The power of consumer knowledge
Understanding your customers is a prerequisite to satisfying their wants and needs to increase customer satisfaction in restaurants. Typically we do not know who our customers are; their name, their email, etc. The lack of knowledge keeps us in the dark when constructing menus and promotions, and hinders our ability to measure whether we are satisfying our restaurant customers.
Consumer profiling based on purchase behavior is a technique you can use to see patterns to determine the various types of customers you have, and how you might better service them.
For this post, we are going to simplify the issue by addressing two types of restaurant companies;
- those who do not know the names of their customers, and
- those who do know their customer's names.
For the vast majority of sales in the restaurant industry, the former condition exists. However, there is a growing number of transactions that carry with them identification information about the customer.
No customer information
Most restaurant companies do not know who their customers are, where they live, or their email address. Loyalty systems are good at collecting customer identifying information, and if you use a loyalty program, skip to the next section.
For the rest of you, there is a wealth of information you can generate about your customers from your check details. Mirus clients use the details on each check along with exception based reporting to learn lots of things about their customers, such as:
- What percentage of customers are discounters?
- When do my discounters visit the most, breakfast, lunch or dinner?
- How many customers who order off the value menu also buy a non-discounted item?
- What are my non-beverage buying customers ordering for entrees/sandwiches?
- How is the market basket of goods different between the customers who buy into the latest promotion versus those who are not buying into the promotion?
Using well-constructed questions can provide you with a clear picture of the various types of customers you have, and how they are different region by region, and restaurant by restaurant. Of course, you need the right tool for asking the well-constructed questions. This tool should allow you to examine guest check details by any combination of filters you need to answer your questions. We call this ad-hoc analysis, meaning it is not a static analysis repeated over and over, instead it is performed on-the-fly, one question at a time.
Using ad-hoc analysis to answer your questions, you can then build profiles for different customer segments, and measure the trends of these segments over time. You might end up with profiles, such as:
- Discounters
- Value only
- Big ticket
- Full price
This will give you a much deeper understanding of how your various customer segments react to advertising, LTO's and price changes.
You do have customer information
If you are one of the lucky companies who currently have detailed customer information for a large percentage of your sales, you have the ability to create more detailed profiles of your customers. In addition to creating the types of profiles outlined above, you have a unique potential to compute detailed metrics for known customers, such as:
- frequency of visit
- lifetime average spend
- top menu items
- discounting %
- annualized revenue
- promotion participation
The key is tying the customer information to each guest check they generate. Many loyalty programs achieve this by embedding the customer's loyalty number into the check. Combining all of the checks for an individual customer provides the data needed to compute the metrics above.
If you are considering a loyalty program of any type (points, stored value, etc.) you should make sure your POS captures the unique customer number from the loyalty system. Without that linkage, your customer information will have limited potential for driving marketing performance.
Summary
The world of restaurants is changing quickly. There are lots of ways to get identifying information about your customers, from loyalty programs to mobile apps, to ordering apps, and more. Find a way to identify your customers, and you will set the stage for dramatic changes in how you market to them, and how you build restaurant sales.
Thoughts?
How do you currently collect customer information?
What specific customer detail would help your business the most?
Looking to get more insight out of your data? Download our "3 Basics to Harnessing Restaurant Big Data" PDF.
About Mirus:
Mirus Restaurant Solutions is a multi-unit restaurant reporting software used by operations, finance, IT, and marketing.
For more information, please visit www.mirus.com
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