In the third and final installment of our Guide to Restaurant Guest Acquisition, we cover retention’s role in your acquisition strategy and offer tips for leveraging data to build a healthy guest base.
Once you’ve found and attracted new guests, how do you build a healthy base with high lifetime value (LTV)? The answers are in your restaurant data.
As you start to analyze, consider these four important questions, which should serve as the basis for your guest retention strategy and inform future acquisition efforts.
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Four Questions To Ask When Analyzing Restaurant Data
1. Who have you acquired, when, and how?
2. How are your guests progressing through the guest lifecycle?
3. What characteristics do your guests share?
4. How can you influence behavior to mirror the actions of your most valuable guests?
To keep restaurant guests coming back, you first have to take the time to learn who they are, along with their preferences, motivations, and behaviors. Within your data, you can find out what initially drove guests to your business and why they keep coming back—or why they’ve stopped returning—by looking at things like location, visit frequency, average spend, the preferred method of ordering, time and day of visits, marketing engagement, feedback, acquisition campaign/channel, etc.
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Focusing Retention Efforts With Cohorts and Segments
Rather than attempt to boil the ocean regarding retention, some brands analyze their data by cohorts, or groups of guests acquired at the same time, to evaluate repeat purchasing, churn, spending, reliance on guest acquisition, and other trends over time. By doing so, they can uncover when exactly guests become brand-loyal and why, and create retention campaigns specifically designed to move them forward in the life cycle.
For example, you might discover once guests reach the four-visit mark, you’ve retained them for life. And so, the challenge then is figuring out how to move cohorts from one to two visits, two to three, and beyond.
Additionally (or alternatively), you can analyze your restaurant data by guest segments based on shared characteristics, such as guests with high LTV, website visitors, online orderers, on-premise guests, weekend warriors, Wi-Fi signups, catering orderers, and more.
To ensure each segment becomes more valuable to your restaurant brand over time, you should be thinking about ways to influence their behavior in a positive way. For example:
Giving weekend warriors a reason to also visit during the week, like Happy Hour or live music
Encouraging email subscribers to sign up for SMS messaging for insider perks
Incentivizing churn risks to return with an enticing offer
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Tips For Building a Healthy Guest Base
To build a healthy guest base with high LTV, start with these 6 winning restaurant guest retention strategies. The article is filled with frameworks you can use to increase guest engagement, encourage reorders, solicit feedback, and keep your restaurant top of mind across channels.
Ultimately, every restaurant brand is challenged with testing different retention strategies to find out what works for their guests. The best win-back campaign for your churn risks may be a free appetizer or a perfectly timed email with menu recommendations based on their order history.
By studying your data, you can identify cross-selling, bundling, or promotional opportunities you may not have previously considered, and use that intel to create irresistible campaigns to meet your goals.
Series Wrap-Up and Next Steps
As we close out this series, remember the best guest acquisition strategies are rooted in data generated by an integrated restaurant tech stack, utilize highly detailed segmentation, and take an omnichannel approach to find and attract the right people at the right time on their preferred platform. But guest acquisition doesn’t end with the first visit.
To build a healthy guest base, restaurants need to regularly leverage their data to identify trends, monitor progression through the guest lifecycle, and develop retention strategies that meet individual needs and preferences as they evolve over time. Furthermore, by unlocking LTV and studying the behavior of high-value guests, brands can positively influence behavior and strengthen engagement across their entire base.
Learn more about Engage, our suite of restaurant marketing tools, and contact us today to find out how Olo can support your retention efforts.
SMS marketing is no longer a nice-to-have for restaurants. Learn how to successfully leverage this marketing channel to engage guests with timely, personalized messages and, ultimately, drive revenue.
Effective restaurant marketing requires an omnichannel approach to engage guests. And SMS marketing automation—also known as text message marketing—has quickly proven itself to be a valuable tool in a marketer’s tool belt.
Why? On average, SMS open rates are as high as 98% and replies are received within 90 seconds.
Restaurant brands can use this marketing channel to target their most engaged guests on their mobile devices with timely, personalized messages that drive results. To help get you started, we’ve created a quick guide that covers the basics of SMS restaurant marketing, including why it works, rules to know, and ways to grow your audience.
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What is SMS Marketing?
SMS marketing stands for “Short Message Service” marketing, often referred to as text-message marketing. Prized by marketers for the immediate, direct connection with guests, the ability to customize and personalize messages, and the timeliness of outreach via SMS automation—it’s no surprise that SMS marketing is driving ROI in all industries.
Why SMS Marketing Matters for Restaurants
The restaurant industry, in particular, has an immediate need for timely, personalized guest communication as demand for off-premise dining and contactless service continues to grow. Restaurants are turning to technologies, like SMS marketing, to help them create a consistent, branded experience for both dine-in guests and online orderers.
The case for SMS marketing is clear, but a successful start depends on two crucial steps: Knowing the rules and driving opt-ins.
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Step 1: Know the Rules
SMS Marketing Regulations
Collecting guests’ phone numbers through marketing efforts doesn’t necessarily mean you have clearance to add those numbers to your SMS campaigns. The rules and regulations of SMS marketing are set by the Telephone Consumer Protection Act (TCPA) and the CTIA. It’s important to read, understand, and comply with published regulations.
Get Clear Consent To Opt-In From Guests
Texting guests without their permission is an invasion of privacy and is against the law. To receive SMS marketing messages, guests must explicitly opt-in via mobile or web.
Transactional Messages Are Off-Limits To Solicit Opt-Ins
It’s not permitted to solicit opt-ins to SMS marketing via transaction-based text messages, such as online order updates or reservation confirmations.
So where CAN you solicit opt-ins? Read on to Step #2.
Additionally, new opt-ins must receive a confirmation text after sign-up, including purpose, a reminder that message/data rates may apply, opt-out instructions, and how to access help instructions. (For restaurants running SMS automation through Olo, this message flow is already set up to ensure compliance with regulations.)
Keep Guests Up-to-Date
Access to information about your SMS campaigns should be accessible via your website, in the restaurant, and on any pages where you collect opt-in guest data.
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Step 2: Grow Your SMS Marketing Opt-in Audience
Whether SMS automation is the first outreach tool you’re testing or simply the latest in your comprehensive restaurant marketing strategy, these three quick plays will drive opt-ins for any restaurant brand.
Drive SMS Marketing Opt-ins Via Web Forms
Include SMS opt-in fields on all of your guest-facing forms (e.g. waitlist, reservation, website sign-ups, guest WiFi, etc.) to quickly grow your marketable database.
Encourage Guests to Opt-in Using Short Code
Offer your guests an incentive to sign-up to receive SMS messages from your brand simply by texting a keyword to a short code.
Promote on Social Media, Email, and Offline
Remind guests and social followers of the benefits of being kept up-to-date with your restaurant brand via SMS marketing across all channels.
Start Communicating Directly With Guests
SMS marketing has emerged as one of the best and most reliable ways for any brand to connect with its guests. Its use is on the rise, and with good reason: when done correctly, it works. The response rate of SMS marketing is 45%, whereas the email response rate hovers around 6% (Gartner).
In the second installment of our Guide to Restaurant Guest Acquisition, we cover how to attract new, high-value guests through data-driven digital marketing campaigns—with real-world examples.
Quick recap: In the first installment of our Guide to Restaurant Guest Acquisition, we explained why knowing your current guests is critical for finding and attracting new, high-value guests. Additionally, we covered the three key elements to unlocking those insights: first-party data, a restaurant-specific CRM, and an integrated tech stack.
Now comes the fun part: Acting on that intel.
Using guest data and segments, restaurant brands can execute a strategic marketing plan that targets new guests who behave similarly to and share interests with their regulars and VIPs.
Start acquiring new guests today with these proven strategies:
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1. Advertise on Social Media
Social media advertising is a powerful tool for finding and attracting new restaurant guests on platforms that they use daily. Because organic reach is largely on the decline, social ads ensure your content is seen by the right people at the right time.
Consider which is more likely and effective: Stumbling upon a billboard for a new restaurant in your area or seeing a sponsored post about the grand opening in your Facebook Feed.
In addition to marketing to existing guests on social media—this is critical for retention and should be part of your overall marketing strategy—some brands target by persona (e.g. demographics, location, interests, age, etc.). This strategy may work for certain brands, but Lookalike Audiences can get you closer to your target market on Facebook and Instagram for less money.
In general, the more refined the audience, the lower the customer acquisition cost (CAC) a.k.a. the amount you have to spend to gain a new guest. To calculate CAC, divide your total marketing expenses by the number of new guests acquired. You can determine if you have a good CAC by looking at your check average. If guests are spending more than it costs to get them in the door, your acquisition strategy is on point.
The key to success, as you may have guessed, is leveraging first-party restaurant data.
How to Find New Restaurant Guests With Lookalike Audiences
Facebook defines Lookalike Audience as “a way to reach new people who are likely to be interested in your business because they're similar to your best existing customers.”
In other words, you choose a source audience—it could be your social followers or a list you upload, such as your email database, website visitors, online orderers, etc.—and Facebook then uses the common qualities of the people in it to target similar people.
Note: You’ll get the most bang for your buck by segmenting your guests first—by lifetime value (LTV) and other attributes that are known indicators of a high-value guest—and creating Lookalike Audiences based on those segments.
By targeting Lookalike Audiences, you can reach potential guests who are likely to patronize your restaurant, and may or may not have heard of it before, with relevant messaging that motivates them to take immediate action (e.g. order online or follow to learn more).
Campaign Ideas for Targeting Restaurant Lookalike Audiences
Segment: Guests who visit more than 3x per month
Promote a new location by targeting people within a set geographic location who have behaviors and interests like your loyal fans in other markets.
Segment: Guests who have booked events or placed large catering orders
Showcase your catering offerings leading up to a big game to people who would likely do the same if they knew about your restaurant.
Segment: Most valuable guests (10+ visits, high check average)
Promote a menu item that high-LTV guests order and target people who behave similarly to and share interests with your MVPs.
Tips for Creating Social Media Ads for Restaurants
Today the average American is exposed to 6K-10K ads per day. To stand out, your ad needs to be relevant to your audience and feature eye-catching visuals, compelling copy in your brand voice, and a strong call to action (CTA). Otherwise, your ad will become white noise or turn guests away.
Examples of Effective Restaurant Social Media Ads
This El Pollo Loco ad is part of the brand’s #NoNakedChips campaign, a fun (and funny) way to present its new Double Loaded Nachos. It features an eye-catching photo, an appetizing description, a catchy hashtag, a memorable punchline, and, most importantly an Order Now button, so users can order directly from the ad.
This First Watch ad targets guests located near its new restaurant location to boost brand awareness and generate excitement for the grand opening. The ad also drives email sign-ups by encouraging people to become a "pre-opening VIP."
