The companies in America that are best at using customer data to predict behavior are retailers, not restaurants, Scott Shaw, restaurateur and chief executive of Alexandria, Va.-based Fishbowl, told executives during an innovation forum at the 2014 Restaurant Leadership Conference.
Zappos and Amazon, Hilton and Harrah’s, Gap and Old Navy—what makes these companies different, Shaw says, is that they have successfully married marketing and finance. They know who their customers are, and they track their behavior; they use data to drive results, and they use financial models to manage their marketing. Instead of customer counts and same-store sales, they look at moving the needle on metrics such as pay per spend and time between visits. “The result is that marketing becomes quantitative—and predictable.”
Restaurants can do this, says Shaw, a former multi-unit operator who now owns a single restaurant in Orlando, Fla., though they have a disadvantage because they generally don’t know who most of their guests are. Buffalo Wings & Rings’ Executive Vice President of Development Philip Schram spoke to the group about his company’s strategy to use data to improve engagement in its loyalty club, Club ‘84. “We have always been focused on who our customer is,” he says. “We collect a lot of data.”
To build enrollment and engagement in the program, Buffalo Wings & Rings took several steps—but one step was possibly simplest: retargeting loyalty messages to nudge engagement from those customers who hadn’t responded to previous offers. “It’s very powerful,” says Shaw. Looking at data, and based on a customer’s behavior, going back to that person again can bump the response to a promotion, say, from 4 or 5 percent to 7 or 8 percent, Shaw says. If someone didn’t redeem a birthday offer, for example, going back to them with a message saying, “You have three days left to redeem your birthday offer,” can be all that it takes. “It’s not about doing more offers,” Shaw says. “It’s about getting more out of the promotions you’re doing.”