The customer data platform built exclusively for multi-unit restaurants.
In the restaurant industry’s continual competition for customers, offers and promotions are vital tools for driving specific guest behavior. Brands routinely use special offers in an attempt to increase engagement, reward loyalty, attract new guests, or win back those who may have lapsed. But at the end of the day, many operators find it challenging to gauge the effects of their promotions on long-term guest behavior.
To measure performance, brands typically look to loyalty and sales data. While they can measure redemption rates and revenue generated during the promotion, the insights end there. These metrics don’t help brands understand an offer’s impact on guests outside of their order at the time of redemption or give an accurate measurement of a promotion's incrementality.
In addition to difficulties with measurement, engaging guests beyond just handing out discounts is growing harder by the day. A recent Harvard Business Review survey found that the average U.S. consumer participates in approximately 12 loyalty programs at any one time. When consumers are constantly inundated with offers, the only way for restaurants to cut through the noise is with a deep understanding of their guests’ behavior.
Robust guest data makes it possible to craft effective incentives that drive specific behavior and help restaurants increase guest frequency and retention. Fortunately, tools like restaurant CDPs can help brands get to know their customer base and better grasp the impact of their decisions. In this article we’ll explore how guest insights enhance the measurement of offers and promotions, and significantly improve their precision, personalization, and success.
Restaurants invest heavily in regular offers and promotions to stay top of mind with guests and incentivize specific behaviors, but drawing accurate conclusions about their impact can be challenging. Operators often rely on loyalty program data to gauge success, tracking number of redemptions and revenue over the promotional period. This approach to measurement has several limitations and can lead to false positives.
No post-promotion insights
Additionally, loyalty data doesn’t provide any understanding of guest behavior aside from whether an offer was redeemed or not. Without broader guest insights, there’s no simple way to measure real success, like whether or not the offer or promotion drove repeat visits after redemption or changed a guest’s behavior. For instance, after redeeming an offer a guest may return to dine several times afterwards. Was this guest already a frequent diner or were they influenced by the offer? If a promotion was designed to engage lapsed guests, did they return after redeeming or did they just take advantage of a one-time discount? Loyalty data alone can’t answer these questions.
Even if restaurants look beyond their loyalty program for analysis, they’re still limited to measuring sales data before, during, and after the offer or promotion. Optimizing the measurement and performance of offers and promotions relies on a long-term view of guests.
A biased view of your guests
When restaurants measure offers and promotions at the individual level within a loyalty program, their insights are restricted to loyalty guests. This creates a skewed picture of overall guest behavior. Brands are not only analyzing a limited sample size and setting, loyalty guests typically exhibit different purchasing behaviors than non-loyalty guests. Loyalty program insights won’t necessarily apply to a restaurant’s broader customer base.
Loyalty programs typically track only the orders placed through their app, meaning brands might lack a complete view of their loyal guests. Orders made without signing in often go untracked, leaving gaps in the data. This means restaurants may be wasting money sending discounts to active guests who only appear lapsed due to limited data. Additionally, when guests don’t use their loyalty app for every purchase, brands are potentially missing the true effectiveness of their campaigns.
With Bikky, a multi-unit fast casual brand learned that 35% to 45% of their loyalty program guests order regularly, but without using their loyalty app. The gap amounted to hundreds of thousands of guests receiving lapsed guest offers, despite still being active visitors. With this insight, the brand started targeting guests who were actually lapsed, improving the efficiency of their promotional spend conversion rates. And because Bikky tracks orders across all platforms, the brand could accurately assess post-promotional behavior and the impact of their campaigns.
It’s not the loyalty data itself that’s hindering offers and promotions, it’s that more comprehensive tools are needed to use the data effectively. Restaurant CDPs like Bikky can take the data from loyalty programs and other platforms, go beyond traditional success metrics, and pinpoint exactly how offers and promotions impact guest behavior—even outside of the promotional period, and for both redeeming and non-redeeming diners.
With this higher level of analysis, restaurants can learn more about their guests with each offer and promotion, increasing personalization and success over time. Leveraging a restaurant CDP for building and measuring offers has two core benefits.
Precise measurement
Bikky offers detailed metrics, flexible segmentation, and advanced data analysis that allow restaurants more nuance in how they measure success. Unlike other platforms, Bikky captures all of a guest’s orders before and after they’re issued an offer, and differentiates between those who redeemed and those who did not. This simple side by side comparison allows restaurants to account for the difference in long-term spend between redeeming and non-redeeming guests to understand the true incrementality of their promotion.
With Bikky, restaurants can further segment redeeming and non-redeeming guests to track the long-term behavior of new versus existing guests, lapsed versus engaged guests, and more. This provides answers to critical questions about post-redemption engagement such as:
This analysis also helps restaurants determine whether the offer itself had an impact on guest behavior or if the changes were due to other factors. Consider a brand with smoothies on their menu where buying behavior differs because of seasonality—consumers naturally gravitate towards smoothies more in the summer months, with or without a promotion. With Bikky, the restaurant can easily see whether those that redeemed the offer spent more than those that didn’t, avoiding a false positive.
Precision of measurement also means restaurants can set distinct goals for their offers and promotions, like acquiring weekly guests, and learn the optimal structure, timing, and investment to reach their goals. Through constant experimentation and careful measurement with Bikky, Avo has onboarding offers down to a fine science. They’ve learned the number and frequency of offers most likely to create loyal, engaged guests. Plus, they’re comfortable discounting initial orders knowing the lifetime value of repeat guests is five times more valuable.
Advanced personalization
Along with a thorough understanding of guest preferences and behaviors, and precise measurement, Bikky’s robust segmentation capabilities enable hyper-relevant offers and promotions. The platform allows for segmentation based on menu item preferences, lifecycle stage, frequency, location, and more. Restaurants can make sure the right people are receiving the right offers and promotions, tailor their strategies more effectively, and maximize ROI every step of the way.
Personalization is also known to boost redemption rates and the success of offers and promotions. In a McKinsey study on personalization, research found that companies who excel at personalization generate 40 percent more revenue on their offers and promotions than less-targeted competitors. Protein Bar and Kitchen recently used Bikky to segment offers by menu item. Rather than a generic percentage off the menu, they created offers specific to guests who frequently ordered entrees versus shakes. After personalizing their offers, they saw redemption rates jump from 5% to 15%.
Protein Bar and Kitchen is now exploring whether there’s a difference between other order types. Do people who order salads order drinks more often? Are bowl orders more or less frequent than others? With Bikky, they’ll continue diving into guests preferences to optimize their offers and promotions, and by extension, guest retention, frequency, and menu mix.
The success and continued improvement of offers and promotions lies in a nuanced understanding of guest behavior, and precise measurement and personalization. By embracing the tools that enable this level of analysis, like restaurant CDPs, brands can enhance the effectiveness of their promotional strategies and build lasting relationships with their guests.
Looking ahead, the integration of advanced analytics and segmentation tools will be crucial for restaurants aiming to refine their promotional strategies and stand out in a crowded and competitive market. Restaurants that can see beyond loyalty data, and learn from guest interactions and preferences will drive success with offers that not only meet short-term sales goals, but cultivate long-term loyalty and yield meaningful, sustainable results.
Interested in learning more about how Bikky could help your brand elevate offers and promotions? Schedule a time to connect with our team.
The customer data platform built exclusively for multi-unit restaurants.