This Great American Cookies ad promotes new Pumpkin Spice Cookies. It creates a sense of urgency with a Shop Now button and succinctly explains that users can order online and have cookies delivered with free shipping.
With a data-driven social advertising campaign that leverages Lookalike Audiences, restaurants can lower their CAC and increase ROI.
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2. Launch a Google Ads Campaign
According to Google, there are over one billion restaurant searches every month, and “food near me” is one of the fastest-growing search terms. Needless to say, Google advertising represents a huge (largely untapped) opportunity for restaurants to get in front of new guests searching for places to eat.
These Google Ad types can maximize your restaurant’s exposure: Search (text ads at the top of Google search results), Display (image ads on websites), and Video (YouTube ads).
All Google Ads can feature general messaging or promote seasonal offerings, events, catering, and more. They can even run during certain times of the day, like 10 a.m.-1 p.m. for the lunchtime rush or 3 p.m.-7 p.m. on date night, based on your current guests’ behavior.
How Restaurants Can Use Google Search Ads
Rank above your competitors (e.g. Someone searches for your competitor and sees your ad above the link to their website)
Target people searching for restaurants in your area (e.g. 10-mile radius of the restaurant)
Bid on relevant keywords (e.g. “Italian restaurant Syracuse” or “Smoothie near me”) that potential guests are using in their search
Example of an Effective Google Search Ad
This Sprinkles Google Search Ad features a keyword-rich description that includes brand differentiators. Most importantly, users can easily order for pickup or nationwide delivery by clicking on the Google Ad extensions (webpage links) like “Order Today.”
How Restaurants Can Use Google Display Ads
Catch the attention of potential guests with a compelling, on-brand visual
Showcase your menu items and differentiators to users as they surf the web
Promote your offerings on websites that focus on specific, related topics or keywords (e.g. A chicken wings ad on a fantasy football website before game day).
Example of an Effective Google Display Ad
This P.F. Chang's display ad is eye-catching and direct. It invites guests to order lunch by clicking the ad and features an irresistible tagline and image.
How Restaurants Can Use Video Ads
Show off your menu and seasonal offerings to users who are searching for relevant keywords on YouTube or who are subscribed to certain channels (e.g. Eater, Food Insider, Bon Appétit, etc.)
Take guests behind the scenes of your restaurant (e.g. cooking tutorials, meet the team, tour the kitchen, see the farm where the food originates, etc.)
Viewers retain 95% of a message when they watch it in a video vs. 10% when they read it, so YouTube ads can ensure that your restaurant messaging is internalized
Examples of Effective Video Ads
This retro-style Lazy Dog Video Ad shines the spotlight on the restaurant’s new TV Dinners while evoking feelings of nostalgia. It’s short, sweet, informative, and leaves a lasting impression.
This Sonny’s BBQ Video Ad is fun and relatable and speaks to the desire to reconnect with friends and family during the pandemic. The ad shows off some menu offerings, while also appealing to our emotions.
Boost website traffic, phone calls, and foot traffic
Extend your restaurant’s reach far beyond what your brick-and-mortar location and online listings can
Generate brand awareness among locals and visitors
Re-engage guests who haven’t visited in a while
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3. Retarget Website and Social Media Visitors
If you’ve ever left a website without buying anything and then seen an ad for that company appear on your social feed or within your search results shortly thereafter, you’ve experienced retargeting.
With retargeting, brands can invite consumers back after they’ve visited their website or social page through hyper-relevant ads that follow the user as they browse the Internet. Given that these people have already expressed an interest in your brand, it’s easier and more cost-effective to advertise to them than to a non-retargeting audience.
How To Set Up Website Retargeting For Your Restaurant
To advertise to your website visitors with Google Ads, you’ll need to add a code snippet to your website: the global site tag and the optional event snippet. This will capture information about your visitors—pages viewed and actions taken—to create remarketing lists. For instructions, go here. Alternatively, you can enable remarketing with Google Analytics.
Once your website is tracking properly, it’s time to set up an audience source for your remarketing list in Google Ads. Your goals will determine who belongs on your remarketing lists. For example:
Visitors of a page (e.g. Viewed catering options)
Visitors of a page who did not visit another page (e.g. Viewed menu, but didn’t order)
Visitors of a page during specific dates (e.g. Father’s Day weekend)
Website visitors in the last 60 days
When you’re ready to launch your Google Ad, you’ll narrow your audience targeting to remarketing and select the appropriate list. For a breakdown of the setup process, check out this blog post.
Just imagine how powerful this kind of retargeting campaign would be if it were paired with a stellar automated email and SMS marketing strategy—now you’re thinking like a world-class restaurant marketer.
Facebook Retargeting For Restaurants
Facebook retargeting is another way to find people who have expressed interest in your restaurant—by visiting your website or engaging with your brand on social media—and make it easier for them to place an order.
To get started with Facebook retargeting, you’ll need to install a Facebook pixel—a small snippet of code—onto your website. This code lets Facebook track your guests and their actions on your site and social media. After you install the pixel, you can set up events to measure essential actions, like placing an online order.
Next, it’s time to create a Custom Audience on Facebook based on those actions, such as people who started an online order but didn’t checkout. Once your Custom Audience is built, you can create a campaign for your specific objective.
The Key To An Irresistible Restaurant Retargeting Campaign
Whether you use Google and/or Facebook, the key to driving conversions with retargeting is to create ads that are hyper-relevant to your audience and have a clear objective. If, for example, you’re retargeting people who visited your seasonal milkshake landing page last month, consider appealing to their sweet tooth.
There should be no guesswork involved when it comes to the CTA. Want someone to reorder or make a reservation? Make it abundantly clear and easy for them to follow through.
Examples of Effective Retargeting Ads
Showcase popular menu items to people who engaged with your Instagram posts or ads in the last 30 days.
Highlight a 5-star review in an ad that retargets your segment of guests who have passed their average frequency (a.k.a. Churn Risks).
Gently remind people who abandoned an online order with messaging like: “Ready to order? Complete your purchase.”
This Facebook retargeting ad from Panda Express promotes a family meal deal and gives guests the ability to Order Now from the ad. The copy and imagery are warm, inviting, and informative.
This is a Google Ad retargeting campaign for Athena Grill (a fictional restaurant created by Olo), which would retarget the restaurant’s website and social media visitors. It’s consistent in messaging, and branding, and has a clear CTA: Order Now.
Final Thoughts
No matter what strategy—or combination of strategies—you choose, remember that guest acquisition, just like restaurant marketing in general, is an iterative process. What works for your competitor may not work for your brand.
Expect to test different tactics and guest segments until you figure out what drives the most results. Keep an eye on impressions, clicks, cost, conversions, etc., and adjust accordingly.
Once you’ve found the sweet spot—the right platform, content that resonates, and high engagement—you’ll see your CAC drop. But don’t stop there. Keep your ads fresh so that they remain effective.
And, use your restaurant data as a guide. Top brands leverage guest data to reach consumers at just the right time, on their preferred channel, with relevant, personalized messaging based on their behavior.
Stay tuned for the final installment of our Guide to Restaurant Guest Acquisition, in which we’ll cover the importance of retention and outline ways to enhance the guest experience to drive long-term loyalty.
Learn more about our marketing suite and contact us today to find out how Olo can help you attract new, high-value guests via targeted digital marketing campaigns.
In the first installment of our three-part Guide to Restaurant Guest Acquisition, we explain why first-party data, a restaurant CRM, and an integrated tech stack are key to finding and attracting high-value guests.
One of the biggest priorities for restaurant marketers is driving a consistent stream of people in the door, to the counter, curbside, etc. In other words, guest acquisition: the process of bringing new guests to your business.
Traditionally, guest acquisition in the restaurant industry centered around mass communication (i.e. limited-time offers, newspaper and radio ads, and out-of-home advertising). But just as a restaurant manager would never shout to everyone in the dining room to find out if they’re enjoying their meal, mass communication tactics are impersonal and difficult to measure in terms of effectiveness.
There’s a better way to acquire new restaurant guests.
The first step: Knowing exactly who your current guests are—beyond demographics.
In this three-part blog series, we’ll walk you through the fundamentals of restaurant guest acquisition, so you can level up your marketing plan and, ultimately, drive revenue.
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Getting To Know Your Guests—Beyond Demographics
Chances are your restaurant brand already has some sort of guest acquisition strategy in place, but unless you fully understand your current base, you’re likely wasting marketing dollars on attracting low lifetime value (LTV) or even one-time-only guests (e.g. people only motivated by discounts) and the ability to optimize your approach is limited.
So, what does it mean to truly know your guests? We’re not just talking about surface-level demographics like age and location, or even contact information. Restaurants should have all of the following intel and more about each guest at their disposal:
Dates
Recency: Time of Last Visit, Last Check, Last Online Order
Visit Trends: Last Waitlist Time, Reservation Time, Wi-Fi Sign-Up
Engagement: Last Email or SMS Clicked or Opened
Details
Personal Info: Name, Email, Zip Code, Anniversary, Birthday
Frequency: Number of Visits, Time of First Visit, Lifetime Frequency
Average Spend: Check Averages, Tips, Online Order Totals
Order Data: Ordered Items, Online Order Source
Location
Restaurant Details: Preferred Location, Last Location Visited
But how do you get all of that information? The secret to unlocking these valuable insights is first-party data, a restaurant-specific CRM, and an integrated tech stack.
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What Is First-Party Data and Why Do Restaurants Need It?
First-party data is information that a company collects directly from its guests and owns. This includes all the ways a guest engages with a restaurant brand online, including orders, reservations/waitlist, comment forms, email sign-up, e-commerce, app usage, social media, surveys, and more.
Restaurant software like Olo takes that first-party data a step further by enriching it with sources such as your POS, pay-at-the-table solution, and payment platform, through tech integration.
More than ever, restaurants need first-party data to gain a clear understanding of their guests across the entire guest journey and more effectively tailor the experience to each individual. Remember: If you don’t know how your guests behave, you can’t influence their future behavior.
And yet, some tech vendors either don’t give restaurants ownership of their data or limit their ability to access and use it. The best way to find out who truly owns your data (and, ultimately, your guest relationship) is to dig in and ask the tough questions.
For example, when you pull a covers or online orders report, can you tell exactly how many originated from a source like Google or found your website directly? What about the number of guests who have visited/ordered once, twice, or don’t dine as often as they used to? And, if you can get access to all of your data, can you act on it?
If the answer to any of these types of questions is no, it’s time to reevaluate your restaurant tech stack.
Unlock Guest Insights with a Restaurant CRM
A restaurant CRM (Customer Relationship Management solution) like Olo’s stitches together data from your POS, reservation system, online ordering solution, and other restaurant-specific integrations into a single, unified guest profile—and makes it actionable.
