The restaurants depend on certain fuels to drive their operation. Few of the common examples are customers, stock, and cash- each of these enables the restaurant to succeed. Meanwhile, data is more than worthy of its status as a source of power for all kinds of objectives.
We are talking about the kinds of insights that can provide the lowdown on popular menu items, customer experience, behavior, and much more. Example, data about someone’s buying history is useful when targeting them product or service they’ll be interested in. We also have data on customer presences, like the items they usually order, the time and day that people choose to visit a restaurant, and how they prefer to pay for them.
When used effectively, this data can offer insights for, improving their satisfaction, driving more customers, successful product development, and future-proofing the business.
For restaurant marketers, data-driven marketing is the key to growth.
As technology evolves, customer preferences and behavior are changing. A study by Epsilon found that 80% of customers want personalized experiences from brands, which also include restaurants. And for the restaurants that focus mostly on traditional marketing or the restaurants that don’t leverage much digital marketing, offering personalized experiences is a significant opportunity to meet the expectations of customers.
Sending just one broad message to a mass audience via mediums like TV is no longer a viable option; to create loyalty and brand awareness, the restaurants must focus on delivering relevant experiences that are specifically tailored to needs and preferences of individual customers. And the capability to do this depends mostly on data.
There’s not even a single doubt that as a restaurant marketer, you now have more access to data. And with the enhanced data analysis features that marketers have integrated into their programs, we’re now seeing a new trend: A marketing shift from leveraging demographics to more advanced psychographics.
Meanwhile, while demographic data is still a critical component, the psychographic aspect fuels the emotional aspect of marketing for restaurants, enabling 1: You connections (1: You is a holistic
customer experience strategy that’s personalized with the best choice for individuals across all points on interactions). And your restaurant expects these types of personalized communications and more.
Effective use of data has several advantages that range from getting new customers to delighting them to the point where they swear by your product/service. With a sophisticated MarTech stack in position, the restaurants are now collecting an unprecedented volume of data. And the restaurants have been very successful in tapping into this data to get new customers and also retain them, improve overall customer experience, and drive customer engagement and loyalty.
Let’s look at five ways the restaurants are leveraging data-driven marketing for success;
Define Customer Segments
Segmentation, targeting, and positioning- the holy trinity of marketing- lay the foundation for the success of any marketing activity.
There are plenty of tools/avenues, along with the Restaurant Point of Sale (POS) software, as a mobile app or website, in restaurant marketers’ MarTech stacks that collect plenty of data about their customers. It offers restaurant marketers access to the demographic, personal, and behavioral data of their customers.
The restaurant marketers can easily develop customer segments targeting different audiences by using this data. Example, restaurant marketers can define segments for Millennials, GenX, or Gen Z customers. Similarly, they can also develop segments depending on the average order value of their customers or the frequency of the customer visit.
Meanwhile, defining your customer segments based on different criteria can help you ideate more creative marketing campaigns.
Boost Customer Retention and Loyalty
Successful restaurant thrives on repeat customers. And data-driven restaurants draw insights from their customers’ buying data to devise their customer retention program.
TO create customer loyalty, you need to build a rapport with your customers. It can be easily done via several means, like introducing loyalty programs or as giving special offers on their birthdays or anniversaries.
Loyalty programs reward your regular and long-term customers. Through these loyalty programs, you can either offer coupons or discounts that can be easily claimed in the future to ensure that your regular and long-term customers keep coming back.
And for non-returning customers, you can use the same reward program to convert them into returning customers. You can offer special discounts to entice them on the items they have ordered in the past.
Personalize Customer Experience
The heart of delivering seamless customer experiences is personalization. And since the restaurant industry is service driven and so personalization has to be a priority.
Today, customers are present across several devices throughout the entire day, and they regularly receive SMS, emails, social media updates, and app notification. And to stand out from this clutter, you can send your customers customized 1:1 message at the right time.
This is where data comes into play. Using purchase and behavior data, restaurant marketers can send their customers a customized offer. On the other hand, they can also build a personalized experience depending on the food their customers usually order or any food allergies mentioned in their profiles.
Meanwhile, along with loyalty programs, you can use personalization to be in touch with your customers throughout their customer journey.
Use Data to Analyze Different Scenarios
With so much data collected by the restaurant, that can be easily used to analyze different problem areas and find solutions. Example, you can find hours, weeks, or months that drive the least traffic to your restaurant’s website.
Based on the finding, you can easily introduce exciting offers to increase the footfall during those periods. Similarly, you can also find out the least ordered items and remove them to optimize your restaurant’s menu.
Now, let’s look at some positive aspects. Restaurant marketers can find the most popular food items from the menu and introduce combos or tweak the prices to drive up the sales of multiple food items. You can also identify your top performing staff and reward them for up-selling or cross sr up-selling and also to boost your company morale.
Use Predictive Analytics
Predictive analytics is an Artificial Intelligence (AI) use-case that analyzes historical data, Machine Learning (ML), modeling, and statistics to make future predictions.
Restaurant marketers leverage predictive analytics to create a future forecast of their customer behavior, customer’s response to changes, and their spending patterns. Predictive analytics can also be leveraged for predictions about seasonal changes and trends, their impact on sales and inventory and then to plan accordingly.
In order to be successful, restaurant marketers must change their approach from broad marketing to “1: You” marketing that uses data more effectively and then drives more incremental sales.
Here are a few data-driven marketing techniques that will allow you to do so:
If you are gathering data about on your customers about their purchase history, you can clearly see how some of the products are more popular than the others. And with the products that are less popular, you may need to build a strategy to offer them an extra push.
Marketing special offers for the products that need promotion will soon reveal if they can effectively reach the required level of performance or if they need to be removed entirely.
