In the past 16 months, much of the restaurant industry has turned its attention to customer engagement at all costs. When COVID hit, there was a widespread realization among operators that when customers aren’t coming in or have to stay home, smiling, happy regulars quickly become online strangers.
Those that were ahead of the consumer engagement game bounced back earlier and sustained better through the worst of the pandemic and are getting back to normal faster or doing better than they were in 2019.
Michael Schatzberg, a New York restauranteur and restaurant technology investor said the first mission-critical task when COVID hit was figuring out off-premises service, be it third-party platforms, curbside service or their own infrastructure. Soon after that, customer engagement naturally comes to the forefront.
“Now that successful operators had that set up, the next thing was, ‘I don’t want DoorDash communicating with my customers, I need to talk to my customers,'” said Schatzberg.
Communication is the key word there; real customer engagement is a two-way dialogue between consumers and a business. That’s an important distinction, as the term often gets lumped in with marketing, but the many new tools keep communication at the core to both determine what the consumer is doing and thinking, while enhancing a business’ ability to market directly.
Schatzberg said the practice allows him to market much more efficiently. Using an example of reaching local vegetarians with a targeted offer instead of sending them one of his restaurant’s steak deals. He called out Targetable as one helpful engagement platform he uses and has also invested in.
“I know I want to target this area, and they start using algorithms in certain demographics to understand your consumer, what you like and don’t like. They start saying, ‘I know this person is a vegetarian, so I’ll target my vegetarian advertising toward that person and that demographic,” said Schatzberg.
Instead of spending a hypothetical $100 on a billboard and hoping it grabs attention (or anyone is out and about to see it these days) he said, “I’ll spend $25 to get the vegetarians, $25 is going to toward the meat lovers or a steak special and maybe something is going toward red wine.”
The horse before that marketing cart is understanding the consumer patterns. Schatzberg called out two other tools specifically: Yumpingo and Ovation. Ovation, as we’ve covered before, is all about sentiment. Yumpingo is more personal, and it’s connected to the point of sale to ask very specific questions based on a customer’s exact order.
“There’s these different companies working on these different levels. Yumpingo is very granular, the Ovation is more like how was your experience, really quick and efficient,” said Schatzberg. “Now I capture that information and I start databasing that. It’s not about being creepy but bucketing Nick and saying, ‘these are the Nicks,'” said Schatzberg.
From that database of customer data, preferences and behavior comes more sophisticated, more targeted and more relevant advertising that gets closer to the one-to-one ideal of exactly the right message for exactly the right person at exactly the right time.
Asking consumers for feedback is nothing new, but new tools can transform an expensive focus group or unanswered survey into a routine and frictionless part of day-to-day business.
That knowledge can be transformational, as Teriyaki Madness CEO Michael Haith said it changed how the company positions itself in a very core way. He said the company tapped more traditional brand insight consultancy ZenMango, and said consumer engagement gets to the heart of what consumers see in a brand.
“We learned that the No. 1 thing our customers want is delicious food; I paid a lot of money for that,” joked Haith.
It might sound like a “duh” insight, but it helped with the entire company’s brand position. Instead of focusing on the healthy aspects of the food, the company focused on delicious food.
“We’re a healthy alternative, so do we, like other brands, tout our health? Do we talk about delicious food that’s healthy or healthy food that is delicious? That’s a big difference,” said Haith.
Bringing that kind of consumer engagement into the day-to-day with new tools and into the hands of the company’s data team goes a step further, not shifting the brand, but the every day messages and offers.
Jodi Boyce, the chief marketing officer for Teriyaki Madness, said plugging more people into the franchised company’s digital ecosystem showed just how powerful that can be. She found herself a natural experiment between digital first and traditional restaurants because of COVID.
“We opened 30 shops last year and 25 during the pandemic. But they were the most successful openings we’ve had in our whole system. With the pandemic, there were so many people forced to use tech the first time. It accelerated our app usage probably parallel to the third party, but we had huge adoption rates at our new stores,” said Boyce.
A key learning was what to do to get a loyalty member from the first to the third visit. Seeing how they behave and what they do in the system informs the marketing, essentially creating a targeted flywheel effect for each customer behavior.
“We’re doing a new welcome series to follow that customer journey. If they use the coupon right away, they get another offer right away. We’re just trying to be smart about the data we have,” said Boyce.
Finding the Right Tools
Customer engagement companies are numerous and anyone trying to differentiate them all might quickly find their eyes crossed. Operators like Haith know this well.
“I’m approached by almost a dozen ideas for tech marketing or tech execution a day, not all from this country. How do we choose what we want, we’re being bombarded,” said Haith.
He said right now, they have a dozen different pilots going in the segment, but not all operators can dedicate the resources to test all the tools. A recent look from marketing segmentation company Segment showed there were more than 8,000 marketing and engagement technology companies out there.
Schatzberg said he wanted to help narrow that staggering number down, creating The Branded Marketplace to feature restaurant vendors. The technology and innovation segment where customer engagement falls is still more than 100 companies, but Schatzberg said it’s been helpful for some of his peers. The list includes some of his investments, but many “best in class” vendors that are not, he added.
Finding the right solution for two-way communication may well be a perpetual project, but the past arduous months for restaurants is a stark demonstration that companies with ongoing dialogue with customers thrived. As the restaurant space becomes more and more digitized, operators need to address how they turn the table-side conversations into an ongoing, digital relationship.