore if this promotion truly served Chick­-fil-A well.

New or existing customers?

It’s much harder to acquire a new customer than it is to retain an existing one. For this very reason a campaign that can draw a new crowd is highly valuable. 

Sense360 analyzed Chick-fil-A customers from July 1 through July 11 and noted that nearly half — 49.3 percent — were new customers who had been to Chick­-fil-A in the past 30 days, though another half — 50.7 percent — had not. 
  
On July 12, the data indicates that the number of new customers fell to 48 percent, meaning the promotion drew a heavier crowd of existing customers than we would typically expect, as the next two graphs show. 

Distance driven?

Another critical element of a campaign is determining whether the customers it attracts are likely to become paying and repeat consumers. That's why it's important to explore whether customers coming for a free entree actually traveled a normal distance or if the free dish pulled in customers from far and wide, many who may be unlikely to make the trip again. 

To get a good idea about this element of the traffic attracted, we first examined all the July trips to Chick­-fil-A along with the distance driven. Then we compared that data to the data for the trips made to Chick­-fil-A on July 12, Cow Appreciation Day. The data indicates that the promotion barely had any impact on the distance driven to the restaurant, as seen in this graph. 

Is this lift sustainable?
Perhaps the biggest question for the chain now is whether the July 12 spike in traffic was simply a one-time bonus or served as a boost that drove a sustained increase in traffic. The good news for Chick­-fil-A is that an increase in traffic did sustain itself throughout July. Specifically, Chick­-fil-A was averaging 2.85 percent of all QSR visits daily, from July 1 through July 11. Then the data shows that their share of the market increased to 3.16 percent for the days after the promotion of July 13 through July 31 -- a lift of approximately 0.3 percent increase in market share. 

And the big question: How much is the lift worth?

Cow Appreciation Day was clearly a successful undertaking for the chain. But how successful, you may ask? Research indicates that U.S. consumers spend $273 billion dollars annually in QSRs. If you simply divide that number by the 365 days many chains are open, you would see that the total QSR market is worth roughly $750 million a day. 

A 1.1 percent increase in foot traffic means Chick­-fil-A siphoned off roughly $8 million in foot traffic from the industry on that one day. More importantly, a decent ratio of these customers were new visitors to the chain from within the trade area who also kept coming back. That adds up to approximately $2 million a day in additional sales. 

About Eli Portnoy

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