This 360-degree view of each guest enables you to better understand their behavior and preferences, which, in turn, leads to more effective omnichannel communications, real-time personalization across guest touchpoints, hyper-relevant promotions, and revenue optimization.
Note that a standard, run-of-the-mill CRM may be limited in terms of its integration capabilities with your existing restaurant tech stack and what actions you can take to engage guests.
The Importance of an Integrated Restaurant Tech Stack
When it comes to getting to know your guests, the ability to collect and then access data is equally as important as having a restaurant tech stack built with systems that talk to one another. For example, do your POS, payment solution, Wi-Fi, CRM, reservation system (if you’re full-service), and online ordering solution share data? If not, you’re only getting part of the story of the guest journey.
To gain this comprehensive understanding of each guest, including their purchasing behavior, preferences, and long-term value to the business, you need to eliminate data silos.
So, before implementing any new systems, ensure that they integrate with your existing tech stack or take the necessary steps to do so.
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Restaurant Data Analysis and Guest Segmentation
With integrated first-party data and a restaurant CRM, brands can analyze the guest journey across platforms and find out where and when guests spend money, what they spend it on, which channels they use to connect with the brand, their opinion of the dining experience, and their lifetime frequency.
In addition, restaurants can use the process of guest segmentation to identify which guests are most valuable long-term. Guest segmentation is the act of categorizing guests based on shared characteristics or behaviors, so businesses can effectively market and cater to the needs of each group.
Restaurant brands might choose to segment guests based on things like:
Lifetime Value (LTV): Visited more than 10 times, ordered within the last month, and check average is over $50
High Probability for Reorder: Clicked an email on a Tuesday, and ordered tacos online after 3 p.m. two weeks ago
Opportunities to Treat VIPs: Number of visits is greater than 20, regularly orders dessert, and anniversary month is August
High Churn Risk: Last visit was over 90 days ago and number of visits is greater than 10
Now, how can we use all of this data and these segments to power a guest acquisition strategy?
Next Steps
In the second installment of our Guide to Restaurant Guest Acquisition, we’ll cover a variety of ways to turn guest insights and segments into a data-driven, omnichannel marketing plan that resonates with your target market. Stay tuned for proven strategies to help you find and attract new, high-value guests that mirror the interests and behaviors of your regulars and VIPs.
Learn more about our restaurant CRM and contact us today to find out how Olo can help you better understand your current base and attract new, high-value guests.
Leading restaurant brands are personalizing the guest experience to maximize lifetime value. Learn what LTV is, why it matters, and how restaurants can drive it.
Historically, restaurant leaders won by driving transactions—keeping tabs on cover counts and obsessing over same-store sales. Winning didn’t require that you knew who was dining with you, why, or how often. Some team members knew the guests, but that information didn’t get disseminated to all parts of the business. From a practical perspective, guest data often lives with specific team members, but isn’t brought into finance, marketing, culinary, labor, or real estate decisions.
There has been a fundamental shift in the restaurant industry brought on by changing consumer preferences for personalization (think individualized recommendations from Netflix, Amazon, DoorDash, and Instagram) and the pandemic driving tech adoption everywhere. Winning restaurant brands in every category are personalizing the guest experience to maximize lifetime value.
Before we dive into why and how, it’s important to have a basic understanding of guest lifetime value, also known as LTV.
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What is Guest Lifetime Value (LTV)?
Guest Lifetime Value is the estimated profit generated from each individual guest from the first visit through the last. In other words, it’s how valuable a guest is to your business, not just on a transaction basis, but with regard to their recency, frequency, and monetary spend across the entire relationship.
Note: “Lifetime” does not refer to the person’s actual lifespan. No “til death do us part” metrics here.
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Why LTV is Essential for Restaurants
Restaurant brands must now harness and act on guest data to remain competitive. In fact, restaurant industry analysts and investors are increasingly considering guest-level economics over same-store sales data.
Given the accelerated adoption of data-driven technology across the restaurant industry, it’s safe to say that any brand that doesn't prioritize LTV is now at risk.
Whether you recognized it or not, this shift did not happen overnight. E-commerce and entertainment giants like Amazon, Netflix, and Disney have been maximizing LTV for years with highly personalized user experiences—a process mirrored perhaps more obviously on social media and through digital advertising. As a result, we as consumers have come to expect things like email campaigns tailored to our unique interests, promotions triggered by our recent purchases, and recommendations based on our viewing history.
The restaurant industry is lagging behind on this front, largely because of legacy POS systems, consumer networks that “own” the guest data, and other fragmented point solutions. These blockers make it impossible to know the value of each individual guest because the data exists only in disconnected silos.
The future of the restaurant industry lies with those brands that are taking a page out of the retail playbook. Restaurants can learn from the likes of e-commerce by harnessing actionable guest data with a single integrated system and applying the LTV metric to operations, marketing, and business.
With LTV, restaurant brands can:
Fine-tune day-to-day operations through revealing insights, such as driving factors for guest loyalty and maximizing them
Analyze different guest segments based on individual behaviors
Quantify results of marketing dollars spent, staff training, menu optimization, real estate selection, and more
Discover exactly where and why guests spend money
Given that acquiring a new guest costs far more than retaining an existing one, increasing the value of your existing guests—with the support of comprehensive guest data—is a critical way to drive growth.
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How Restaurants Can Maximize Guest Lifetime Value
Leading brands have proven that restaurants can maximize guest lifetime value, increase frequency and retention, and, ultimately, boost revenue by focusing on individual guest behavior. In the end, the brands that know their guests best and do something with that intel will come out on top.
By harnessing data and analytics—from 100% of guests, not just loyalty or rewards club members—restaurants can tailor every action, communication, and business decision to the behaviors of their most valuable guests.
Imagine ...
Knowing exactly who’s behind every curbside order and if they’re also dine-in regulars
Sending targeted SMS messages at just the right moment that feel like they’re coming from a friend
Targeting lookalike audiences for the top 20% of your guests on paid search and social media (proven to drive down guest acquisition costs to under $1)
Alerting managers which table touches to prioritize during a busy shift
Having a regular’s favorite drink prepared upon arrival
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Moving from Transactional Thinking to Guest Thinking
At the end of the day, transactions still matter. After all, C-level executives continue to get grilled over things like same-store sales and box economics. But, those are output metrics. Input metrics that can be controlled and influenced by focusing on individual guest behavior—things like guest frequency, recency, and spending—drive transactions and therefore profitability.
Transitioning from transactional thinking to guest thinking changes the game for everyone on the team. C-level restaurant executives have to shift their focus from same-store sales to Customer Cohort Charts. Finance now concentrates on guest economics instead of box economics. Marketing starts looking at lifetime return on ad spend versus return on ad spend. The list goes on.
It may sound like a big undertaking, and it is. But budgets are tight, and the last thing you want to do is waste time and money attracting low-value guests. When you make every business decision with your most valuable guests in mind, you can ensure that every dollar spent will have a high ROI and drive profitability for your business long-term.
Ready to Make the Shift?
To effectively drive and leverage LTV, restaurant brands need to be able to access 100% of guest data from a single view and inject it into every part of the business—from operations to marketing. Only then, can they individualize each interaction and make data-driven business decisions that boost revenue, guest loyalty, and operational efficiency, all while bringing acquisition costs down.
The path forward for restaurants is building a profitable future with data and those who focus on guests (and their lifetime value) will win. So the question becomes: Does everything in your brand actually revolve around the guest?
Contact us to find out how Olo can help your brand unlock and maximize guest lifetime value.
Learn why restaurant marketing teams should continue to put their time, energy, and budget into email. Plus, get tips for building an email list, proven strategies, and industry benchmarks.
In the age of social media, why should restaurant marketing teams put their energy, time, and budget into email? Because every marketer’s north star is investing in the channels most likely to drive results.
Here are a few reasons that restaurant email marketing is so effective, followed by tips for successfully building and leveraging your email database to drive revenue, guest frequency, and retention.
Nearly half of smartphone users worldwide chose email as their preferred communication method from consumer brands.
3. Email Marketing Converts First-Time Guests to Regulars
Research shows that email is 40x more effective at bringing new guests back than Facebook or Twitter.
4. Email Motivates Guests to Spend More
The rate at which emails prompt purchases is estimated to be at least three times that of social media and the average order value is 17 percent higher.
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How to Build a Restaurant Email List
The importance of a restaurant email list cannot be overstated. For one, your brand owns it. You also have a direct line of communication with guests who have expressed interest in your restaurant and want you to market to them.
While there are a variety of ways to build a restaurant email list, here are a couple of valuable sources to start with:
Within your email campaign strategy, consider every stage of the guest lifecycle and every interaction as an opportunity to deepen your relationship with guests. Leverage these six retention strategies to ensure every guest becomes more valuable to your brand over time.
Marketing automation tools can help you do more with less by instantly sending relevant and personalized communications to guests when they meet predetermined criteria, such as placing their first delivery order or not visiting for 30 days.
Here's some campaign inspiration:
Examples of Strategic Email Campaigns
Convert First-Timers into Regulars
Send an automated welcome/thank you email within 24 hours of an online order being placed, featuring an incentive for a return visit or another online order within a given timeframe.
Encourage Return Visits
When an online order does not contain a particular menu item (seasonal special, high-margin item, new offering, etc.), promote that offering in an automated email that triggers a week after the initial order is completed.
Get Important Feedback
Show guests you care about their opinion by soliciting feedback on specific menu items or their overall ordering experience via an automated email sent within 24 hours of an order being completed.
Drive Engagement
When a guest signs up for in-restaurant WiFi or your e-club, send a welcome email within 24 hours. Then, seven days later, send a follow-up with links to your social media accounts and an invitation to share photos using your branded hashtag for a chance to be featured.
Email Benchmarks for the Restaurant Industry
When evaluating the effectiveness of your email campaigns, there are a few crucial metrics to keep an eye on. According to Campaign Monitor’s 2022 Email Marketing Benchmarks Report, here’s what good email engagement rates look like for the restaurant, food, and beverage industry:
Open Rate: 18.5%
Click-Through-Rate: 2%
Click-To-Open Rate: 10.5%
Unsubscribe Rate: 0.1%
If your emails are underperforming, test and learn. Ask yourself:
Are people mistaking your email for spam?
Is your design mobile-friendly?
Are you emailing guests too often?
Is the messaging personalized and relevant?
Just because one email performs well with a particular guest segment, doesn’t mean it’s going to be just as successful with another. Regularly monitor your analytics and pivot accordingly.
Key Takeaways
When building a lasting relationship with guests, email is a key tool in the restaurant marketing tool belt. Why?
