IT’S NOT HOSPITALITY IF IT ISN’T PERSONAL: LEVERAGING LOYALTY TO SHAPE THE FUTURE OF RESTAURANT MARKETING

It’s becoming increasingly difficult to separate technology from the customer experience in today’s fast-paced hospitality scene. Many struggling operators have said “we don’t need technology – we rely on great food and excellent service”. The fact is, this isn’t enough if operators want to stay relevant in a saturated marketplace. These days excellent service starts with technology. Consumers expect it to be part of the occasion and operators who provide that digital dimension will be the ones who come out on top.

Taking the dining experience digital

Competition is now so fierce in our industry, with innovation making the tech route so accessible that the strongest brands are emerging as those who are taking their dining digital. The possibilities technology opens up are vast, which is why we’re seeing more and more operators seeing investment in this area as a necessity.

Far from needing to think of new ways to sell an offer, operators are turning to technology to maximise profits from existing revenue streams - surely the quickest way to boost the bottom line. Key areas for refinement where technology can help include increasing average spend per head, upping the frequency of visits and transactions, reducing the cost of ingredients, ring-fencing labour costs and improving production and delivery efficiencies. Once refined, operators can then look at identifying and winning new customers. The best route to achieving much of this is down the data highway. And the easiest way to get that data is to go mobile.

Keeping up app-earances

Loyalty schemes are nothing new, and all operators should be looking to reward customers for continued loyalty. YouGov has found more than three-quarters of the UK population belong to at least one loyalty scheme but only 25% of those are with restaurant and out of home operators, compared to the sizeable 65% who surrender all their shopping habits to a supermarket.

For hospitality operators, it’s how a loyalty programme is presented that is crucial to winning and retaining a faithful customer base. Hospitality is often about lifestyle and keeping up with the latest consumer trends. Today’s sophisticated loyalty programmes give restaurant customers meaningful offers, designed to fit around their lifestyle, which means the mode of delivery needs to reflect this. Cue the app.

Model behaviour

The customer information and purchasing behaviour that operator apps provide should be the biggest influencer in a brand’s marketing strategy. Consumers are over blanket promotions and one- size-fits-all. Customer fatigue in the face of a barrage of mediocre marketing messages has seen the better brands get personal in their approach. Leveraging the data in loyalty to personalise every experience is the lynchpin in building a unique value proposition for the brand and key to capturing the consumer’s imagination to create sales opportunities.

Starbucks is a leading light in achieving these aims and uses technology as a major sales driver. Its “digital flywheel” incorporates all aspects of a seamless customer experience to drive high levels of engagement, revenue and profit growth utilising its order-ahead, payment and loyalty rewards programmes. Indeed, the order-ahead option contributed 9% of all transactions in 2017, and 30% being paid on the mobile app. The app as a whole accounted for 36% of total revenue in Q3 of the same year. Taco Bell in the US also reports a 30% jump in spend per head on mobile. The technology keeps transactions slick and frees up staff time to make every visit the best it can possibly be for a customer. The icing on the cake is the ability to use the data captured during mobile transactions to personalise promotions to a really granular degree, stirring up even greater interest and increasing sales.

The time is now

The additional bonus of a mobile loyalty app means operators benefit from location-based marketing with truly personalised push notifications sent straight to the customer’s screen to let them know for example that their favourite coffee shop is nearby and, for the next two hours, there’s an offer on their regular drink with an accompanying item they know the customer often chooses. App-based programmes also put the A-board in the customer’s pocket: algorithms that link a smartphone’s location to the local weather report, for example, enable operators to push offers to customers of a cold drink on a hot day or a cosy coffee if it’s freezing where they are. This is priceless personalisation with instant results. Investing in digital platforms that allow geo-targeting in this way is transforming the marketing landscape for savvy operators.

The combination of a physical presence and a digital layer makes brands almost irresistible. The right loyalty app offers deep customer engagement to trigger orders and generate data, all in one place for both consumer and operator. Additionally, artificial intelligence and the use of the big data these schemes collect are the immediate future for success as a hospitality operator.

The data can also be used to reimagine email marketing. Once a laborious process, technology now enables operators to automatically create hundreds of thousands of personalised email variants every week. In another example of how it’s harnessing customer data, Starbucks recently began offering real-time email offers - so highly personalised as to be almost unique. Far from the e-marketing backlash seen in the last few years, this newly intimate approach saw response rates increase three-fold.

