Restaurant chains strive to drive loyalty and retention in the hopes of turning one-time customers into repeat guests. This is something restaurants know they need to do — it’s how to do it that poses a problem. Based on hundreds of conversations with restaurant brands, there are a few common challenges we’ve heard repeatedly. These are the roadblocks preventing chains from providing the type of experience that their guests long for and is required in order to stand out from competitors. In this blog post, we’re taking a closer look at those challenges and some ‘how-tos’ to reactivate the last guest.
Many restaurants we speak with want to be measuring certain key customer metrics in order to set benchmarks, but they struggle to quantify goals. They’ll resort to certain things like “We just need to be smarter and more intelligent about our marketing,” or “We just need to be more real-time.” They’re themes but they’re not measurable goals. We might ask “What percentage of your transactions are known identified users?” And rarely do they know. That’s a place to start.
Old-School View of Loyalty
Restaurants still think of loyalty in the very old sense, which is about customers showing loyalty to a business — “Buy nine burgers and get the 10th burger free.” That transactional approach is ok, but next-gen loyalty goes well beyond. In addition to a base loyalty program that is published and known, brands should offer targeted promotions to their customers with points and/or offers as incentives. For example, target double points if you buy from category X this week. Where category X is an area they’ve never bought from. To do this, you need to know what each customer is buying, and then target people with these promotions.
A similar targeted promo could be done for dayparting to get customers to buy during times of the day that they don’t normally buy. These strategies drive measurable incremental spend, instead of just giving discounts for things they are already buying.
Almost all of the restaurants we speak to report the same issues–their data is siloed and slow. Their data is all over the place. They can’t do anything with it or it’s very hard for them to do anything with it. You have to have a real-time view of the customer that’s holistic, that has all of the data. You can’t work in channels. A holistic real-time view empowers intelligent engagement strategies.
Incentivize Non-Purchase Behaviors
It can be a very new concept for restaurants to think about rewarding behaviors that aren’t directly about the sale, but if you can think more intelligently about identifying behaviors that are going to lead to sales later on (like engaging with a certain piece of content, for example) you stand to expand and maximize your customer-base. Find those behaviors, know which customers are doing them or not doing them and then incentivize them. Don’t just give the incentive to everybody. If customers are going to do it on their own then great, and if they haven’t done it let’s give them incentive to do it. We could find non-purchase behaviors that are very indicative of future purchases. That’s a different way for many restaurants to think about the standard loyalty approach of “Here’s the published points program, and hopefully, you buy something, and we’ll give you a reward.” We can quantify value with a more targeted, personalized approach using data science.
Time is of the essence for the restaurant industry. In order to drive a recent guest back into the store, it’s crucial to get them rewarded for their transaction right away. If you’re getting rewards later, even a few days later, the customer is not going to respond to the reward in the intended way. We’ve got to see that come through very quickly because if it’s not instant then we can’t necessarily associate it to the behavior. There’s not that connection of “Oh, I’m going to get my stuff for completing this action.”
Thanks to Starbucks’ BINGO game and other challenge-based promotions, a lot of brands have become interested in how they can incorporate gamification into their customer engagement strategy (because what company doesn’t want to be more like Starbucks?). For example: if you buy two more of this item over the next week you’re going to get this thing free and all of a sudden they’re automatically in a game.
Make Life Easier
A big thing that customers want is for the companies that they interact with to make their lives easier. They don’t want a lot of hooha, waiting and checking this and doing that. Customers are more likely to come back to a restaurant that provides an experience that makes it easy for them to get their food and get out. For example: offering an app that simplifies the ordering and check out process by enabling customers to reorder their last or favorite order and pay through the app. Just making the app experience easy for a customer to do business with the company is important because then as the customer is thinking about where she’s going to go eat the company that makes it really easy and has some good rewards (and the customer likes it anyway) gains an edge.
In order to engage and reward guests in the smart, timely way required to keep them coming back again and again, restaurants need to let go of some of their long-held perceptions about loyalty and customer engagement. Technology has made it possible (and inexcusable) for brands to be anything other than fast and quick.