3 ways to use data and analytics to drive smart restaurant profits
Smart restaurants are here. As franchise locations introduce new digital technology, they will have more ability to collect, analyze, and use data. With these insights, quick-service restaurants (QSRs) will be able to hone in on their competitive edge and increase the number of repeat customers they receive, which in turn can lead to higher revenue, stronger profits, and sustained growth.
By empowering your franchisees to collect and use data within their own restaurants, and by creating a centralized location for all data to be analyzed from the corporate level, you’ll be able to position your brand for success not just now, but in the future as well. Here are three ways you can use data to drive growth in your franchise locations.
Know Your Customers
More and more businesses are beginning to turn to data from smart restaurants to get the answers to their most pressing questions. It is estimated that 18 percent of small business and 57 percent of medium-sized businesses across industries are already using data analysis and business intelligence solutions in their day-to-day operations. This is a trend that is especially relevant to the restaurant industry as more brands are implementing digital technologies and solutions in the restaurants themselves, from self-serve kiosks to mobile ordering.
One large fast-food brand has shown how QSRs can use data to better get to know their customer. The company meticulously tracks a number of variables, such as in-store traffic, customer interactions, drive-thru customers, ordering patterns as well as POS data, among other variables. They can then use this information to make improvements to their restaurant designs and make menu updates that optimize the restaurant experience for customers. Through these data-driven insights, the company is able to tailor their experience and food to suit the preferences of each local market, giving franchisees an edge over the competition.
Create Personalized Customer Experiences
More and more restaurants today are beginning to realize that the secret to creating a true competitive advantage lies in the ability to provide customers with a unique and engaging experience that will keep them coming back, time and time again.
In fact, one survey found that 68 percent of consumers believe that companies and brands need to find better ways of offering customized experiences to help increase their satisfaction. This demonstrates just how important it is to provide customers with a personalized experience that is tailored to their unique and individual needs. And how can you do that? Using data of course!
Data provides you with the ability to gain a deep insight into a customer’s behavior as well as their preferences. As you begin to collect so much customer and purchase data through a smart restaurant system, it is easier to get to know what your customers like and dislike.
There are so many pieces of information that customers leave at various points in their journey, such as on point-of-sale (POS) systems, mobile apps, and even on social media. If this data is aggregated under a single location it can be combined and leveraged to draw relevant insights. Seemingly disconnected information, such as names, food and drink preferences, loyalty programs, and purchase history, can all be pulled together and analyzed to better understand the customer.
This helps restaurants identify who is frequenting their stores, as well as how to best market to them and how to offer personalized experiences that drive loyalty. Customers can get personalized promotions or offers that they can’t get anywhere else, giving them a reason to come to your locations over a competitor. Relevant and timely offers can be much more effective than generic coupons or widely targeted advertising.
This is most powerful when it comes to mobile ordering. Customers are increasingly demanding the ability to place their food orders online, with 58 percent of Internet users saying they find the idea of online food ordering appealing, and 35 percent of millennials reporting that they have placed an online order from a restaurant within the past year. This creates a golden opportunity for restaurants as they are able to use these systems, not only to collect additional data on their customers but also to improve operational efficiencies and boost marketing ROI.
Build Stronger Loyalty Programs
Speaking of loyalty, loyalty programs are data goldmines for restaurants if they are done right. Long gone are the days of punch cards or stickers that provide nothing more than a free item after a certain number of purchases. Today’s loyalty programs are digital, personalized, and designed to drive customer behavior and add real value to keep them choosing one brand over another.
Digital applications provide an opportunity to gather large amounts of customer data, while also providing a direct line to customers so that you can send those personalized offers and promotions more easily. These have been shown to drive loyalty across industries, with 58 percent of enterprises seeing a significant increase in customer retention and loyalty by implementing data analytics into their decisions.
One iconic coffee brand has led the way when it comes to designing a loyalty program that customers not only use but love. Their rewards program has helped increase revenue to $2.65 billion in the quarter it was introduced while also growing the average spend per visit. When customers check their digital app on their phone, they are shown limited-time bonus offers that the company creates to reward loyal customers with more stars. Through these tactics, the company is able to keep customers engaged with fresh offers that are suited to their tastes based on their data, each time they check their app.
The Bottom Line
Data is everywhere, and with the right analysis capabilities, it can provide a complete and holistic view of all the details of your restaurants, both from a franchise perspective and from an overall corporate one. By embracing smart restaurants and taking advantage of the digital technologies that you have and will be implementing, you’ll be able to get to know your customers, provide them with a more personalized experience, and offer them valuable loyalty rewards that keep them coming back for more.