Jul 10, 2015 | Customer Retention Strategies That Work

Fine Dining Restaurants– Let's Talk Marketing Data

Kane Russell — Marketing at Thanx by Kane Russell — Marketing at Thanx

In today's world – food, retail, finance, baseball, whatever – there's no more valuable asset than data. Fine dining restaurants, of course, are no different – as long as they're doing data right. 

fine-dining-restaurants-marketing-data

A year or so ago, I went to Ravinia (upscale outdoor picnic/concert venue outside Chicago, highly recommended) with a bunch of my "foodie" friends. One by one, folks arrived brandishing amazing bottle of wine after amazing bottle of wine; scrumptious dish after scrumptious dish. All was well, but we were without a BIG winner until my friend Jeff showed up. Jeff has zero gourmet tastes, but HE remembered to bring the opener.

I bring this up because of what's happening right now to fine dining brands and their marketing teams across the country. When it comes to marketing data, some restaurants have the wine. Some have the opener. But having one without the other simply does not work.

With Heavy Competition, Fine Dining Restaurants Turn To Marketing Data

Fine dining's need for better data and marketing results from hyper competition in the industry. According to Hudson Riehle, SVP of research at the National Restaurant Association, fine dining as a whole faces a "mixed economic outlook," and restaurateurs feel "generally optimistic" given that 41% of brands increased traffic over the last few years. Translation – the fine dining brands that succeed are doing so at the expense of their competitors. And in fine dining, making sure customers choose your brand comes down to delivering a personalized experience. In the words of the experts:

"It’s all about getting them back in, and I think…my husband and I talk about it all the time…it’s about making it personal for the guest." - Stephanie Izard, Girl and the Goat

"Creating regulars…it’s like the lifeblood of the restaurant business." - Tom Colicchio, Craft

"For everybody that you engage with on a nightly basis, and you take those notes and see them pop back up and that’s your opportunity to really get them on the hook for life. It’s those little things, preferences, like do you like Hendrix…those types of things blow my mind when I’m at the restaurant." – Sean Brock, Husk Restaurant

Giving one person the "Hendrix" like personalized experience? No problem. But giving everyone a unique experience? The smart use of data is the only option.

Which brings us back to Jeff and my "foodie" friends. There are two parts to using data in a fine dining context: (1) collecting the data and (2) taking action according to that information. My friends could have brought thousands of bottles of wine to dinner, but we would have been up the proverbial creek without Jeff's opener. Restaurants can collect as much information as they want about customers – but success will only come to those who can also take action (in fact, data without action isn't just useless, it's harmful – costs pile up, marketing campaigns become imprecise, and customer service suffers).

Fortunately, fine dining brands need to follow only two best practices to make sure they have actionable data: 

  1. Map data to customers, NOT 3rd party systems
  2. Tie data to results, NOT products

Fine Dining Restaurants Need To Map Marketing Data Needs To Customers, NOT Systems

When looking for ways to collect and use customer data, fine dining brands often rely on 3rd party systems like OpenTable. Let's kick it back to Stephanie.

How do we remember people when they don’t make reservations?” - Stephanie Izard speaking about OpenTable.com

By relying on 3rd party systems like OpenTable, restaurants cannot build proprietary data. Two issues emerge:

  1. Restaurants ignore customers who never use OpenTable – a significant percentage of crucially important patrons.
  2. Restaurants end up building a database of customers more loyal to the 3rd party system than the restaurant itself.

Instead of relying on 3rd party systems (also problematic when they become expensive) restaurants need to map data to their own customers. Card-linked offers technology works particularly well to achieve that end.

With card-linked technology, restaurants stop creating data according to who has made a reservation, and start creating data according to who has made a purchase. Rather than a focal point, reservations become a complementary service, while purchases become the primary goal.

And that's using data smartly. 

Fine Dining Restaurants Need To Tie Marketing Data To Results, NOT Products

Often, you'll see restaurants purchase a data solution and find themselves constantly feeling like they can't get out of the 'discovery' phase. Distilling data into actionable insights seems like an insurmountable challenge.

Invariably, restaurants in this position have access to features where they can communicate with customers based on menu items, menu categories, item codes – everythingIn essence, they have data tied to products. Sure, the restaurant knows every single customer who has bought salmon in the last month, but what does that mean for marketing?

Not much. The analysis required to figure out which products lead to which marketing message will take years – not to mention that fine dining menus, ingredients, and trends change all the time. Whereas tying data to 3rd party systems was Jeff's opener with no wine, tying data to products gives us tons of wine, but no opener. 

Instead, restaurants should to tie data to results. Customer visit frequency and spending changes should dictate the delivery of marketing communication (see "Winback" for one example of this approach in action). With data tied to results, visits per month and dollars per visit become the primary goal, not whether a customer drinks red or white wine. 

And that's using data smartly. 

The Future Of Marketing Data For Fine Dining Restaurants

Today, fine dining brands need data and the ability to take action from that data. In the future, this truth will only become more important. As brands open more locations and experiment with new concepts, data becomes the only way to create a scalable business.

Fortunately, the technology exists to make sure data collection never interrupts service and incentives never cheapen overall brand. For those fine dining brands that use data smartly, the future indeed looks very bright.

 

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