Warning signals indicating tough headwinds for restaurants appear in the headlines daily. From a new spate of bankruptcies and store closings, to analysts warning of a full-fledged restaurant recession, tougher times for restaurants appear likely. Of course running a tighter ship is part of the solution, but ultimately downturns tend to shake out the businesses whose total experience is not as compelling. This makes knowing your customer — and why they choose you over all the other choices — even more critical during tough times. It is no longer an optional item in your business plan – it is the factor that can carry your business successfully through a recession.
1) Focus on Operational Excellence
Good food, good service, good atmosphere, location and engaged employees are the primary drivers to recession-proofing restaurants. These maxims may seem too obvious to mention, but in lean times, the focus cannot stray from excellence. If too much focus is spent on economizing, your customer will feel the pinch. In lean times, consumers want even more value for their dollar and value isn’t only measured by price. If guests feel that they are getting a lower level of quality in terms of food, service or ambiance, loyalty and traffic will wane. This is why cost-management initiatives during downturns often fail, especially for chains where percentage margin targets are deemed more important than customer experience.
2) Know your Customer
Throw out the buzzwords (loyalty, big data, CRM) and cut to the core of what all these new technologies can do for restaurants – all can help you know your guest more completely. Start by taking the data you already have and enrich it with additional information that will make it actionable, often instantly. Simply connecting actual purchase detail from the register back to the profile of the customer offers incredibly powerful information. It is getting easier and more cost-effective to do with the right partner and reaps enormous rewards. Once you have this, you can not only answer the old questions of who, where, when, what and why, but you can also drill down to answer new questions – in what channel, at what time, in what mood?
3) Map out your Guest Journey
Years ago, the goal for restaurants was guest satisfaction. That is no longer enough. Casual dining brands have seen their “point of differentiation” become a “price of entry” thereby losing their competitive advantage. Brands need to connect with guests at an emotional level, not just through steps of service. Brands like Chick-fil-A and Shake Shack understand this. Mapping out the emotional outcomes and weaving the behaviors to achieve this into a training program solves this issue.
4) Use It or Lose It
Customers who opt-in to programs that give you access to their data expect you to use it to make the messaging and the experience better for them. Contextually relevant, targeted marketing campaigns delivered through their channel of choice will make marketing feel less like spam and more like help – thus a relationship is formed. By making it easy for customers to make a dining decision when and where they want to and in a channel they prefer, you will enhance the perception of your brand and drive customers in the door. Businesses that intelligently target guests will have deeper, stronger reach, and consumers watching their own bottom line will tune-in to brands that respect and value guests– targeted messages that seem created “just for” an individual go a long way to making that symbiosis complete.
5) Close the Loop
Through a number of technologies, including Fishbowl’s Promotions Manager feature, it is finally possible to close the loop on every offer in circulation. Restaurants have the power to know not only how many offers were redeemed, but also who redeemed them. They can identify where customers come from and how they change their behavior with different offers. These data-based insights have changed the game. In times of financial stress, this “x-ray vision” is especially valuable – businesses can see which promotions are of greatest value. Marketers can leverage not only opens, conversion and ROI but other behavioral elements to make overall campaign or targeting adjustments to strengthen the guest relationship.
Knowing who your customers are and what motivates them to act is good business – and can mean the difference between make or break in a tough economy. The technology and analytical methods are here – how well are you using them?