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How to recession-proof your restaurant with relationship marketing
February 27, 2023
By Kevin Sanders, industry solutions director at Marigold
Just as the restaurant industry begins to recover from the Covid-19 pandemic, another storm is about to hit it head on: a looming recession. While (hopefully) not as challenging as the forced closings that the pandemic caused, recessions have their own challenges in the form of higher labor costs, food costs and fewer diners.
But in this case, there’s at least a warning, giving restaurant owners time to prepare and get their houses in order. In this article, we’ll examine the main building blocks needed to construct a strategy that can weather the strongest of storms.
The foundation of any business, and restaurants in particular, is customers. So the very first thing one does when building a house is lay that foundation. For restaurants, that means committing to a single source of truth and unifying all data about your guests.
The more details you can collect about your guests, the stronger the foundation. That means your data platform needs to be able to hold far more than just a guest’s first name and birthday.
Restaurants have many touchpoints with their customers – both on-premise and off. Each represents distinct data signals that can help you understand who that customer is and what they want. This includes customer data like demographic info, location, preferences, etc. as well as transactional data like point of sale data and mobile/web ordering.
It also includes social media interactions, email, and more. That’s a lot of sources to consolidate, often across multiple platforms. But doing so is essential to develop a complete picture of your diners.
The first wall — loyalty
Upon the foundation laid with data are the walls, the first being a next-generation loyalty program. Loyalty programs are critical for restaurants because they’re the entry point into the digital ecosystem you’ve built.
But the key phrase here is next-generation. The old school “earn-and-burn” programs that rely on discounts are no longer enough to make a dent. For instance, 51% of diners have downloaded and used a restaurant app. That app opens the door to digital ordering, communication, and more. It’s the gateway to a digital relationship.
Modern loyalty programs allow restaurants to build a complete, accurate profile of guests. Considering about 40% of restaurant records contain inaccurate data, this is a critical step to creating strong, long-lasting relationships. The information needed for a complete guest profile includes:
- Identifying information
- The channels through which they interact
- Dining transactions
- Most recent interaction
- Which offers the guest reacted to positively
Collecting this information is how you can develop a truly two-way relationship with your customer, both as you collect it (offering instant rewards in exchange for information) and long-term.
The second wall — cross-channel messaging
Today, brands need to meet customers wherever they live. That requires the ability to communicate across channels and not get siloed into a single point of contact.
At first, that means having the ability to communicate through all channels to ensure you are talking to customers in whatever their preferred channel is. But as we know, customers can change channels at any time. So we need to be ready to deliver messages in the ways that customers would like to receive them.
Sometimes that will require delivering messaging in a cross-channel way, seamlessly and cohesively across all those touch points. That ensures consumers are getting a consistent cohesive message. This is important because consumers have shifted the way they engage with brands in general, so restaurants in particular need to shift the way that they're communicating with their guests and their customers as well.
The roof — personalization
Once you have your unified data platform, and the ability to deliver highly personalized offers through a variety of channels, now you can unite those walls under the common roof of personalization.
And by personalization, we mean behavior-changing personalization. That means doing far more than just including a guest’s first name in an email. That’s kind of expected table stakes these days. So you need to increase the amount of personalization to get people to think differently about your brand and then potentially change the way that they engage with and react to your brand.
Consider for instance that 73% of diners say they want recommendations based on their past dining experiences. The goal of personalization is to communicate to the customer that you know enough about them because you care about them, and that you want them to be successful in achieving their goals… even if that goal is a quick and delicious meal experience.
The more you know about somebody, the better it allows you to communicate how much you are interested in them. And that level of personalization is what you need to aim for because it builds trust, which in turn strengthens that and deepens your relationship.
Once you have enough information to deliver uniquely relevant offers and opportunities based on individual actions and preferences, you’ve achieved your goal. Many restaurants do a great job of that within their establishments, such as super-serving their recognized “regulars.” The challenge is now to replicate that in a digital environment.
Enjoying your new house
Built right, a house like this will stand the test of time… standing firm against any future storms both big and small. A future-proof structure is the ultimate lesson in resilience.
For deeper insights, download the ebook Restaurant Revolution: Serving Up Better Customer Engagement from Cheetah Digital by Marigold.