Here’s the thing. You’re in the hospitality business, so the very definition of your job is customer relationship management (CRM). Your job is to make people happy and ensure they come back for more.
In the old days, your CRM was your cashier or Maitre D’ – the person who actually engaged with your customer. If they could recognize the names and faces of regulars, then great; in the absence of that, the emphasis was just on providing a quality service.
But everything’s changing now.
Between delivery and digital ordering, guests now engage with your brand without ever setting foot in your store. The business is going digital, and your approach to hospitality needs to go with it.
That’s where a restaurant CRM comes in.
Every digital channel spins off valuable customer data. A restaurant CRM is the platform that automatically consolidates data across these channels – delivery, loyalty, cloud POS, in-store wifi, etc. – to give you a unified view of your guests.
The reason for aggregating this data can’t be underestimated – it underpins every key metric critical to your front of house operations:
Personally, I am a huge data nerd. Just looking at these stats in the Bikky dashboard gets me excited.
But I’m the exception when it comes to this stuff, so here are some critical business questions you can answer with a restaurant CRM:
A real restaurant CRM is more than an subscriber list of folks ready to receive ill-targeted spray-and-pray promotional emails.
It’s the brain of the organization. It automatically ingests and organizes the customer data behind every transaction, and unlocks the meaning behind that data. It’s signal from the noise.
You can tell from the questions answered above that a restaurant CRM serves two key purposes:
The user of the restaurant CRM then has to be the team that ultimately owns the customer data and engagement strategy. Most obviously, this responsibility falls on the marketing team. It’s their job to find new and interesting ways to continue building your brand, and reinforcing their capabilities with a healthy-dose of data can further unlock their marketing superpowers.
At Bikky, we work with brands with anywhere from 5 to 50+ locations. One thing that’s common across most of them (there are a couple of rare exceptions), is that the marketing team takes ownership of the product as well the subsequent ROI it generates.
Another team that we’ve seen add material value to the discussion around vetting, rolling out, and using a restaurant CRM is your brand’s software engineers. At the end of the day, we are helping you work better with the data that’s already flowing through your organization. Involving your tech team in how a restaurant CRM is implemented, and ultimately works with your existing high-value tech investments (POS, delivery, loyalty, etc.) is a critical part of the process.
You might be thinking: “I’m a smaller brand. I don’t have engineers, and I don’t really have a full-blown marketing team with a CMO or VP of Marketing or whatever.”
This is where things get a little more nuanced. While a restaurant CRM may be an automatic fit with a larger brand, the questions you need to ask at a smaller scale are more existential:
We’ve found that brands who affirmatively answer most of these questions can benefit from a restaurant CRM. And if you can’t, that just means you narrowed you have a checklist handy to determine when you’re ready).
We mentioned in an earlier post that the best brands live and die by return on investment (ROI). For a restaurant CRM, there’s both a “soft” ROI (i.e. it makes you smarter and your life easier, but it’s hard to assign a dollar value) and a “hard” ROI (you can assign a precise dollar impact to your new data + marketing initiatives).
As mentioned earlier, typical restaurant marketing strategies rely on a spray-and-pray approach, i.e. blasting everyone the same discount regardless of order activity. Here’s a look at my email inbox over a ~30 day period:
You can tell there’s nothing differentiated about any of these messages. There’s no care taken with respect to whether or not I’m a regular customer. Instead, they all appeal to the lowest common denominator – my wallet.
But with a restaurant CRM, you can start to move beyond this more archaic marketing tactic. Instead, you get a unified view of the guest across your various ordering channels, and can start to get a deeper understanding of their behavior:
So a better way to think about the soft ROI on a restaurant CRM is that it reduces your opportunity cost of pursuing a spray and pray strategy. It opens up the opportunity to communicate with guests based on actual behavior, instead of a one-size-fits-all approach.
The best way to understand the hard ROI of moving to a full-blown restaurant CRM is to look at the hard ROI of your current discount-based campaigns. As a starting point, pick out the headline stats from your loyalty platform.
Here’s a quick analysis from some of the QSR / fast casual brands we work with:
The conversion rate of ~11% gives the impression that these campaigns perform reasonably. But the most important stats here are on the far right – net revenue per customer and (of course) ROI.
Net revenue per customer of only $0.66 means you’re only earning $660 for every 1,000 customers you target. And with an ROI of only 1.5x, you’re barely making back the the initial discount you’re offering.
This is the catch-22 of impersonal spray-and-pray promotions: you could try to boost ROI by reducing the discount, but it might just be offset by a lower win-back rate.
From a hard ROI standpoint, a restaurant CRM can proactively identify which specific guests need a discount, preventing you from leaving money on the table and boosting ROI.
Picking the right restaurant CRM obviously depends on the needs of your business. Below is a (non-exhaustive) overview of what’s currently out there:
The most well-known restaurant app builder around now bills itself as “Grubhub’s development shop.” Their tech underpins some of the biggest brands in the business, and they offer a range of flexibility with respect to how you want to implement your own loyalty platform. You can outsource full app development to them (like most brands), or customize everything yourself on top of their payments + CRM infrastructure (like sweetgreen and a few others).
Guest coverage: 5-25%
Thanx moved into omni-channel territory with its integration with Olo. By linking your native delivery platform with your app / loyalty program, Thanx ensures you can deliver a consistent digital experience to your guests regardless of their ordering channel. On top of this, they’ve layered in some sophisticated marketing automation. With a few clicks, you can quickly run campaigns that change guest behavior (like shifting day-parts or pushing higher margin items) or further reward your highest frequency customers.
Guest coverage: 5-25%
The fast-growing leader in the restaurant cloud POS landscape. Definitely advanced functionality when it comes to running your operations, but less robust when it comes to online ordering tech, collecting guest, and enabling restaurants to actually understand and use that data.
Guest coverage: varies
The OG of cloud POS. Square got the jump on everyone when it started unobtrusively building a customer database with every credit card swipe + email or SMS receipt. They’ve since enabled merchants to easily tap into this data with pretty straightforward marketing and loyalty tools that are also low-friction for guests.
Guest coverage: 60-80%
It’s our mission to help you use data to build more authentic, profitable relationships with your guests. And unlike the other companies we highlighted previously, we’re truly omni-channel, aggregating data across first- and third-party sources.
Guest coverage: 50%+
A restaurant CRM automatically consolidates customer data across channels - delivery, loyalty, cloud POS, in-store wifi, etc. - to give you a unified view of your guests. By understanding the entire customer journey, you can build more authentic, profitable relationships with your guests.
By automatically logging customer data across channels, a restaurant CRM reveals every key metric for your front of house operations: who’s ordering, and what, when, where, how much, and how frequently they order. It’s a complete, automated log of every guest’s interaction with your business.
The ability to run targeted, personalized marketing campaigns. Most restaurants are limited to a one-size-fits all approach where they send discounts to everyone, regardless of order history or frequency. A restaurant CRM unlocks greater ROI through a combination of data-driven messaging and discounting.
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