It converts: Targeted email outreach puts restaurant brand messaging directly in front of the guest—prime positioning for them to take action. Opted-in guests trust brands with their data, a key indicator of future sales—57% of consumers say trust in a brand drives their purchase decisions.
It’s personalized: With a restaurant CRM that segments guests by behavior, email marketing can be tailored to individual preferences, driving up engagement and boosting conversion.
It’s always on time: With restaurant marketing automation, email campaigns can be triggered right after the first visit or online order to drive repeat sales. Plus, if guests haven’t visited or ordered in a while, an email can automatically remind them of their favorite menu items.
It’s the foundation of effective omnichannel restaurant marketing: Restaurant brands can boost guest acquisition and retention by providing parallel experiences across email and social media. You can use your restaurant email list to retarget regulars and acquire new, high-value guests by targeting lookalikes on social media platforms.
Guests engage with brands everywhere they have a digital presence, and the next new social platform always generates marketing buzz. In comparison, email marketing might seem old school.
To get ahead, though—especially when marketers are tasked with doing more with less—brands need to focus on the kinds of communication guests are asking for and responding to.
In every step of the journey, guests continue to show that restaurant email marketing is an important part of their experience.
This week, during the fifth anniversary of Beyond4, Olo’s annual customer conference, our Founder and CEO Noah Glass gave attendees a glimpse at the restaurant of the future—and how we plan to bring that vision to life.
In the video, embedded below, you’re invited to imagine an elevated dining experience wherein every guest touchpoint is enhanced by technology.
Come along as we explore the limitless possibilities for data-driven personalization, optimization, convenience, and overall hospitality across different service models, from drive-thru to delivery, full-service, and beyond.
Whether you’re a one-person department or simply have limited resources, you can maximize your time and budget with these proven restaurant marketing strategies for driving guest retention and acquisition.
Lofty goals, a tight budget, and a small team. Restaurant marketers are all too familiar with this juggling act. But how do you drive retention and acquisition at a time when guest preferences, the supply chain, and the labor market are also in flux?
By staying hyper-focused on your brand-specific goals, embracing automation, and leveraging what you know about your existing restaurant guests, you can maximize both your time and budget.
Start with these proven strategies for restaurant marketing success:
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1. Focus On One Realistic Goal
We’ve said it before and we’ll say it again: Don’t try to do it all. Be realistic about what you can achieve—especially if you’re a one-person marketing team.
Instead of wasting time and precious advertising dollars guessing who your guests are, what they like, how they’ll behave, and what channels they prefer, let your data be your guide. That way, you can concentrate on building strategic marketing campaigns with the highest ROI potential.
2. Automate Your Restaurant Marketing Campaigns
Work smarter, not harder. With marketing automation powered by your restaurant CRM, you can set up relevant, enticing, and personalized guest communications, including email, SMS, and push notifications, that are automatically triggered by events or segment criteria.
Here are just a few ways to leverage marketing automation to drive sales, maximize lifetime value (LTV), and make every guest feel like a regular—without putting an extra strain on your team:
Give a Warm Welcome: Promote your loyalty program when guests place their first online order or sign up for in-restaurant WiFi
Cross-promote Sales Channels: Let QR code ordering guests know that you also offer curbside pickup and delivery
Boost App Downloads: Direct online orderers to download your restaurant app for a better user experience
Drive Repeat Orders: Make guests crave your food with a tailored message based on their order history and preferences
Win Back Cart Abandoners: Gently nudge guests when they’ve left something in their cart so that they’ll return to order
Show MVPs Extra Love: Incentivize guests with high lifetime value (LTV) with an irresistible offer based on what you know about them
Gather Valuable Feedback: Survey guests to make them feel heard, learn what’s working and what isn’t, and improve the guest experience
3. Optimize Your Social Media Efforts
Managing multiple social media accounts for a restaurant brand is a daunting task. To stay on top of the workload, consider using a posting tool such as Buffer or Hootsuite, that enables you to create and schedule content in advance for automatic publishing across platforms.
If you’re struggling to maintain a steady stream of posts, user-generated content can be a great resource. Reposting photos taken by restaurant guests is an easy way to show them love and add authenticity to your social feed.
Lastly, be sure to repurpose evergreen content so that you’re not constantly reinventing the wheel. Just remember quality over quantity.
4. Retarget Website Visitors and Social Followers
While guest acquisition is a critical part of any restaurant marketing plan, so is retention. It’s essential to not lose sight of those people who have already expressed interest in your brand: website visitors and social media followers.
By setting up a retargeting campaign, you can ensure that your brand stays top of mind long after website visitors leave your site—without doing any extra leg work. An eye-catching ad featuring messaging that resonates with your target audience can be the difference between someone returning to order or not.
Similarly, you can keep social followers engaged with your brand using targeted ads that remind them why they love your restaurant.
5. Leverage Your Existing Guests
When it comes to attracting new, high-value guests, your best resource is your existing base. By targeting lookalike audiences that mirror the interests and behaviors of your current guests, you can save time, lower acquisition costs, and boost ROI for digital marketing across social media and Google.
Sources for restaurant lookalike audiences can be CRM-based—email list, SMS subscribers, etc.—as well as online orderers, social followers, loyalty members, website visitors, and more.
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What’s Next for Restaurant Marketing
Looking ahead, restaurant marketers will continue to seek out new solutions and strategies to optimize campaigns, work more efficiently, and maximize their budgets. Here are two examples:
Customer Data Platforms: A CDP like Olo’s restaurant-specific Guest Data Platform gives marketers a holistic view of their guests, which they can then use to power hyper-targeted digital ads and personalized communications.
AI: With the introduction of ChatGPT, the powerful new chatbot tool, the opportunity to do more with less, particularly from a marketing perspective, is sky-high. From writing social media copy to tailoring marketing messages and informing SEO strategy, the applications are endless.
While restaurant brands are faced with a variety of challenges right now, marketers can do more with less by concentrating on attainable, high-impact goals, using marketing automation tools to deliver personalized and timely guest communications, and leveraging existing guests to find and attract new ones.
Everyone's talking about Customer Relationship Management (CRM) and Customer Data Platforms (CDP). Learn the differences and how they benefit restaurants.
Restaurant CDP, Restaurant CRM, Guest Data Platform, Customer Data Platform
To help you make sense of the ever-evolving restaurant tech ecosystem and how it all works together to benefit restaurants, we’re breaking down two of the most talked-about newcomers to the restaurant tech stack: Customer Relationship Management (CRM) and Customer Data Platform (CDP).
At a high level, both of these tools are used to personalize the guest experience with cross-channel communications that are timely, relevant, and tailored to the behaviors of each individual. Though both can add tremendous value to businesses, they function very differently.
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What is a CRM?
CRM stands for Customer Relationship Management. A standard CRM system collects data on a company’s direct guest interactions—like contact details and previous conversations—from a variety of communication channels, including their website, email, social media, and more. In other industries, sales teams utilize CRM systems to track and manage customer and prospect contact information, accounts, leads, and sales opportunities in one location.
Given that restaurants see thousands of guests per day, it would be unreasonable to expect operators to collect and store every nuanced guest data point by hand. A restaurant CRM like Olo’s eliminates that issue by connecting data from systems like your POS and online ordering solution as well as other custom-built (restaurant-specific) integrations—and making it actionable.
The action aspect of a CRM is not only critical but also differentiates solution providers. Every CRM has a unique set of actions you can take within the platform leveraging collected guest data—at minimum offering a way to create segments, engage guests via email, and so on. A restaurant CRM is built to take actions unique to engaging a restaurant guest like automating feedback surveys following an online order, incorporating offers into triggered email and SMS campaigns, and more.
In a nutshell, a CRM enables businesses to collect their guest contacts from select sources and organize them. And CRMs often also enable brands to communicate with their guests through integrated channels (e.g. via email)—and track those interactions over time.
What is a CDP?
CDP stands for Customer Data Platform. The Customer Data Platform Institute defines a CDP as: “packaged software that creates a persistent, unified customer database that is accessible to other systems.”
In general, a CDP connects all types and sources of customer data, including transactional, behavioral, profile, product, CRM, and offline, to create a single guest profile. Then, it can send that data to a myriad of destinations to make it usable.
A restaurant CDP like Olo’s Guest Data Platform creates individual guest profiles by connecting data from restaurant-centric systems including POS, loyalty programs, payment processors, reservations, guest feedback, mobile apps, online ordering, WiFi, waitlist, events, and e-commerce. It can then push that data to, again, restaurant-specific destinations like the host stand, menu engineering tools, real estate site selection vendors, a marketing automation solution, media channels, and the list goes on.
This gives every department—from marketing and finance to operations and culinary—a holistic view of guests, so they can sort, analyze, and act on those insights instantly.
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The Main Differences Between CRM and CDP
Both Customer Relationship Management (CRM) and Customer Data Platform (CDP) solutions collect guest data for businesses. However, there are a few important differences.
CDPs are designed to ingest massive amounts of data from a large number of sources. CRM data integrations tend to be more limited or require significant customization.
CDPs dedupe guest records automatically, which is vital when the data is being piped in real-time to several external tools. CRMs are built to make use of guest records from directly within the system itself and often include reporting or audience-building filters manually controlled by the CRM admin.
CRMs track known guests, whereas CDPs combine data from known contacts and reduce the number of anonymous profiles by connecting the dots between guest behaviors (e.g. a frequent diner could remain anonymous until their first online transaction—but their profile is zippered together with a unique credit card token)—to create a single source of truth.
CDPs are not designed to take action to the end guest. Outside of data consolidation and identity resolution, CDPs only send data to external tools. CRMs, on the other hand, regularly have action baked in.
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Which is Best For Restaurants: CRM or CDP?
There is no one-size-fits-all solution to optimizing a restaurant tech stack. There are numerous factors to consider including, but not limited to, overall business goals, budget, guest experience, operations, marketing, and beyond.
Restaurants can use the Guest Data Maturity Pyramid (Fig. 1) as a guide to determine which technology will best suit their business needs. Most brands start at the base of the pyramid to build the foundation of guest data architecture. At this stage, a brand may simply need data that is accessible and usable, in other words, a CRM.
As brands mature, they start to move up the pyramid. A CDP can help these brands with things like unifying and enriching guest profiles, gathering additional insights, piping data to other business intelligence tools, marrying data to financials, and leveraging lifetime value (LTV) throughout the organization.
It’s important to note that a CRM and CDP are not incompatible—more often than not, they’re interconnected. In fact, the best CRM for restaurants is one that can act as both a source and a destination for actionable data coming in through a CDP. For example, having your CRM and CDP connected would give you the ability to enrich guest data back into the CRM.
