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Digital marketing is a behemoth topic and challenge for the restaurant industry.

Digital marketing is the number one item on operators’ tech stack wish lists

More than one-third of operators are unsatisfied with their digital marketing tech stack and 39% are unhappy with their loyalty program

While the foodservice tech arms race continues to heat up, particularly around buzzy topics like automation and generative AI, digital marketing remains an area of opportunity for tech vendors, as there is a substantial gap between martech needs and what’s currently available. According to the recently released 2024 Restaurant Technology Outlook market leader report from Nation’s Restaurant News Intelligence, digital marketing is the number one investment operators want to make in technology for the year ahead, with 46% of all operators planning to leverage digital marketing tools in 2024 and beyond.

Despite this clear need, digital marketing is one of the least satisfactory areas of operators’ tech stacks. According to the market leader report, 37% of operators are not satisfied with the digital marketing components of their tech stack and 39% are dissatisfied with their loyalty programs. Comparatively, only one-fifth of operators are dissatisfied with their POS systems and kitchen display systems.

“I’ve found that people get really frustrated that there's no tech tool that does it all, because you want to be able to track and pull in all this data, and having one central place for that makes the most sense,” Christine Lorusso, senior director of digital marketing for Firebirds Wood Fired Grill, said. “A lot of these tech companies are trying to do it all, like a reservations company adding a loyalty piece and an email marketing program…I have found when you work with a tech company that tries to go outside their box, they tend to put that initial product to the side, causing frustrations.”

Lorusso’s experience could shed some light on why tech integrations are also one of the most challenging tech stack components, with 38% of operators reporting dissatisfaction with tech integrations and APIs. For Lorusso, integrations are a crucial area of tech stack success for the Firebirds brand. For example, For example, the company pulls in customer data from OpenTable and Olo in partnership with Firebirds’ POS system.” Currently, she said, they are working on a product where Firebirds will be able to pull in gift card data using that same integration between the company’s POS and reservations system.

“I think we just need to really continue to push our partners to be good partners back to us, and if they can create relationships with other tech companies in the industry that are good at their one thing, they could create products that nobody ever wants to leave,” Lorusso said. “We have to stop trying to do 10 things poorly when we could be doing one thing really well.”

Out of all of the digital marketing-related components out there, guest relationship management is actually the one that consumers are least satisfied with. According to the NRN market leader report, 43% of operators are at least somewhat unsatisfied with their customer data platform, and just under half of all operators surveyed are unsatisfied with their customer relationship management (CRM) platforms. This shows that operators think they are not optimizing customer-facing data as well as they could. Without these components, digital marketing is like shouting into the void, with no way to measure or optimize successful digital marketing strategies.

“It doesn’t surprise me that CRM/CDM are considered the least satisfactory components of the tech stack,” Lorusso said. “A CRM is a necessity to any successful digital marketing program and with so many data silos available to us, it is critical that you find one that can support the goals of your brand….A CRM is only as useful as you make it, and you will only be satisfied with the tool if you put in the work to build it out to fit the needs of your brand. For us, that means pulling in data from all of our key partners including POS, OpenTable, OLO, etc. and compiling comprehensive profiles on our guests so that we can create a customized experience for them across our digital platforms, as well as in the restaurant.”

Ideally, marketing officers and technology officers at restaurant companies will work together to pull in different data and information from multiple elements of the tech stack to create a comprehensive picture of what’s working and what’s not through guest profiles and patterns of customer habits. This requires seamless integration across a company’s tech stack, which is another bump in the road for many operators.

Slice House, a growing California-based pizza chain, is rolling out a brand-new martech stack this August that focuses on cross-platform seamless integration, including a refreshed brand identity, a new website in partnership with Brink, digital marketing with Paytronix, and customer review management platform with SOCi. Since the company was basically creating a martech stack from scratch, it was easier to work with tech vendors that matched Slice House’s digital marketing needs, rather than work backward to retrofit martech capabilities.

“We had all of these individual elements that were manual and non-integrated, so the idea is to create a ‘best of class’ tech stack for our franchisees,” Trevor Hewitt, founder and vice president of franchise development with Slice House, said. “API's and integrations have come a long way over the past few years, so selecting partners that integrate with each other was high value to us. Most of the best-of-breed providers seem to be playing well with each other in the sandbox, which makes it a lot easier to work with them.”

Making sure that each of these digital marketing components “play well together in the sandbox” was a crucial part of creating the Slice House martech stack and ensuring synchronized communications with guests, whether that’s through text, email, or app notifications on the brand’s new app, Slice House CMO Renae Scott said.

“I think [building a martech stack] is about reaching more of an omnichannel approach and reaching guests wherever they are,” Scott said. “So, even though the death of email marketing was predicted five years ago, it’s still a strong tool we have in our toolbox….Texting is another component – there a specific subset of consumers that is open to text marketing, and others who, as you get older, do not want text marketing communication.”

As restaurant operators struggle with various components of digital marketing like integration and vendor relationships, one thing they don’t have to worry about is a lack of options. Warwick McLaren, vice president of digital technology for Craveworthy Brands, said that not only do restaurant operators have the option of working with “old stalwarts” of the industry, but there are plenty of newer players in the digital marketing space that use tools like AI and automation to push out consumer surveys, app push notifications, and social media posts. This could be both a blessing and a curse:

“I don't think there's a lack of vendors who are trying to compete in this space...I think it's a case of these new players trying to gain some credibility with known entities [in the industry,]” McLaren said. “So, the risk of trying them is a little less for brands to potentially switch away from vendors that they may not be happy with… [You might be thinking], 'I'm with said vendor and I might be looking for something else, but I feel like I can't switch.' The issue is there may not be some options out there that are more established."

McLaren added that at Craveworthy, they are currently trying to be more "flexible and open" to the idea of newer tech vendors like Hang, which is a new vendor in the loyalty space. This is crucial, he said, because operator resistance to trying to out new tools—whether in digital marketing or elsewhere—has been a crutch of the restaurant industry for quite some time.

“I think that's been a challenge with the restaurant industry is that we lag horrifically behind retail and some of these other sectors when it comes to tech,” McLaren said. “I think we're trying to do the best we can to create new and fun experiences for our guests, so we're exploring interesting new tech options and ways that we can do that.”

Contact Joanna at [email protected]m

TAGS: Technology
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