Restaurants are in a bind. Despite rapid tech adoption over the last few years, most guests remain anonymous.
In other words, restaurant brands can’t confidently say how often their guests visit, what they order, how much they typically spend, etc.
Why?
Because approximately 80% of orders are manually entered into a POS system on-premise—without an associated guest, email, or phone number attached.
To further complicate matters, third-party delivery apps don’t share identifying information about guests with the restaurant they ordered from.
Vital details about both types of transactions are not only inaccessible to restaurants—because they’re stuck in a data silo or blocked altogether—they also can’t be used to personalize the guest experience, which is essential for driving profitable traffic.
Why most restaurant guests are anonymous
Historically, your best restaurant employees would memorize regulars’ orders, birthdays, and other personal anecdotes. Some still do.
But that valuable intel exists solely in their brain. It isn’t shared with other departments or team members. Worst of all, when those employees leave, it’s lost to the brand forever. This is especially problematic when labor challenges arise.
The industry’s digital transformation has helped address this issue by giving restaurants more data than most know what to do with. And yet, three significant obstacles stand in the way of brands fully knowing their guests.
1. Fragmented point solutions
Many restaurants have implemented tech solutions that don’t seamlessly share data. In some cases, data is stuck in archaic systems. In others, tech vendors block access entirely. These data silos make it impossible for brands to get a comprehensive view of the guest journey (purchase behavior, visit frequency, dietary restrictions, communication preferences, etc.) and leverage that intel to make smarter business decisions.
2. Low loyalty program participation
Loyalty programs are a popular way for restaurants to identify guests, capture insights, and drive incremental revenue. There’s just one problem. A loyalty program is considered high-performing if it accounts for just 25–35% of a restaurant's guest base. Remember, loyalty members aren't always your most valuable guests—the people you really want to learn from.
3. Not enough direct digital orders
When guests order directly from a restaurant's digital channels (website, app, kiosk), they identify themselves by entering their name, email, phone number, and payment information. This first-party data—combined with purchase history, preferences, and behavior—can be used to drive repeat orders, fuel marketing campaigns (with opt-in consent), and foster long-term loyalty. Nevertheless, only 18% of restaurant transactions are digital, according to market research company Circana.
What’s at stake when guests’ purchase behavior and preferences are unknown
According to Olo data from more than 100 million guest records, 60% of restaurant revenue is driven by 20% of guests. This highlights the immense impact a small portion of your guests can have on your bottom line—and underscores the importance of fully understanding and catering to them.
If you don’t know who those high-value guests are—including their preferred restaurant location and sales channel, how often they order and when, favorite menu items, average order value, etc.—you’re leaving money on the table.
Here are 10 things you can’t do if you’re unable to attribute transactions to particular guests:
- Identify your most valuable guests—and acquire more guests who mirror their habits
- Spot churn risks and create a strategy to win them back
- Offer menu recommendations based on individual interests or dietary restrictions
- Easily determine how to increase each guest’s order frequency and spending
- Maximize marketing ROI by creating accurate guest segments and behavior-based automations
- Tell which team members drive repeat visits—and how to retain a guest relationship if their favorite server leaves
- Figure out which guest feedback deserves the most attention
- Leverage guest data across operations, labor, menu, real estate, and beyond
- Personalize the guest experience at scale
- Drive profitable traffic—without resorting to discounting—and accelerate business growth
How to unlock essential guest insights and use them to power growth
The good news is it doesn’t have to be this way.
With the right tech stack, you can truly know your restaurant guests, unlock critical insights, and leverage that intel to make smarter, guest-centric business decisions.
Here’s what to look for.
Enterprise-grade online ordering system
First and foremost, you need an enterprise-grade ordering system built to support your direct digital ordering channels as you scale. Your restaurant website, app, and kiosks are critical sources of first-party data that provide actionable guest insights to power your business.
Unsure if your current system can accelerate your brand’s growth? Here are 9 signs you’ve outgrown your online ordering platform.