Fig. 1
How Restaurants Can Benefit From a CRM
Good restaurant GMs and team members store personal details about regulars—favorite dishes, hobbies, family, etc.—in their heads. The problem is: It’s not scalable. They cannot easily share that information with other teams, especially corporate functions like marketing, culinary, or real estate. And to make matters worse, with staff turnover, those crucial guest details can be lost altogether.
A restaurant CRM eliminates those issues by collecting vital guest intel, along with contact information, communication history, and engagement channels, in one location so it’s never lost and can be accessed by others.
Keep in mind that not all restaurant CRMs are created equal. Some are integrated with other tools—like waitlist, reservations, POS, and more—while others are more limited in functionality. Additionally, only some CRMs offer analytical capabilities that enable operators to segment guests or export data. And when it comes to actually acting on that data, some CRMs feature SMS or email marketing automation, while others do not.
Given that no two CRMs are built exactly the same, it’s important to thoroughly vet any solution before adding it to your restaurant tech stack in order to get the best bang for your buck.
How Restaurants Can Benefit From a Customer Data Platform
When restaurant brands are ready to do more with their guest data than a CRM can offer, they graduate to a CDP. A restaurant CDP can fuel the next phase of growth by making data more accessible to everyone, integrated with a wider-reaching set of sources, and actionable across an essentially unlimited number of destinations.
Restaurants often struggle to access their guest data due to archaic systems or limitations set by tech vendors. With a CDP, restaurants gain access to usable data from countless sources—online and offline—merged into a single guest record. Here are just a few of those sources:
Even brands that have access to their guest data typically do not have the team or the technology to stitch it all together. And systems that strictly unify data add another layer of costs. Some of the primary benefits of a restaurant CDP are that it eliminates data deserts, manual workflows, tech-stack dependency, and vendor lock-in.
With a CDP, restaurants can push a singular, enriched guest record to the destination vendor best suited to meet the brand’s business goals, including marketing, business insights tools, or data warehouses. For example, brands can use lifetime guest data to tailor email and SMS marketing efforts, as well as search and social advertising, with conditional messaging that drives guests through the funnel based on their engagement.
Through unifying and enriching guest profiles, a CDP can tell a brand exactly where and why guests spend money. By piping data to business intelligence tools and using the lifetime value (LTV) metric, brands can quantify the results of marketing dollars spent, staff training, menu optimization, real estate selection, etc.—and make strategic business decisions based on the behaviors and preferences of high-value guests.
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Still on the Fence?
If you’re still unsure of which solution is right for your restaurant brand, you’re not alone. For some, the data accessibility that a CRM provides is enough to satisfy their business needs. For others, the extra layer of data integration and flexibility that a CDP offers will be key to growth.
The truth is, that a CRM and CDP are not mutually exclusive. Each works with the other to provide a holistic view of the guest.
With a restaurant CDP, specifically designed to integrate with (often antiquated) POS systems, brands finally have the option to move up the Guest Data Maturity Pyramid and maximize lifetime value with enriched, actionable guest data.
In the end, restaurant brands that invest in technology that harnesses data—and act on it—will provide the best guest experience, edge out the competition, and build a profitable future.
Restaurant Marketing, Restaurant Guest Segments, Email Marketing, Social Media Marketing
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People increasingly want to hear from their favorite brands, but blasting the same email to every guest—with no regard for their unique preferences, behavior patterns, or level of engagement—can be a costly mistake.
With restaurant guest segmentation, you can tackle a myriad of strategic objectives: win new guests, see them more often, boost online ordering, keep regulars engaged, and more.
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5 Restaurant Guest Segments to Set Up Today
The best way to jumpstart a restaurant marketing plan is to build these five guest segments, which will enable you to personalize omnichannel communications and maximize lifetime value (LTV).
1. High-Value Guests
Segmenting by high check average is a foundational step toward targeted restaurant marketing. A good baseline is the top 10% of spenders. Why? Guests who spent a lot at your restaurant once are likely to have a high check average again, and therefore should make up a larger portion of where you invest your marketing dollars.
2. Loyal Fans
If a high-value segment is foundational, a segment of guests that is highly engaged is the second layer in that foundation. A loyal guest with a slightly lower check average may prove to have a higher lifetime value in the end (e.g. they spend less but they visit frequently). Plus, they’re more likely to be brand loyal if marketing communications speak to their personal preferences. This segment is made up of guests who come in regularly, order online often, and open most of your emails.
3. Churn Risks
It is proven to be more expensive to acquire new guests than it is to retain existing ones, so it’s worth putting time and resources into retaining lapsed visitors. When creating this segment, consider setting up filters to capture restaurant guests who used to visit or order regularly, but haven't in the past 6+ months (depending on your guest frequency averages).
4. Online Orderers
Restaurant delivery and curbside pickup are essential and will continue to grow in the future. A segment of online orderers allows brands to suggest high-value takeout items to interested diners, but also market in-restaurant experiences to increase on-premise sales.
5. Daypart Devotees
There are many ways to slice, dice, and cook up strategies to leverage daypart segments. One approach worth testing is using a segment of current daypart devotees to target lookalikes—meaning guests who mirror those already visiting regularly during your slower shifts. Want to drive business on Monday or Tuesday night? Targeting lookalikes of guests who have proven to be weeknight warriors in the past is a great place to start a paid search or social effort.
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Restaurant Marketing Ideas
Restaurant guest segmentation is only the beginning. The real fun (for marketers at least) starts when those segments are put to work through personalized communications geared toward each segment’s preferences and purchase behavior. Here are a few examples of restaurant marketing campaigns that leverage segments:
Goal: Boost Online Order Frequency with a Triggered “Inside Scoop” Email Campaign
Segment: Guests who have ordered online, but haven’t ordered within the last month
Trigger: It has been 30 days since their last online order
Campaign: Personalized email campaign promoting special takeout-only menu offerings. “Hey, Naomi! We want to let you in on a sweet secret. *Whispers* Did you know we have a s’mores kit that is only available to-go?”
Win New Guests | Social Media Marketing for Restaurants
Goal: Attract Guests to a New Location by Targeting Lookalikes with a Lead Magnet
Segments: Top 1% most frequent visitors and/or top 10% most valuable guests
Lead Magnet: $20 toward your first meal (with a qualifying minimum spend)
Campaign: A social media campaign promoting your grand opening and the first week of specials targeted to lookalikes of your current regulars who live nearby your new location. For added effectiveness, require people to first share their email to access the $20 gift card (aka “email gate”) and grow your marketable guest database.
Boost Brunch Business | Multi-Channel Restaurant Marketing Plan
Goal: Drive Brunch Sales with a Multi-Channel Campaign Promoting New Menu Offerings
Segment: Saturday and Sunday Regulars who visit between 9 a.m. and 1 p.m.
Campaign: Send a personalized email campaign promoting your brunch cocktail menu on Tuesday, then launch a re-targeted social media campaign to the same segment featuring your signature cinnamon roll on Friday to keep brunch top-of-mind as guests head into the weekend.
Segments are just the beginning of a personalized restaurant marketing strategy—once built, you can start to track their growth, frequency, and check average. For more inspiration, check out 6 Guest Retention Strategies that Actually Work.
Every day, restaurant CFOs field numerous requests to spend more money. If they approve the wrong expenses, the brand ends up in a ditch. Spending too much on labor or spending too little. Spending too much on food costs or too little. The same is true in every department.
To make matters worse, what you should spend varies from brand to brand—and location to location. Some guests will pay up for better food ingredients, others won't. Some guests will pay for a location that offers a unique dining experience, others won't. These decisions are all shades of gray, and they're endless.
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Certain Costs and Uncertain Benefits
The reality is that every restaurant CFO is forced to predict what their guests are willing to pay for, and to what extent. Over the years, tools have emerged to help CFOs understand what's working and what's not, including:
Online Reviews
Secret Shops
Traffic Counts
Each is insufficient.
Online Reviews: Do the opinions of these people represent our guests in general?
Secret Shops: Even if we deliver our brand standard to one party, does it resonate with all guests?
Traffic Counts: Are we churning through guests, or are we doing a good job retaining them?
To this day, CFOs are faced with certain costs and uncertain benefits—the balancing of guest experience and cost. When faced with enough of these decisions, most people will start indexing toward reducing cost—it's the logical thing to do.
In his book “Restaurant Man,” Joe Bastianich shared that his secret to success in restaurants was "watching costs while focusing relentlessly on exceeding customer expectations." Restaurant margins are often tight; there's no room for error.
Like other complex ecosystems, it's difficult to quantify the effect of forces interacting with each other. (Aside: For an interesting read on ecosystems, I'd recommend “Serengeti Rules,” written by evolutionary biologist Sean B. Carroll.)
The net of all this: CFOs and the brands they lead sink or swim based on the strength of their judgment (and their luck).
It doesn't have to be that way.
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Why Lifetime Value is a Critical Guest Health Metric
In other industries, especially retail e-commerce, brands optimize everything around Lifetime Value (LTV). LTV is the predicted cash flow from a guest, based on their recency, frequency, and monetary spend. You can think of it as a guest-level Discounted Cashflow Analysis.
Professor Peter Fader of The Wharton School at The University of Pennsylvania pioneered the LTV field 20 years ago, and it has since gained traction across industries. In 2016, Fader founded a company called Zodiac, which calculated customer lifetime value and was later acquired by Nike. Recently, Fader founded another company called Theta, which calculates company valuations based on guest data. Fader's and Theta Equity's work is used in tech, e-commerce, and hedge funds to help leaders fine-tune day-to-day operations.
The LTV science applies as much to restaurants as any other business. Legacy POS systems, tech vendors that "own" the guest data, and fragmented SaaS systems are the root problem. It's impossible to know the value of each individual guest when the data resides in disconnected silos.
In three years, harnessing the power of guest data will be table stakes. Today it differentiates—the Roark portfolio, Panera, and just a few others do it well.
Retail e-commerce nailed it. Restaurants can take lessons on six fronts: Strategy, Marketing, Operations, Menu, Labor, and Real-Estate.
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How Restaurants Can Use Lifetime Value
Strategy
According to Olo data from more than 18 million guest records, the top 5% of restaurant guests (by LTV) drive about 30% of revenue, and the top 20% of guests drive 60% of revenue. This is a law for every restaurant business. The entire executive team should understand:
Who those top guests are (psychographics and behavior most importantly)
Why they visit (purchase patterns, daypart patterns)
Why they stop visiting (NPS, feedback)
How we find them (acquisition channel)
Percentage of Revenue by LTV Percentile
Marketing
Based on a strong foundation of understanding of the guest, now marketing can drive guest counts. In the future, marketing will be increasingly precise and measurable. Top guests spend 6x the average and 25x the bottom. On the side of acquisition, marketing can seek out those guests and justify paying a higher price to acquire each of them.
