IN today’s extremely competitive business landscape, speed of service for hybrid businesses (mix of goods and services) is truly imperative. I call these businesses ‘hybrids’ since for example, a restaurant serves food (the tangible aspect) and makes sure of a good dining experience for customers through speedy table service and good ambience (the intangible aspect).
Speedy service is a business promise nowadays, more especially among restaurants and other food businesses and this constitute to one of their competitive advantages that adds value to their offerings. The “if it’s late, it’s free” approach embodies this promise of quick service delivery. This for me is a high-risk, high reward tactic of businesses since it not just about delivering products on time but delivering TRUST to their patrons.
I can still recall that this strategy was used by Pizza Hut decades ago when TV programswere proliferated with its adverts guaranteeing that if the customer does not receive the delivery on time, they can have their pizza for free. This bold move of Pizza Hut set a bar higher for faster delivery of foods.
Currently, there are other companies reviving this tactic setting them apart from other industry players (but in a noticeable revised format). McDonalds, for one, has an ongoing promo named “2 Minute Drive Thru Challenge” wherein drive thru customers can get a free coffee if their order takes longer than two minutes to serve.
“Late equals free” promotional model is a tool for trust building flipping the script: instead of customers wondering whether they are wasting time or money, they are guaranteed that businesses are willing to compensate for their miss.
There’s also such thing as ‘gamification’ in the world of business which is applicable to this tactic. This gimmick of giving free products in case of failed promises gives customer a ‘sense of thrill’ in a way. This could be one of the consumer behaviours that this tactic is banking into. That is, there are consumers who would be curious to know the outcome of the transaction: will it be late, or will they get the item they ordered for free? Or they might also wonder “will they be true to their promise of giving away a free product if the delivery man comes late?”
This gimmick, or shall we say marketing campaign, has been very effective at least to pizza parlors like Pizza Hut (and even Shakeys and Greenwich copied this tactic few years back). Pizaa Hut, perhaps, banked on its capacity to fulfil the promise through various strategies that they have studied before the implementation of this gimmick. Pizza Hut won’t be bringing this back for a couple of times already if they weren’t successful.
But some of us may be wondering if this tactic can still be applied at this current time that the traffic congestion problems are everywhere.
As a marketing professional and college professor, these are my few cents about ‘time-guarantee’ marketing. Before adopting time-based promotional strategies like “If it’s late, it’s free,” businesses should be taking in consideration important things to ensure the success of this very risky promotional undertaking.
Thorough market research should be done to assess whether such a gimmick aligns not just with customer expectations and preferences, but also with the operational capacity of the business. The competitive dynamics should also be a factor. Businesses should ask themselves: “Is there really a need to implement this gimmick in conderation of my competitive environment?”
Businesses shall also take note that while these promotions can boost brand equity and sales, it comes with significant risks particularly in logistics-heavy environments like food delivery. In high-traffic areas such as Metro Manila, pressuring riders to meet strict delivery times can compromise their safety, leading to accidents or burnout. Therefore, companies should not only ensure they have the infrastructure to fulfil such promises but must also prioritize the well-being of their delivery personnel to avoid ethical and reputational pitfalls.| – Balikas.net