Meanwhile, there’s also a case for marketing products that you know will deliver the highest profit margin. Although applicable to the restaurants, this strategy is commonly applied by the online retailers that are interested to sell more to the people that have already purchased their product or service in the past. So by highlighting the complementary products or service that will drive increased revenue, any company can improve their opportunity to earn more.
Catering for VIP customers
You may have already heard about customer lifetime value (CLV), if not, it is a metric that enables you to see how much a specific customer is worth to your business depending on their average spends or their frequency of visits.
Once you have this data, you can easily develop plans to strengthen and nurture the relationship even further. Example, when a customer visits your restaurant enough times or spends a certain amount of money, you can then offer them special rewards to make them feel valued.
Some restaurants generate as high as 70% of their entire revenue from just their VIP customers. And if you want to be successful in the long term, you need to keep them happy.
Restaurants marketers, off the back of CLV, also help to re-engage with customers that maybe don’t spend as much with your restaurant. And if you have data on your customers that haven’t visited your restaurant in a while or aren’t buying much with your restaurant, a simple “We miss you” sent via email, SMS, or push notification could turn things around.
Apart from pinpointing the customers that are in need of some attention, data can also be used to identify the days and times when your business flagging.
This is a very good example of data flows in a restaurant business and the ways in which it helps greatly to turn things around. In this example, data on slow periods can be gathered by the Electronic Point of Sale (EPOS), identifying where the restaurant business could be doing more.
And the customers submitting this information can be directly sent to an email database or a loyalty program, from where they can be effectively targeted with the special offers for specific times of specific day(s). The restaurants having a chain of outlets or establishments can even look into sales by their customer’s geographic location and incentivize them to go to one of their specific restaurant outlet or establishment located at a certain location, where they wouldn’t usually go.
In these cases, you can clearly see how data has a direct impact on your revenue and your customer visits to your restaurant.
Do you know that 59% of customers believe that personalized marketing can have a significant impact on what and where they buy?
Once you have the details about each of your customers like demographics, preferences, and history, you can then begin to create audience segments that enable the personalized method of communicating with them on different channels. In turn, it creates loyalty around your brand and keeps the customer returning again and again.
Example, let’s assume that a group of your customers comes to your restaurant and always order meat-free foods from the menu. You have a new vegetarian meal option, or want to give discounts on similar meal option, you’ll know exactly whom to target.
For many years, marketers were able to customize their communications by adding a name to any messages they send, but times are changing. The customers are now demanding than ever that is why personalization should be implemented to the content of messages and to the offers the carry.
Finding and repeating the formula for success
If you already keep an eye on your finances, you will be able to clearly see well you performed in a certain week or month.
Success happens around the business all the time and should be repeated whenever possible and is appropriate to do so. Reporting and analytics can help you to easily identify where your marketing effort & investment paid off and offer insights as to where you may want to repeat in the future.
It’s critical to think about attention to detail when examining your data for trends. It may be just that you did a promotion on Christmas giving a discount to people dining with their families. This could have been an even stronger period for generating revenue- the one which you would love to repeat- but how much of that was because of an increase in family visits?
So, if you are ready to dedicate some of your money and time into your marketing, ensure that you are measuring the direct impact of each campaign on the business.
Embrace CRM data to reach the right customers
Having a complete understanding of which data to focus on capturing the most critical and useful data is essential. From a recent research study that was conducted on Nation’s Restaurant News and Informa Engage, just 9% of the restaurants said they work with external partners to match their CRM data with their online IDs. Integrating all data sources to completely get to know restaurants is absolutely necessary.
Prioritize existing customers before focusing on acquiring new customers
Are you familiar with 80/20 rule? Just about 20% of customers results in 80% of sales. As a marketer, you need to completely understand the wants and needs of 20% of those customers to sustain their loyalty. According to research, 53% of the restaurants said that new customer acquisition is a top priority for them. So, as a restaurant marketer, you should consider focusing more on your existing customer base, and on the customers that are members of your loyalty program.
Tailor experiences, advertising, and promotions to prospective customers and regular diners
Creative 1:1 content and messaging is very critical in successfully achieving 1: You communications. And there’s no need reinvent the wheel for each communication. Try creating a library of content to be prepared to provide unique content to each of your customers. So, having “filed image” or multiple options to choose from in the library enables you to react to behavioral situations in real-time.
Analyze purchase data to identify trends and optimize your future marketing campaigns
Leveraging analytics to better understand the purchasing behavior is very important for marketers in order to further improve their program outcomes. The purchase data can be further analyzed to predict the desired future outcomes including how regularly visitors can be motivated to visit your restaurant and which of the food items should be promoted.
Starbucks does a great job with their data-driven marketing strategy. Their data scientists know which coffee their customer drinks, where you buy it, as well as at what time of the day. And they also leverage predictive analytics to personalize the experience of their customers.
As a result, Starbucks now offers recommendations to their customers that are coming to their stores by leveraging the location data to know when their customers are coming to their stores. And they also segment their customers by leveraging machine learning and data and then setting up rules based on decision trees mapping their purchase behavior.
So, during the data-driven marketing journey, always be authentic and let the actual meaning of your brand shine more. So, incorporate your brand promise across all of your marketing activities, and create a human connection with customers.
From the above, we can see that data is helping restaurants perform better across a range different function of their business.
However, you shouldn’t collect data just for the sake of it. Whether it’s used to re-engage customers that don’t visit often, drive footfall around slow periods or strengthen relationships with those that do, data can improve a business in an ever-growing number of ways.
Now, the restaurants have become a hot spot for data that floods into their systems daily. And by integrating a customer engagement platform with your EPOS, it’s much easier than ever to know exactly what customers are buying as well as the reasons behind their every decision.