I don't know of a single CFO who would complain about spending $20 to acquire a guest who spends $750/yr as opposed to $5 to acquire a guest who spends $50/yr. Knowing the guest teaches you where to fish. Historically, the challenge has been tracking a single guest across visits.
From a frequency perspective, marketing teams can now nudge guests in exactly the right way at exactly the right time. If frequency dips, or it's been a while since they've visited, or they give you poor feedback, send an automated message (or series of messages) to the guest on the channels where you can reach them. The work here is testing and improving those messages—not sending or measuring campaigns.
Operations
Growing up working in restaurants, the CRM was in my brain. I had an anecdotal inventory in mind of who the valuable guests were. I knew their names, what they liked to drink, and their hobbies. I really cared.
But guest relationships can’t be entirely dependent on individual employees. Otherwise, every time you hire someone new, they have to rebuild that CRM from the ground up. It puts employees in an unfair position and alienates regulars. No regular loves the "have you dined here before?" question.
To ensure that guests keep coming back, even when staff turnover occurs, brands need an institutional memory rooted in data. Today's restaurant systems ensure that all employees know the regulars—whether they're in the building or ordering online. But we shouldn't stop at regulars. What about people who had a bad experience last time, haven't been back in a while or might like a new item on the menu?
It may seem like magic, but all this information can be displayed in the host stand system and pushed into the POS in real time.
Labor
If a server (full-service) or cashier (limited-service) gets guests to return more than the average employee, they should get rewarded. In full-service, that means better sections, and in all service types, that means better schedules. That part is obvious, yet mostly subjective.
The simple metric to provide managers is an employee’s Repeat Customer Rate: the number of guests who come back for another visit divided by the total number of guests they see. Managers should know an employee's Repeat Customer Rate within the first 90 days of hiring a new front-line employee.
What if you indexed your hourly pay to Repeat Customer Rate? Employees who drive high repeats should get paid more per hour. Repeat Customer Rate is a simple, transparent, fact-based metric to align employee incentives with those of guests and shareholders.
As a thought experiment, how much would you pay a server if they got every guest to visit again?
Menu
If you're not making menu decisions based on reorder rates, you're doing your guests a disservice. Let's explore a few theoretical menu items:
High volume, high repeat = All-stars, put these everywhere in your acquisition campaigns.
High volume, low repeat = Guests want to love this item, but they don't. These are the worst items of all because they turn off droves of new guests. Test new recipes here, fast!
Low volume, high repeat = It may seem like a bummer of an item, but your regulars are the ones who buy it. These kill you when you take them off the menu.
Low volume, low repeat = Not worth the space on the menu, and not the complexity to carry the food costs. Kill these items.
Mapping Menu Engineering to Guest Retention and Frequency
Real Estate
Every restaurant brand wants to pick locations near where their guests live, work, and play. In order to do that, you need to know exactly who your guests are and their respective lifetime values.
Brands can identify sites with high ROI potential by leveraging restaurant technology and analytics firms that provide actionable insights rooted in data, including mobility, demographic, LTV, purchase history, preferred sales channel, etc.
Give your real-estate team a spreadsheet with this intel so they can ensure your newest locations are set up for success.
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How to Get the Restaurant CFO On Board With LTV
Today, you'll be uniquely good if you embed lifetime value into your company. In three years, you'll be uniquely bad if you haven't. LTV is the most critical guest health metric.
For non-finance types, if you're wondering how to convince your CFO to spend more money—prove to them that your project will drive LTV through:
Acquiring enough new target guests
Maximizing the "lifetime" of each guest
Maximizing the transactions guests make over their lifetime
Maximizing the margin per transaction
To find out how to unlock LTV and leverage those insights across your entire business, contact us.
Virtual concepts are all the rage, but are they right for every brand? Find out how virtual restaurants work, the benefits and disadvantages, and more.
Silicon Valley began funding delivery-only startups in 2016, but it wasn’t until 2019 that virtual restaurants started making waves. With the advent of COVID, the trend has taken off with some of the largest concepts, like MrBeast Burger, generating $100M in revenue across 1,600 virtual kitchens in roughly 15 months.
With that level of success, it’s no wonder restaurant brands of all types are seriously thinking about launching one of their own. But there’s a lot to consider—from unique offerings and packaging to competition, location, and marketing.
To help you determine if a virtual restaurant is right for your business, we’ve compiled a guide of opportunities, challenges, and best practices based on our experience launching over 75 virtual restaurant brands.
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What is a Virtual Restaurant?
A virtual restaurant is a delivery-only concept with a full menu that exists solely online and is often listed on third-party marketplaces, with no traditional, brick-and-mortar restaurant space.
Virtual restaurant brands can operate out of an established restaurant or a ghost kitchen. While the terms are often used interchangeably, a ghost kitchen (aka a dark/cloud kitchen) is a shared commissary space without a dining room that one or more virtual restaurants can rent to prepare off-premise meals.
Guests can place an order for delivery via a virtual brand’s website or a third-party marketplace.
While virtual restaurants have proven to be a worthy venture for some brands, there’s plenty to consider before diving in. Here are just a few of the potential opportunities and challenges of launching a virtual brand.
Opportunities
Minimal Overhead: Without a dining room and front-of-house staff, there are fewer ongoing expenses, such as utilities, equipment, salaries, etc.
Additional Revenue: Virtual brands can be a valuable source of incremental revenue for established brands with underutilized kitchen space.
Flexibility to Test: Brands can iterate on menu favorites or repurpose ingredients to create new dishes.
Less Food Waste: By leveraging delivery data to make food preparation decisions, as well as splitting and reusing ingredients within a shared kitchen space, virtual brands can minimize food waste and help the environment.
Reach New Guests: Established businesses can breathe new life into their brand—or reinvent themselves altogether—to reach new demographics.
Quick to Set Up: Without a brick-and-mortar location or a large staff, standing up a virtual brand can be far less intensive than a traditional restaurant.
Room to Expand: If successful, a virtual concept could seamlessly transition into a traditional restaurant or even be absorbed by a parent brand, just as Wingstop incorporated Thighstop into its permanent menu.
Challenges
High Partner Commissions: To drive sales, many virtual brands are reliant on third-party marketplaces, which can charge commission fees as high as 30%.
Harder to Form Relationships with Guests: Building trust and long-term loyalty can be difficult for virtual brands that have fewer ways to interface with guests.
Brand Building: Virtual concepts that don’t have an established parent brand have to build everything—from an audience to branding and marketing—from scratch.
Quality Control: Quality can suffer if kitchen staff have to juggle orders from multiple concepts. And if third-party providers are entirely responsible for delivery, brands have less control over order accuracy and customer service.
Reputation Management: Reviews can make or break any restaurant’s reputation, but virtual brands are especially vulnerable since they operate entirely online.
Inaccessible Data: Unless virtual brands take orders directly through their website, guest data can be difficult to access and leverage when owned by third-party marketplaces.
Staff Burnout: Brands run the risk of overwhelming staff if they’re unable to effectively manage the flow of orders from a virtual concept and their typical restaurant operations.
Credit Mikhail Nilov from Pexels
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Virtual Brand Best Practices
In the process of helping dozens of virtual restaurant brands get off the ground, we learned a thing or two about how to set a concept up for success. Keep these tips in mind for a strong debut and sustainable growth over time.
Well-Researched Business Plan: You wouldn’t open a brick-and-mortar restaurant without a solid business plan—a virtual concept should be no different. Thorough market research, competitive analysis, budgeting, a comprehensive marketing plan, business structure, and financial projections are critical.
Small, Focused Menu: Winning virtual brands have unique but simple menus. They’re straightforward, optimized for quick conversion, and accompanied by mouthwatering imagery.
Professional Branding: Every guest touchpoint—from your website to packaging, and marketing—should be uniquely branded to help generate awareness, provide a consistent guest experience, and establish trust.
Direct Ordering: Marketplaces can be a powerful tool for driving first-time orders, but to build an actionable database and deepen guest relationships, a direct ordering restaurant website and/or app is critical. That’s why Virtual Dining Concepts leveraged marketplaces to garner interest in MrBeast Burger alongside social media and giveaways encouraging people to download its branded ordering app.
Know Your Audience to Grow Your Audience: While some brands, like Wingstop, have successfully tapped into an existing fanbase to find an audience for their virtual concept, others have teamed up with celebrities to generate buzz. Mariah’s Cookies, for example, targeted Mariah Carey’s 10 million-plus followers on Instagram to build awareness across 30 major U.S. markets. Ultimately, brands should play to their strengths and pursue strategies that appeal to their target market.
Multiple Delivery Service Providers: Since virtual restaurants need fast and reliable delivery to be successful, brands should consider enabling multiple delivery service providers.
Retention Campaigns: To keep guests coming back and ensure they become more valuable over time, virtual brands need to prioritize retention campaigns (e.g. direct online orderers to download your restaurant app for quicker service; encourage email subscribers to sign up for SMS messaging for insider perks; give weekend regulars a reason to order during the week, etc.)
Engage With Reviews:Restaurant reputation management is paramount for virtual restaurants. Brands can make guests feel heard and appreciated by responding to online reviews—good and bad—promptly.
Test and Adapt: Successful virtual brands continuously refine their strategy based on what’s working and what isn’t according to guest data and feedback.
What’s Next for Virtual Restaurants?
It’s estimated that virtual restaurant brands will become a $1 trillion industry by 2030, but it’s important to remember that the trend is still in its infancy. Many virtual brands are actively trying to figure out their niche and the key to earning repeat business.
According to research from Datassential, the future of virtual brands is mainly dependent on consumer education and transparency. While the research firm estimates that more than 13,000 virtual brands are operating in the U.S., it found that half of restaurant-goers had virtual brand awareness and just 34 percent have ordered from one.
To establish trust with consumers and gain a loyal following, virtual brands must prioritize quality, consistency, transparency, and exceptional service. By following the best practices above and teaming up with a knowledgeable tech partner, virtual restaurants can be a lucrative venture for traditional brands and startups alike.
Faced with a labor shortage and budget constraints, many restaurant brands are looking for a quick marketing solution that’s going to drive ROI. But in reality, what works for one brand may not work for another. Why?
Your guests and their relationship with your brand are unique
The most effective marketing campaigns are rooted in data
As tempting as it might be to test out every marketing channel and tactic at once to see what works, don’t try to boil the ocean. It’s the quickest way to overwhelm any team and, frankly, waste your time and resources.
Instead, consider narrowing your focus to one marketing objective.
Yep, you read that right—one.
