Businesses face many challenges today that impact traffic and same store sales. This includes pricing pressures, an aggressive competitive environment, a long- term decline in retail and slipping mall traffic, and an emerging generation of customers with different behavior than before. Amongst all of the challenges, businesses must have a deeper understanding of customers, their behaviors, demographics and attributes.
Marketing today must focus on current customers– who they are, how often they visit, and what they buy. In this environment, personalization is more important than ever. Businesses need to connect with their customers in a personal and relevant manner.
With the proliferation of data and online access, customers expect businesses to know them and everyone is fighting for their attention. Data is allowing many businesses to simplify, enhance and personalize the customer experience. Today, mobile apps track customers’ past and favorite orders for quick reorder and mobile pay makes it easy to get in and out of the store fast. POS systems show guest transaction history.
Websites make the right recommendations to customers. Some businesses are doing this well. However, many are not.
Our point of view is that businesses need to know their customers, show them that they know them and show them that they care. In an environment where customer loyalty can be fleeting, communicating relevant and personal information increases your bond with customers. Customer experience personalization is all about data first. Get the data right and you can shape the overall customer experience by applying data science and machine learning. Brands that personalize customer experiences by integrating advanced digital technologies and proprietary data are seeing revenues increase by 6 to 10 percent, which is 2 to 3 times faster than those that do not.
The following is our 4 step process to personalization for restaurant businesses that need to get on the journey of personalization.
1. Know Your Customers
Personalization starts with knowing who your customers are and what they deliver to your business. Integrate all your disparate customer data into a single place for analytics and action. Most businesses have many sources of customer data and it is often scattered throughout their organization; Certainly, point of sale transnational data that records all guest sales is highly valuable. In industries such as e-commerce and travel, the customer is identified. In restaurants and retail, this raw data is not connected to the customer. Other data sources such as online order information and guest e-club data and loyalty can be linked to transactions providing a starting point for knowing your customers.
Find Anonymous Customers
For businesses, there are external processes that can link a significant percentage of guests’ purchase data with point of sale data. This allows the companyto put a name and contact information to what would otherwise be unidentified purchase transactions. In many cases, this process can more than double the marketable customer base for a business.
Add intelligence to get 360 degree view of your customers
Start with a central repository of all guests data. Then append third party data to individual guests to get a view of not only their purchase behaviors but picture of who they are in life. Data appending allows businesses to fill in the gaps in customer data and add customer demographics (such as gender, age, income), lifestyle and interests (life driver segments, interests) and buying behaviors and attitudes (such as price sensitivity, technical aptitude).
Analyze and Summarize
With an organized and clean guest database, a business can now analyze and model guest data and determine the following:
- Identify most valuable guests and what makes them valuable to the business Primarily using guest behavioral data, analytics can define and quantify who is driving the business top line and bottom line and their distinguishable behaviors. In many cases, 10% of your customers provide 40% of your revenue.
- Identify marketable segments
2. Identify Your Opportunities and Strategy
Following the customer analysis and summary of guest and business insights, identify the business opportunities. These may include:
- Retain and grow best guest segments
- Drive frequency from middle value segments
- Grow bar business
- Grow lunch business
- Acquire new guests that look like your most profitable guests in low penetration locations
Determine Your Strategy & Tactics
After you’ve defined some core opportunities, you can now determine your strategies and tactics to communicate with targeted guests. Determine relevant content and offers to guest segments and individuals based upon behaviors or demographics. Calculate the profitability of specific offers to understand the economic implications.
Drive Engagement with Relevant Offers
Knowing past behaviors and guest preferences, provide guests with meaningful and timely communications. For example, knowing your customers only shop at certain times of year and then offering products around that theme.
Integrate Your Plans
Integrate your customer communications with your overall plans to drive more business from customers in a manner that is relevant to them. Build out your calendar knowing your relevant holidays and high traffic periods. Leverage your vendors and to delight the customer.
This is where the art and science of marketing meet.
3. Dynamic Execution
CRM Tools enable easy and automated execution of your strategy. A Customer Management Platform (CMP) gives businesses easy access to query and select current customers by all their data dimensions: location, defined segment, product purchases, frequency, value and demographics. Marketing campaign lists can then be selected from the CMP for automated or ad hoc campaigns.
Set up Campaigns to Test List, Offers, Creative and Communication Channels.
Select customers and test various offers, creative and communications cadence. Dynamically personalize creative and deliver messages through channels that are most relevant to each guest. For example, an afternoon guest can receive a relevant email and mobile app messaging communication mid afternoon on a weekday versus a low tech guest receiving a direct mail postcard with a new special. Personalize your website experience based upon guest profile and behaviors. Reach guests in the channels where they are including mobile and social. In all cases, a clear message and a single call to action drives response.
Just to note, we are finding that direct mail is not a dead channel as some proclaim. While millennials are digital natives, 92% of them are influenced to make a purchase decision by direct mail as opposed to 78% of email.* Per the DMA 2015 report, direct mail response outperforms all other channels by 600%. Integrate online and offline communications. The goal is to engage customers to drive business and get a positive return on your marketing investment. Strategically invest more in high potential guests with an integrated campaign to drive greater business. DM costs are high but in the end it’s all about your ROI. You may spend more to get more.
Automate & Personalize Trigger Campaigns
Set up automated communications based upon lifestage or behaviors to drive customer engagement. These may include lapsed customer communications, daypart drivers, e-Club welcome communications, birthday offer, purchase thank you note and more. Add intelligence to these communications and personalize. Set them up once and automate this execution. Test and refresh campaigns as results are measurable.
Adhoc Marketing Opportunities
Launching new items will interest select customers. Market changes and promotions to targeted customers to drive repeat traffic with relevant communications. Respond to competitive actions or poor store performance with direct customer marketing to targeted guests in specific geographic areas.
Leverage your guest data and CRM tools to strategically invest in your guests with the right tools and dynamic execution.
4. Measure and Learn Continuously
While many marketing campaigns can be arranged as “set it and forget it”, it is important to continuously measure the impact of your marketing. For email, results are more than open and click through rates, but should look at customer offer redemption and purchases. As your CMP is updated regularly with your customer purchase data, track your customer coupon redemption and purchases by campaign. Effectively closes the loop on your marketing with purchase results to determine your most effective marketing campaigns and ROI.
Continual testing provides learning. For example, as a company is launched its campaign, they divided the campaign into three distinct groups based upon past behaviors. The targeted emails had 2x open rates and 5x purchase rates! Getting relevant with customers drives results.
The proof is in the results. Personalization gets the guest’s attention and drives engagement and sales.
Now is the time to drive more business through personalization. Know your customers, show them that you know them, and show them at you care. See what we can do for you.