Restaurant-specific payment platform
In addition to protecting and maximizing your digital business, the right payment platform will process both on- and off-premise transactions (with or without a physical credit card present) and seamlessly share that data with your other restaurant systems so you can tie transactions to guests.
You want a single dashboard for managing all transactions and unified reporting to get a bird’s-eye or granular view of guests’ purchasing behavior—from average order value to preferred payment methods—and identify opportunities to increase revenue.
Guest data platform
A guest data platform creates individual profiles for your guests by connecting data from restaurant systems—POS, online ordering, payment processor, etc.—and pushing that data to restaurant-specific destinations like the host stand, a marketing automation solution, menu engineering tools, and ad platforms.
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.
High match rate
The more data shared between your payment stack and your guest data platform, the easier it is to identify guests, understand their behavior, create segments, and market to them. Your match rate—or how often you can match a credit card token to a particular guest—indicates how well the two systems communicate.
It’s not uncommon for restaurants to have a match rate of zero, especially if their payment processor isn’t integrated with the rest of their tech stack. However, brands using Olo’s Guest Data Platform combined with Olo Pay for card-not-present and card-present transactions can achieve close to a 100% match rate. In other words, nearly every single payment could be attributable to a specific guest—whether they ordered online or in person.
This can help you understand how often your online orderers dine in (and vice versa) and if purchasing behavior changes based on how they order. It’s also essential for determining the real north-star metric for restaurants: guest lifetime value (GLV)—or how much revenue each guest generates throughout their relationship with your brand. With access to GLV, you can identify your best guests, replicate the best guest experience, and find more guests who exhibit those same behaviors and preferences.
Restaurant marketing solution
Once you’ve unified and analyzed your guest data, you’ll need a way to build advanced segments, personalized marketing campaigns, and behavior-based automations. The right marketing solution will enable you to leverage that intel to maximize ROI across channels.
And, with every communication sent, you’ll gain new insight into each guest’s engagement level, preferred marketing channel, and interests. All this information will enrich their profile in your guest data platform, enabling you to better serve and market to them in the future.
Additional ways to learn about your guests
You can think of every digital touchpoint as an opportunity to enrich the profiles in your guest data platform and learn more about who your guests are and how they like to engage with your brand. For example, reservations, your digital waitlist, and in-store WiFi sign-ups can help match guests to payment and order data. The more you know about your guest journey, the better hospitality you can provide.
Seamless integration
Restaurants need systems that seamlessly share data to fully understand guest behavior and preferences and use that information to drive retention, acquisition, and business growth.
Consider this: How valuable is a loyalty program if it isn’t integrated with your online ordering platform? And how can you expect to retain dine-in guests if your POS doesn’t communicate with your CRM or guest data platform?
Integration capabilities also determine how quickly you can implement a new tech solution. The faster you can set up a new payment platform, for example, the sooner you can identify and understand your guests.
It’s time to get to know your guests
Anonymous restaurant guests are no longer a cost of doing business.
With a fully integrated tech stack comprised of an enterprise-grade ordering solution, unified payment system, guest data platform, and marketing software, brands can attribute up to 100% of direct orders—on- and off-premise—to specific guests, unlock essential insights like purchase history and preferences, and drive growth.
The process of identifying guests and fully understanding their behavior starts with prioritizing your direct ordering channels. Seize opportunities to enhance the guest experience, optimize for conversion, and educate staff and guests about the many benefits of ordering directly from your brand—including catering and direct delivery.
The more first-party guest data you have at your fingertips, the easier it will be to drive profitable traffic, win back churn risks, maximize marketing ROI, personalize every touchpoint, and increase guest lifetime value.
Ultimately, restaurants that know their guests best and do something with that intel will come out on top.
Request a demo to learn how top restaurant brands identify and unlock essential insights about their guests to power their business using Olo’s Order, Pay, and Engage solutions.