Here are a few examples:
Move guests from one visit to five visits
Ensure every guest tries your most popular menu item within 90 days of their first transaction
Drive restaurant app downloads
Build up your SMS subscriber audience
Motivate online orderers to try delivery
Incentivize guests that typically use marketplaces to order direct
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Now you’re probably thinking, how do I pick just one objective when we have countless initiatives?
Start by getting your data in order.
Determine what restaurant data sources you currently have access to, including email opt-ins, online orders, POS transactions, loyalty members, CRM, etc.
Next, it’s time to analyze. As you look at the data, ask yourself questions like, who are your guests? How do they behave? What is your average guest frequency? What is your most lucrative sales channel? Can you segment guests by lifetime value (LTV)?
By focusing on even one of these insights, you can figure out which marketing channel (search engine, social media, email, SMS, etc.) and strategy have the highest ROI potential for your brand. For instance, is your restaurant app more effective than social media for guest engagement?
If you can’t answer these types of questions because of a limited data set, a good marketing objective would be to connect more of your restaurant systems so that you have a holistic view of each guest. Cross-department collaboration will be key, so make sure your Marketing, IT, and Finance teams are looped in.
Remember, it’s impossible to create a marketable database and treat every guest like a regular if you have disparate systems and no shared understanding of who your guests are or how they behave.
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Once you’ve picked a channel and settled on a plan of action, start executing marketing campaigns. Here’s some inspiration depending on your objective:
Drive foot traffic to a slow daypart: Launch geotargeted Google Ads during those hours of the day, bidding on relevant keywords (e.g. Smoothies near me) and featuring an attractive offer.
Target cart abandoners with remarketing: Invite cart abandoners back to your website to complete their online order with personalized remarketing ads that follow them as they surf the web.
Gather guest feedback at scale: Collect valuable feedback to power your business decisions via automated post-visit surveys. Add a tasty incentive—like free chips and queso on their next visit—for good measure.
Grow your social media following: Launch an email campaign featuring your most popular dishes on social media with an invitation to follow along. Drive engagement by encouraging guests to use a branded hashtag on their posts for a chance to be featured on your feed.
After you’ve gained some experience and insight into what works (and what doesn’t) for your brand, you can graduate within each channel. Think of it as building blocks and treat each marketing bucket as a progressive opportunity.
For instance, if your goal is to increase the number of direct online orders by driving traffic to your website, you could start by launching Google Search Ads targeting people looking for similar cuisine within 10 miles of your restaurant. Once you’ve honed in on the messaging most likely to convert window shoppers into paying guests, set up website retargeting to ensure your brand stays top of mind and invite visitors back.
Whatever your chosen marketing objective, make sure to share your plan—including what you’re testing and why—with your franchisees so that they’re aware and can provide support.
Ultimately, restaurant brands that take a data-driven, hyper-focused approach to marketing will see the highest ROI, not just in terms of sales, but also in terms of guest acquisition and retention. So the next time you’re tempted to do it all, think quality over quantity.
Restaurant marketers are always looking for new guests, but we can't underestimate the value of current guests. Learn retention strategies for all stages.
Restaurants typically have a handful of loyal regulars who GMs and bartenders know by name, but behind the scenes, restaurant marketers are on a never-ending treasure hunt to find and attract new guests. While there are numerous restaurant guest acquisition strategies that marketers can leverage, it’s important not to underestimate the value of current guests. After all, research tells us that increasing guest retention rates by 5% increases profits by at least 25%.
Since retention is critical at all stages of the restaurant guest lifecycle, we’re breaking down some proven strategies, with frameworks you can actually use.
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6 Winning Restaurant Guest Retention Strategies
1. Use Data for Good (Especially When It Comes to Your Regulars)
Personalization is no longer just a nice-to-have. Guests are beginning to understand the power of their data, and increasingly want brands to use it to serve their interests via personalized offers, experiences, and suggested products. Tailoring what you sell to a guest’s purchase history, preferences, and what they have engaged with is a crucial strategy to build restaurant brand loyalty.
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Framework You Can Use
If you’re not already looking to retail for inspiration, start now, paying close attention to personalized marketing. When a guest on the waitlist leaves before being seated, treat it like an abandoned cart and send a strategic email to prompt them to return (stats suggest a 48% open rate for emails like these). Make like retail giants and bundle items—when a guest orders tacos, trigger a campaign suggesting the tacos are frequently enjoyed with an agua fresca and salsa trio. Best use case: A/B test different bundles to see what drives higher check averages and visit frequency.
2. Like Rome, Guest Relationships Aren’t Built in a Day
When it comes to those guests you’re just getting to know, winning second and third visits is a leading indicator of a “guest for life.” The means to that end is a structured cadence of personalized outreach—said differently, giving new guests more chances to engage increases your opportunity to build brand loyalty. And, consumer research shows that personalization increases visitor engagement by 55%.
Framework You Can Use
Build a scalable, repeatable framework for your new guests with a variety of ways to engage as they move through the lifecycle. Pay attention to what works, and tweak accordingly. Try this cadence:
First Visit/ WiFi Signup/ Online Order >> Welcome email promoting your insiders' club (the more tailored you can make this to their experience the better, e.g. drilling down by location visited or the channel via which they first made contact)
After Second Visit >> Let them know you’re listening with a triggered survey: “Hey Caleb, how’d we do? Would you recommend us to a friend?”
After 30 days >> Email campaign featuring occasion-based messaging such as “Did someone say Happy Hour? Right this way…”
After 3 months >> Email campaign featuring your most popular dishes on social media with an invitation to follow along and share: “Tag your posts for a chance to be featured on our feed.”
After 6 months >> Seasonal menu reset with an invitation to get involved: “Be one of the first to taste the new dishes on our menu at a special event for loyal fans …”
After 1 year >> Anniversary perk “Have this cake … on us. And yes, please eat it too!”
3. Go with the Flow (of Guest Frequency)
The Gartner Group found that the Pareto principle holds true with consumer behavior: 80% of your future profits will come from just 20% of your current guests. It’s worth putting time, effort, and resources into guest retention, but not equally for all guests. The key here is segmenting by value and analyzing each segment’s frequency. With that, you can allocate time and resources according to value, and build outreach aimed to increase their known frequency.
Framework You Can Use
Guests with a high check average may be occasion-based guests with a twice-per-year frequency for birthdays and anniversaries. Send them a personal invite to join for a New Year’s Eve toast or Mother’s Day brunch to increase their frequency to quarterly.
Meanwhile, a segment of high-value guests may have a lower check average and bi-monthly frequency. Aim to get them coming in once a month by sending them an easy-to-use offer that appeals to convenience.
4. Go Outside the Inbox
To reach guests who have stopped engaging with your brand, try a structured cadence across multiple platforms. Research shows that companies using multiple channels to connect with guests increase satisfaction by 15-20% and boost growth by 20%.
Framework You Can Use
Build a cadence around lapsed guests that includes personalized email, targeted social, and paid search outreach. Keep your automated lapsed guest content up-to-date with regular maintenance. Every six months, pull the entire list and test new platforms. Make sure to track engagement so you know what works.
5. Optimize for Conversion
If you want guests to keep coming back, you need to make sure that all sales channels are optimized for conversion. Otherwise, they’ll choose a different restaurant that meets their needs.
Framework You Can Use
Online Ordering: How easy is it to place an online order and checkout? If your menu is difficult to navigate or the checkout process is cumbersome, for example, your cart abandonment rate is going to be high. Ensure that your online ordering system enables guests to place an order quickly and securely. Bonus points if they can easily reorder their favorite items.
Convenience is Key: Can guests pick up their order curbside or in-restaurant? Is delivery an option? The more handoff options, the more likely guests will follow through with their order and keep coming back. In fact, according to Olo data, brands that enable four or more handoff modes typically see a 12%+ increase in conversion rate.
Google: Can people join the waitlist, book a reservation, or place an online order directly from your Google listing? If not, that’s one unnecessary hoop for returning guests to jump through. Eliminate friction by ensuring your Google listing is fully optimized for conversion.
6. Tighten the Feedback Loop
While 72% of guests will share a positive experience, for every 26 unhappy guests only one is likely to say anything to you. Good, fast, empathic guest feedback management is crucial. In addition, being proactive about collecting feedback is a great loyalty builder—77% of consumers view brands more favorably if they seek out and apply guest feedback.
Framework You Can Use
Build trust with a multi-level feedback strategy.
When a guest reaches out with valuable feedback in any way (third-party reviews, social media comments, survey responses), it’s essential to engage quickly. Acknowledge their experience and let them know from the beginning that you value their feedback, positive or negative. Take action to fix the problem. Say thank you.
Continue to build relationships by proactively asking for feedback (automated post-meal surveys work great). When guests reply, thank them and reward them.
For the super loyalist, consider consumer panel special events. “You are an important part of growing our brand and your voice matters.”
Take a moment for meta-feedback and ask how your engaged guests like to be contacted. Do they prefer a quick text survey, an email, a social form, or an in-person menu workshop? Are they okay being contacted after every visit, or do they prefer a couple of months between surveys? Make sure to contact them accordingly.
In summary, unless you test and implement retention strategies to keep current guests, you’re missing out on the opportunity to maximize their lifetime value and revenue for your brand.
With the holidays right around the corner, restaurant brands of all types and sizes are gearing up for one of the busiest times of the year. To help you maximize revenue, guest loyalty, and employee satisfaction this season, we’ve compiled a comprehensive list of winning strategies—from menu optimization to ticketed events.
When creating your plan of attack, consider the time investment, resources, value-add, and potential ROI—short-term and long-term—for your specific brand.
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1. Holiday Promotions
Get in the holiday spirit with an irresistible limited-time offer that motivates guests to take action. Fear of missing out (aka FOMO) can be a powerful tool.
Food For Thought: Give guests $20 off orders of $100+, free delivery with a purchase of $50+, or a free appetizer with their first online order.
Level Up: Generate excitement around the promotion on your brand’s social media channels via a holiday-themed countdown or photo contest that incentivizes participation and helps to grow your following.
2. Marketing
Launch an omnichannel marketing campaign across email, SMS, social media, and digital ads to inform new and existing guests about your holiday offerings. This multi-platform approach will increase your brand’s reach and help you meet guests where they are.
Food For Thought: On Dec. 23, ask guests if they forgot someone on their list and need a last-minute gift. Use this opportunity to promote your best-selling cookie cake, gift card, merchandise, etc.
Level Up: Leverage your restaurant CRM to segment guests—high-LTV, big spenders, churn risks, online orderers, etc.—and then personalize communications based on their order history and preferences. A tailored message, served at the optimal time, on a guest’s preferred channel is a recipe for marketing success.
3. Restaurant Gift Cards
Gift cards have been a staple in the restaurant marketing playbook for years, but demand has never been higher. According to research conducted by the National Restaurant Association in 2021, “62% of consumers hope to receive a restaurant gift card for the holidays.”
