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chipotle-rewards-1200x600.png Photo courtesy of Chipotle
Chipotle iterated its Rewards program in 2019 to share more personalized messaging . The brand has since evolved its strategy, leveraging AI to better target its members.

Personalized marketing evolves into a necessity for restaurant brands

Sixty-two percent of consumers say a brand will lose their loyalty if they deliver an experience that is not personalized.

Personalized marketing has quickly evolved into a necessity for restaurant companies, and all companies really, as consumers increasingly demand relevant messaging in an otherwise noisy environment. 

This strategy has reached a bit of a fever pitch during the past year or so; in 2023, one in three marketers spent at least half of their marketing budgets on personalization, while 62% of consumers now say a brand will lose their loyalty if they deliver an experience that is not personalized – up by nearly 20% from 2021, according to Brittany Oat, CEO and founder of bSocial Strategy. Oat spoke about the criticality and evolution of personalized marketing during the National Restaurant Association Show last week in Chicago.

“Have you recently been scrolling your phone and stopped because you saw an ad that was exactly what you’re thinking? That’s not a coincidence,” she said. “Your competitors are (customizing messages). If you’re not, you’re missing out on a huge opportunity.”

To get a sense of just how important personalized marketing has become, consider the biggest chains are putting more eggs into that basket.

“As more customers make purchase decisions based on personalized recommendations, driving frequency means using our digital capabilities, like loyalty, to know when to serve our customers better than anyone else,” McDonald’s CEO Chris Kempczinski said during his company’s earnings call. “When we shift marketing investment from traditional mass media like television, print and billboard ads, to collective investment in modern and digital capabilities to personalize the experience, we drive profitability.”

Chipotle CEO Brian Niccol also said his company is getting better at personalizing messages and offers. 

"It feels like more personalization, more relevance. Therefore you keep the engagement up, and then obviously, when we keep the engagement up, we see the higher spend and the more frequency," he said during his company's most recent earnings call. 

To achieve such personalization, Oat said it’s important to leverage customer data, like income levels, demographics and interests, from email lists, app memberships, and leads. Finding such data is easier than ever with tools like AI and social media listening, she adds. That said, we are still on the ground floor of understanding the positive impacts of personalized marketing. Oak said just 35% of companies feel like they’re successfully achieving omnichannel personalization.

“It’s not just for social media, but also targeted email, product recommendations that are AI powered, one-on-one experiences, personalized mobile customer experiences, personalized rewards,” she said. “There are so many tools out there that can do this for you.”

If it feels like we’ve had this conversation before, it’s because we have. Restaurant brands have been sharpening their focus on personalization for over a decade now, including through a pre-pandemic wave of loyalty program launches. Oak said the difference now is there is more data and companies are investing more in AI to effectively mine that data.

“Before we all had our faces buried in a phone, we needed to give people a personalized experience, learning about their life, remembering what they eat, drink,” Oat said. “All of a sudden, we had all this technology and we forgot how to do that. But with the power of AI and social listening tools, we can give people personalized experiences again and it’s a big difference in a volatile environment. Now, it’s really easy to track the customer journey. We have everything we need to make this successful.”

PLNT Burger collaboration

Oat’s agency recently worked with 13-unit PLNT Burger to create more personalized digital campaigns with the objective of generating new traffic. The company examined patterns from social media posts about the brand and noticed a lot of parents were posting during times when their kids were home from school for a specific holiday or summer break.

“We found a lot of parents were purchasing when they’re stressed. This is where we can target and amp up kid’s meals,” Oat said. Ads then dropped during a busy time of day for impulse buying – 3 to 7 p.m. – on a Friday during a school holiday, for instance. “Parents, in the moment when they’re stressed, if you hit them, then they’ll buy it.”

Still, as our industry evolves on personalized marketing, it’s important for companies to avoid crossing the line from customized to creepy. The best way to do this is to have data protection regulations in place and prioritize user consent. It’s also important to train your staff on the importance of customer data and develop a clear data privacy policy.

“Be transparent with communication with customers. If you tell people why you’re doing it, they’re going to be ok with it,” Oat said.

Once you have those privacy parameters in place, it’s time to ideate and execute. Start by defining your personalization strategy, Oat said – what stage of the customer journey do you want to focus on? Acquisition? Conversion? Retention? Then, pick three audiences per quarter to focus on. What audiences drive the most sales, or are you looking to grow? What audiences are you missing?

PLNT Burger, for example, wanted both new customers and omnivore customers, so the company launched a successful campaign focused on New York City residents who like Oatly products; those with an affinity to alternative milk tend to be omnivores who are also perhaps more open to eating at a plant-based burger concept, Oat said. During the campaign, PLNT Burger tracked site behavior and captured data from conversations and engagements with conversational AI chatbots. Co-founder and director of marketing Jonah Goldman said this personalized campaign expanded PLNT Burger’s community and generated trial and repeat traffic.

“With personalized marketing, we can get people in the first time and then pull them back and entice them with experiences and the right messaging,” he said.

Contact Alicia Kelso at [email protected]

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