"Consumer engagement" has become an all-encompassing term in the restaurant business; all brands want to engage with their customers, but doing so in a modern environment is an ever-evolving challenge.
To gather and share some insights and best practices on how to reach consumers, industry leaders gathered in Scottsdale, Ariz., this week for the Restaurant Leadership Conference, hosted by Restaurant Business' parent company, Winsight Media. Operators, researchers and more drilled down on the topic of engagement. Here are some of their learnings.
1. Convenience costs are OK
At this point, 42% of consumers say they are fine with paying more for delivery orders, knowing that restaurants have to pay up to 30% overhead of the cost of the order for third-party delivery services, said Patrick Noone, EVP of Technomic. What they aren’t willing to pay for—higher labor costs. More than half of consumers think restaurant employees should be making more, but only 27% are willing to pay more for restaurants to offer higher wages.
2. The Amazon impact
Expectations in the digital age are being driven by outside forces, said Brooks Goldade, head of digital guest experience for Buffalo Wild Wings. “Retail and e-commerce are leading the way in the UX [user experience] purchase model,” he said. And consumers don’t see restaurant e-commerce as being different from sites like Amazon.
But the Amazon effect also provides opportunities for restaurant brands to borrow strategies such as nudging users to complete a purchase, says Jerry Shen, director of digital marketing for Blaze Pizza. When an Amazon customer drops an item in their cart, ads and messages pop up about that item. What if people build a pizza in Blaze’s app, and the restaurant can gently prod the user either to purchase if they haven’t, or to repeat their order, he suggests.
3. Accelerate innovation
Restaurants need to speed up innovation, because what’s innovative now will be an expectation not too far down the line. “You’re not going fast enough,” said Tim Ryan, president of the Culinary Institute of America. In what area will restaurants need to hit the gas next? The customer experience, Ryan predicts. The challenge, he said, will be finding ways to surprise and delight when diners today have so many options.
4. Case study: Reaching users via mobile
Firehouse Subs ran a mobile campaign to win back lapsed users, and it did some A/B testing to figure out what brought diners back in. The chain found it wasn’t about offering deep discounts, said former VP of Marketing Doug Reifschneider. The data showed that Firehouse just had to ping lapsed users to remind them that Firehouse was an option. Franchisees were happy due to the cost savings; they did not have to give food away.
From that test, Firehouse also found that less than half of people with its app have push notifications turned on. So the company had to have an alternative—such as email or SMS texting—to keep the conversation with those diners open.
5. Break the chain mold
According to Yum Brands’ CEO Greg Creed, today’s challenge is to avoid feeling like a big, massive brand. It’s a statement backed up by the numbers. Technomic finds that independent restaurants and emerging regional chains are gaining strength and outperforming the big brands, particularly among younger millennials and Gen Zers.
“How do you make [a chain] feel really small to the customer?” Creed proffered. The answer: by truly understanding culture. Taco Bell, for example, is a cult brand. It’s huge, but customers feel like it’s a culturally relevant brand, he added.
6. The holdup on tablet acceptance
In-store tablets have brought empowerment to the guest in terms of payment, said Goldade of BWW. But there’s still a lot of experimentation to be done on the menu side. Why? “There’s still no consistent model.” Consumers want a standard model for ordering on a tablet that makes it easy to jump from brand to brand seamlessly. “We still have a lot to learn on this,” he said.
7. What’s next? Improved retargeting
“That’s where some data needs to evolve,” said Gail Seanor, senior director of marketing technology for TGI Fridays. With all of the data being collected on diners placing online and mobile orders, operators need to find a way to tease what Seanor calls the “next best option,” not what they’ve already purchased.
Her example: If someone buys a sleeping bag, they shouldn’t be shown more ads on sleeping bags, but instead should be shown a tent. Right now, even the more advanced brands are still trying to resell the sleeping bag.
Some of the more senior members of the team smile at the junior staff who are excited to uncover an interesting trend in “eatertainment” or the latest single-ingredient concept. We try not to be condescending when we suggest they do some research by looking at past issues of Restaurant Business or old Technomic top chain reports before calling it the next big thing.