Food For Thought: Give guests the choice of purchasing a physical gift card that can be sent by mail or a digital gift card that can be sent electronically.
Level Up: Offer a “Give a gift, get a gift” deal to incentivize gift card purchases (e.g. Earn a $10 bonus coupon for every $50 spent on gift cards).
4. Retail Items
Retail can serve as an additional revenue stream, advertising vehicle, and method of strengthening guest loyalty during the holidays and year-round.
Food For Thought: Restaurant regulars go wild for branded merchandise like BBQ sauce, T-shirts, and tote bags. Not to mention, they pair well with restaurant gift cards. Put them front and center in your restaurant, on the website, and on social media.
Level Up: A wine or beer club with membership perks like exclusive events, discounts on food, and priority seating can provide a predictable revenue stream for restaurants. Plus, subscriptions make great gifts at any time of year.
5. Menu
Restaurant brands can put a festive spin on their menu with holiday meal kits, family bundles, and/or seasonal items such as hot drinks and other cold-weather favorites.
Food For Thought: Alleviate the stress of cooking for a crowd with “Thanksgiving-to-go” or appeal to your guests’ nostalgia (and tastebuds) with LTOs like hot toddies or pecan pie.
Level Up: Full-service restaurants can offer an exclusive, holiday prix fixe menu for guests that want an elevated dining experience.
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6. Online Ordering
Given how busy we all are during the holidays, online ordering is a no-brainer for maximizing revenue. Just be sure your digital order management solution can keep up. The right system will enhance front-of-house operations, streamline the order flow, and provide capacity management tools (e.g. throttling, item availability customization, lead time extension, etc.), so your team feels supported and can focus on guests.
Food For Thought: Encourage guests to order holiday favorites like honey-baked ham in advance. Then, recommend menu items that pair well or irresistible add-ons to upsell during checkout and increase average check.
Level Up: Provide a suggested tip during checkout to ensure team members get an extra boost during the holidays.
7. Multiple Handoff Modes
Consumer demand for convenience is at an all-time high during the holidays. Restaurant brands can ensure that every guest has access to their preferred method of ordering by enabling multiple handoff modes, including curbside pickup, delivery, and dine-in.
Food For Thought: According to Olo data, brands that enable four or more handoff modes typically see their conversion rate increase by at least 12%.
Level Up: By integrating third-party delivery couriers to your native online orders, you can grow guest loyalty while opening new revenue channels through a direct digital experience.
8. Catering
Holiday parties present a valuable opportunity to boost restaurant revenue via catering. With many businesses and families gathering to celebrate, brands should consider offering holiday packages for pre-order that meet the needs of guests and also increase brand awareness.
Food For Thought: Promote your Christmas feast or taco party pack—complete with utensils, napkins, plates, reheating instructions, etc.—on your website, social media channels, and digital ads.
Level Up: Create a catering-focused marketing campaign, including email, SMS, and/or digital ads, specifically targeting guests that have placed large orders in the past.
9. Reservations
Reservations play an important role during the holiday season when demand for dine-in soars due to cold weather and the desire to celebrate with loved ones. They can be a source of stress relief for guests who want to plan for an occasion and make guests feel special by eliminating the wait. On the flip side, reservations enable restaurant staff to better prepare for busy shifts and large parties.
Food For Thought: Boost reservations by enabling guests to book from any platform—your website, app, Google Business Profile, social media channels, and beyond.
Level Up: Paid reservations or prepaid bookings are proven to drive down no-shows. Consider introducing a nominal, nonrefundable reservation fee to improve guest show rates and generate revenue.
10. Ticketed Events
Build a community around your brand and maximize revenue at the same time by hosting holiday-themed ticketed events at your restaurant. These events can appear right alongside your regular reservations, piquing interest among repeat and new guests.
Food For Thought: Host an Ugly Sweater Party, Friendsgiving, or a cooking class geared toward achieving guests’ New Year’s Resolutions, and promote the event(s) across your marketing channels.
Level Up: Use your table management solution to create customized floor plans and table assignments before the event, and be sure to accept payments ahead of time to take the guesswork out of your guest list and drive down no-shows.
11. QR Code Ordering
QR code ordering can boost revenue by enabling guests to access the restaurant menu, order, and pay, all from their own mobile devices while sitting at a table. When guests order from a digital interface—without having to stand in line, wait for a server, or stress about indulging in add-ons—check averages and tip income increase.
Food For Thought: To encourage adoption, display eye-catching signage in the restaurant with straightforward instructions for how to order and pay at the table, and designate a team member to assist guests if they need help.
Level Up: Incentivize guests to use QR code ordering during the winter months with targeted marketing campaigns that feature a special holiday deal (e.g. Free dessert with your first QR code order).
12. Outdoor Dining
To extend the outdoor dining season and maintain a steady flow of revenue in winter, restaurants should think creatively about their physical space and offerings. Outdoor heaters, branded blankets, a thoughtful menu featuring warm drinks and hearty fare, and a little bit of ambiance (bistro lights, anyone?) can transform any restaurant patio into a culinary destination.
Food For Thought: Promote an outdoor Winter Ale tasting or turn the parking lot into a drive-in theater with a family-friendly menu.
Level Up: Add a fire pit or an Instagram-worthy backdrop—think flower wall, large mural, patterned wallpaper, or a neon sign—to attract guests and generate buzz on social media.
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13. Make Every Guest Feel Like a Regular
A lesser-known but highly effective way to boost restaurant profit year-round, but especially during the holidays, is by personalizing the guest experience. Brands can thoughtfully tailor every guest interaction, whether dine-in or takeout—no matter which team members are on duty—with an integrated tech stack that ties order history and other guest details in the CRM to the waitlist, reservations, order, and table management solution. In other words, make every guest feel like a regular.
Food For Thought: Alert managers about which table touches to prioritize during a busy shift or have a regular’s favorite drink prepared upon arrival.
Level Up: Send a targeted and timely SMS message to guests featuring an image of your new candy cane milkshake (or another seasonal menu item) that feels like it’s coming from a friend.
Contact us to discover more ways to maximize restaurant revenue during the holidays and year-round.
CDP, Restaurant CDP, Restaurant Customer Data Platform, GDP, Olo Guest Data Platform
Despite the last decade of focus on the topic, restaurant brands of all sizes still struggle to collect, analyze, and most importantly, act on guest data to grow their business.
Restaurants face a mix of challenges with their guest data that fall into a handful of categories:
Lack of Access: Data is stuck in archaic systems and some tech vendors block access altogether
Lack of Integration: Data can be accessed, but, no team has the time or technology to stitch it together (or systems that strictly unify data add another layer of costs)
Lack of Actionability: Integrated data isn’t being passed to the tools that Ops, Culinary, Marketing, and/or Finance teams can actually use in their day-to-day
Lack of Ability to Test or Experiment: Any combination of the above makes it nearly impossible to test and pilot new strategies—from menu engineering to online and offline restaurant marketing efforts
With the rising importance of technology, many brands were just waking up to the fact that they didn’t have the data infrastructure they needed to succeed.
Enter COVID.
Practically overnight, brands were forced to confront these obstacles as they had to digitize their business and, in many cases, adopt tech solutions that threatened to disintermediate restaurant brands from their guests. This set the stage for the next frontier of restaurant growth, specifically, guest centricity and the ability to build an on-to-off-premise experience that is seamless, personalized, controlled by the brand, and driven by data.
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Definition of CDP
Customer Data Platforms (CDP) exclusively serve the purpose of ingesting data, creating a single view of the guest, and piping that data to end platforms where it can add value.
So how does this new tech category fit into the restaurant tech stack? And is a CDP right for your restaurant?
Start by evaluating where your brand is today and then identify the data architecture that will serve your brand for the next decade.
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Signs You Need a Restaurant CDP
Data deserts: “I wish I could do X, but can’t get the data from A to B”
Manual workflows: “We will need another person just to analyze X data”
Tech-stack dependency: “We can’t implement X until we have Y in place”
Vendor lock-in: “We can’t afford to leave X—they just have too much control over valuable data about our guests”
Say Goodbye to Data Silos
Here’s the real revelation of CDP: it’s a single solution to ingest data from any source, merge that data to a single guest record, then send it to the right destination.
With a restaurant CDP, you don’t have to think about whether the vendors you’re working with will give you useful data—your CDP is there to ingest and make that data usable.
To help visualize this point, see the graphic below. While everyone looks at charts like this and gets excited about “dream scenarios” in the top right—without a clean, usable, data foundation, they’re just that...dreams.
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Benefits of a Restaurant CDP
To determine what a restaurant CDP like Olo’s Guest Data Platform could unlock for your brand, start by mapping out your current tech stack, with a specific lens on data sources and destinations.
Destinations are vendors who will help you act on the data. Examples include email and SMS marketing, search and social ad platforms, business insights tools, and even data warehouses.
It’s worth noting that sources can be destinations as well. An example of this is enriching guest data back into your restaurant CRM to fuel more impactful, targeted search, social, and even email/SMS campaigns.
This data source/destination exercise will get you to somewhere like this:
How Olo's Guest Data Platform—a CDP purpose-built for restaurants—works
How a Restaurant CDP Works: The Loyalty Program Use-Case
Imagine you’re a restaurant brand years into a loyalty program offering, yet, your loyalty vendor’s messaging solution doesn’t fully meet your expectations. Or, you want to facilitate personalization based on more data than just what’s within your loyalty/offers solution.
Are you stuck? Marketing leaders at many brands have said they feel that way. But, that doesn’t have to be the case.
By adding a restaurant CDP to your tech stack, you’d be able to—in this example—ingest points, spend, offer, and redemption data back to a centralized guest record that can also include data from web, social, or on-premise interactions not captured by a loyalty solution. Data could then be pushed to the destination vendor best suited to meet your goals. The bottom line is that the added flexibility of a CDP ensures you don’t have to switch one vendor to accommodate another or to adopt a new strategy.
Further, you can push this singular, enriched guest record to a marketing execution platform of your choice. This unlocks the ability to build conditional messaging flows that drive guests further down the funnel to habituation, all based on their unique interactions with your brand.
It's Time to Harness and Act on Restaurant Data
To remain competitive, leading restaurant brands will create data architecture that puts an accessible guest data layer at its core—combined with modular, best-in-class applications to act on the data. This idea is not new to digitally-native companies, like e-commerce, that are disciplined at tracking every step of their guests’ journeys because the needed data architecture is already built into their platform and experience. Now is the time for brick-and-mortar businesses like restaurants to reclaim their guest data and put it to work.
Learn about our Olo’s Guest Data Platform, a restaurant-specific CDP, and contact us to find out how it can take your business to the next level.
