Sponsored by Cardlytics
Your marketing team succeeds in attracting customers, but often those once-new guests don’t return as frequently as you would like. Getting a return on the money spent to draw them in means repeat visits, but even for America’s top 200 chains, those can be few and far between.
“If I’m a restaurateur, I need to look at every guest knowing there’s a strong chance (70 to 80 percent) that none of them will return for another year,” says Matt Drewes, senior vice president for restaurant partnerships at Cardlytics.
Why the switch? Drewes says research points to two reasons:
- Lack of continued brand awareness. Once a customer leaves the premise, the restaurant becomes “out of sight, out of mind.”
- Diners’ love of variety and the abundance of restaurant options nationwide.
Non-top 200 restaurants (in orange) are experiencing stronger growth in 2018, whereas top restaurants (in blue) are seeing flatter growth—likely due to diners’ increasing love of variety and abundance of restaurant options.
By combining years of consumer debit and credit card transaction data with findings from Nation’s Restaurant News’ annual Top 200 chains reports, Cardlytics found that foodservice companies of all sizes are struggling to reduce “churn” — the process of winning new customers but failing to retain them. And while the data revealed the battle between industry competitors is fierce, they discovered some strategies for success.
“Our data shows that if you can get your visitors to return sooner, there’s a greater chance that they will continue to visit more frequently throughout the year,” Drewes says. “The good news is that there are proven ways to generate these return visits.”
Marketing at the speed of 'social'
As advertising options continue to evolve, the marketing playing field between industry Goliaths and independent Davids has nearly leveled. Drewes says that for decades, large chains enjoyed the advantage of using traditional print and TV outlets to tell their stories — something smaller operations could not afford. Today, however, advances in targeted cable advertising, social media and web-centric user-review platforms have nearly democratized media engagement, allowing independents to market just as directly and immediately as large chains.
Drewes predicts that this semi-parity won’t last forever. The country’s top chains have larger capital reserves to invest in customer relationship management tools (CRM).
CRM tools gather rich data on customer purchasing habits and their preferred means of engagement — social media, text messages, emails, etc. Armed with this information, CRM users can micro-target relevant messages to diners and woo them back to the table effectively and quickly. With data harvested from a large number of outlets, chains also can leverage and refine their messaging on a massive scale.
“As an example, chains like Olive Garden and Chili’s use table-top customer-order devices, which enable them to capture first-party data,” Drewes says. “These ‘Ziosks’ allow restaurants to obtain all customer transaction data, including the amount they spent and details on everything they bought, allowing them to better target future promotions and deals for faster repeat business.”
Cardlytics is uniquely positioned to complement CRM programs by delivering personalized offers to infrequent, lapsed, or new guests through its bank rewards program. The result, Drewes says, is increased repeat business.
Since CRM technology is currently cost prohibitive for smaller chains and independent restaurants, to stay competitive, Drewes says they’ll need to focus even more on mastering the basics: truly memorable food and service.
“The restaurant industry is highly competitive on multiple levels,” he says. “Great food and service will always be part of how restaurants stay top of mind.”
Tips to burn the churn
- Invest in Customer Relationship Management (CRM) tools to gather rich data on consumer spending habits. The better consumer preferences are understood, the better targeted your marketing will be.
- Keep your brand “top of mind” using multiple marketing channels to share news about new menu items, LTOs and events, and drive faster repeat visits through Cardlytics’ advertising platform that reaches real consumers when they’re using their banks’ digital channels.
- Enhance server training to personalize each guest’s experience.
- Boost traffic by rewarding loyalty with discounts or free appetizers, desserts, etc., on return visits.
- No matter your restaurant company’s size, keep marketing nimble and adjustable to new trends and technology.