Domino’s has famously become one of the biggest players on the digital field, and is a big advocate of personalised marketing, citing the ability not only to send the right promotions to the right household at the right time, but to direct offers to the person the company knows is the one who usually reacts and all via numerous channels, such as Apple TV, Google Home, Amazon Echo, SMS and smartwatches to name just a few. Its digital disruption of such an old-school service as pizza delivery saw online sales jump 17 percent by the end of 2017 in the UK alone and by July 2018, digital requests were making up 80 percent of total orders.

So transformational has Domino’s digital investment been, the company’s ambition is described as being not a pizza business that uses technology but “a tech company that happens to sell pizza”. These sound like bold claims for a retailer but it’s happening and other brands, big and small, can emulate this digital success using apps designed and branded specifically for their business. The key for operators is to slot in all the pieces of the personalisation puzzle to create a lifestyle enhancement customers can’t do without. Operators need to remember, an experience lives much longer in the memory than a discount, so the secret is to ensure their chosen mobile loyalty scheme does indeed enrich and personalise the experience for customers.

WHAT’S THE REAL COST OF LABOUR IN HOSPITALITY?

The UK hospitality industry is facing pressure from all sides, what with increases in business rates, rents, price inflation on produce and increases in labour costs. So, how as an industry do we decrease the biggest cost of all – labour, without cutting back on customer service?

Do we need to be returning to an era of self-service?

Today, we live in a world where consumers need everything instantly and with no hassle. Because of this, there is a steady increase in the use of mobile payments apps which allow customers to control orders and payments from start to finish.

Labour costs are the most expensive component of the hospitality industry, in order to reduce these costs, operators are having to turn to technology - whether in the extreme form of robot chefs, or by removing team members from the bar or table service, replacing them instead with kiosk screens, or putting the power of payments directly into the hands of customers through their phones.

Operators need to look at what technology they can implement to help deliver service, ordering and payments more efficiently, whilst reducing labour costs. An obvious step is through customer mobile transactions. Ideally an operator would be on key aggregator apps such as UberEats and Deliveroo that can drive revenue for home delivery but also have own branded solutions to personalise the customer experience, which will drive in store transactions, higher average spends and optimise labour efficiency.

Keep it quick, keep it simple

The two most important functions of the payment or ordering process is that it is fast and simple. Let the customer pay easily and be rewarded for the continual investment to your brand. Implementing alternative payment methods such as mobile payments or order at table can improve operational efficiencies and the overall customer experience.

Keeping customers happy with less staff?

Operators shouldn’t be implementing any cost saving strategies at the expense of the customer and technology shouldn’t come into play unless it enhances the overall customer experience. Mobile payments not only encourage customers to spend more but also plays a huge role in reducing labour costs, whilst improving efficiencies and speed of service.

Implementing order at table via the customers mobile can automate the work of team members, freeing up front-of-house teams to focus on customer satisfaction. The key reasons operators implement this solution is to remove the need for a staff member to take the order, reducing labour costs and to remove lost revenue opportunities whereby the customer is deterred from ordering because the staff member/s are too busy or not to be seen.

Is it time for robot chefs?

Automation and robotics have been present in restaurants for some time now - automating everything from orders and delivery to cooking, rota scheduling and drone deliveries - we’ve seen it all. Whilst robot chefs do already exist and would appear to be the perfect fit particularly in a QSR environment, they won’t work across every style of service. Some customers want an ‘in and out’ style experience such as Nando’s, whilst others are looking for attentive customer service, such as fine dining restaurants or premium casual dining. The trick when it comes to technology, is knowing the balance of what customers want – ultimately, operators need to be looking at what saves them time and money, and implementing pay-at-table mobile payment or ordering apps is a fantastic way to strike this balance.

Loyal buying behaviour!

Loyal buying behaviour!

London’s experimental organic ice cream maker Ruby Violet offers flavours that include premium ingredients, such as pistachios or alcohol - this North London based ice cream parlour is an eccentric find.

Pay with your phone, earn points, and redeem exclusive member deals with the Ruby Violet app. A customer loyalty and rewards program that is long-term and captivates your customers with incentives to have them come back, which will motivate customers to return often -this demonstrates loyal buying behaviour.

LOKE’s successful loyalty and rewards program is able to see a direct return on investment from using the white-label technology developed out of Melbourne, Australia. Ruby Violet wanted to capitalise their business by enhancing customer experience. A loyalty and rewards program is important for business success, that is because they are becoming increasingly popular. Loyalty and reward programs captivate current customers to remain engaged and spend more money at your business.

Many merchants try to captivate new customers but what really works is engaging with your current customers through our loyalty and rewards program which costs less for your business in the future.

Written by Sonita Asahak