The customer data platform built exclusively for multi-unit restaurants.
In the ultra-competitive restaurant industry, attracting new guests is only half the battle. The key to sustainable success lies in mastering the art of guest retention and building a loyal, repeat customer base. According to Bikky’s internal research team, repeat guests account for roughly 20% of a brand’s guest-base on average, but can contribute anywhere from 50% to 80% of total revenue. This is why increasing guest frequency and reducing churn is a top priority for all restaurant brands—but it’s easier said than done.
Every guest is unique, with their own dining habits and visit frequency—so how can restaurants accurately gauge and understand these relationships? It can be challenging to understand when a guest has actually churned versus when they’re at risk of churning. Brands also struggle to identify the right time to reach out before they lose a guest or when to deploy re-engagement efforts.
Restaurants often rely on industry benchmarks to contextualize and better understand their churn rates. For example, the industry rule of thumb when it comes to churned guests is to wait a full 90 days before re-engaging. Brands may also calculate the average churn rate for their guests and apply across the board, automatically labelling anyone who’s been inactive for a certain number of days as churned. This blanket approach can be oversimplified, failing to account for individual guests in the context of their particular behavior. Engagement efforts are more likely to be poorly timed, impersonal, and ineffective.
In 2024, the restaurant industry saw a rise in hyper-personalization and the trend doesn’t show any signs of slowing down. QSR Magazine recently reported that guests clearly seek brands that recognize and serve their individual needs as they decide where to spend their dollars. And according to McKinsey and Co., brands that excel at personalization generate 40 percent more revenue from their efforts than average players.
Restaurants that can engage their guests on a one-to-one basis will have a much higher chance of attracting and retaining loyal guests, and reducing their churn rates. However, this requires a deep understanding of unique guest lifecycles and behavior. Fortunately, tools like restaurant CDPs offer brands a complete and detailed view of their guests’ journey from new or loyal to late or churned, tracking the average time between visits, plus when, where, what, and how they order.
In this article we’ll explore how guest insights can help brands identify the factors that lead to churn and craft personalized engagement strategies that foster long-lasting relationships.
Turning a one-time guest into a regular requires more than great food and service. Guests need intentional communication at every stage of their journey and memorable, meaningful, interactions tailored to individual preferences. This relies on a granular understanding of individual guest lifecycles, preferences, and more. While more brands are getting serious about guest data, many still rely on industry benchmarks to categorize and communicate with their guests. Standard guest engagement looks something like this: label a guest as churned after 30, 60 or 90 days of inactivity, and then send an offer to re-engage and entice them to return. These industry standards don’t account for unique behavior or map true guest frequency, which can damage both engagement efforts and a restaurant’s bottom line.
Generic messaging doesn’t resonate
By broadly categorizing their guests, brands frequently miscalculate where guests fall in their journey. When they reach out with emails, texts, or through their loyalty app, the message doesn’t always match the guest. Sending a standard win-back offer to guests at various points on their journey is unlikely to come across as intentional or memorable, and even less likely to keep guests coming back.
Consider two hypothetical customers at a restaurant that automatically labels guests as churned after 30 days. If guest number one dines approximately every 25 days and misses their monthly visit, a re-engagement campaign would most likely be effective. If guest number two typically orders every week, waiting until they’ve been inactive for 30 days is far too long. The chances of winning them back are much smaller than if they’d been engaged at an appropriate time for their unique lifecycle, and with a personalized message.
Mislabelling guests can be costly
Sending the wrong message at the wrong time may cost restaurants more than their relationships. When guests are mislabelled, restaurants often waste money offering unnecessary promotions. Through Bikky, a multi-unit fast casual brand learned that 35% to 45% of their loyalty program guests ordered regularly, but not always through their loyalty app. This resulted in hundreds of thousands of guests being mislabeled as churned and receiving win-back offers, despite being active visitors who would have ordered without the incentive.
Additionally, guest acquisition or re-acquisition is always pricier than retaining loyal guests. Because industry-standard practice is to re-engage after a guest is fully churned, restaurants have to invest time and money in win-back strategies rather than shifting guests who are still engaged. And without individual guest data, their re-engagement campaigns may not be overly effective. Generic or poorly timed engagement is less likely to drive repeat visits, creating the need to acquire new guests, which can get expensive.
Restaurant CDPs offer brands a fundamentally different way to look at their business. By capturing the habits and lifecycles of individual guests, restaurants can develop strategies specific to their needs rather than rely on industry standards. Bikky helps restaurants track and segment their guests in several ways.
Identify unique behaviors
From a guest’s first order, Bikky begins building a comprehensive guest profile which tracks everything from items ordered, frequency, average order size, typical daypart, and more. After a second order, Bikky tracks average time between orders which gives brands a basic sense of a guest’s behavior. Once a guest places their first few orders, Bikky recognizes and flags the guests' typical frequency as daily, weekly, monthly, and so on. Brands can then segment, track, and communicate with them accordingly– understanding whether they have churned based on their previous behavior, rather than generic benchmarks.
This one-to-one understanding of guest behavior unlocks a brand’s ability to build personal, timely, memorable experiences that keep people coming back.
Categorize guests with precision
With a highly detailed view of guest behavior, brands aren’t limited to broad, time-based categories that only sometimes line up with guests’ routines. With Bikky, restaurants can target guests at multiple stages in their journey, not just when they’re engaged or churned. For example, a Bikky-specific feature flags guests as “late”, which means they’ve missed an order in their typical frequency but they’re not yet churned. This flag gives brands the opportunity to engage guests before they churn, increasing the likelihood that they remain engaged and reducing their overall churn rate.
A full-service brand recently partnered with Bikky and found significant value in understanding the unique lifecycle of their guests rather than relying on industry benchmarks. Bikky revealed that guests who dined at least once a month accounted for 35% of their revenue, despite being only 5% of their total base. Like many brands, the restaurant had been following the industry rule of thumb and waiting 90 days to re-engage lapsed guests. Given the value of monthly regulars, waiting 90 days to check in was far too long.
With these insights, the brand made significant improvements to their engagement strategy, reaching out to monthly guests as soon as they were flagged as late, not 90 days after inactivity. In just six months, they recouped over 1,000 orders and $40,000 in incremental revenue.
A successful regional brand used data from Bikky to identify a very particular type of guest and tailor communications to their unique circumstances. They noticed that churned guests occasionally returned out of nowhere, without any kind of incentive. Without a CDP like Bikky, these guests would either be treated as new and put in the standard onboarding funnel or not addressed at all. This brand saw an opportunity to create specific a re-onboarding journey to acknowledge these guests, make them feel valued, and ensure they stayed engaged.
Increase personalization
When brands have the tools to account for unique behaviors and map true frequency, they can offer guests the hyper-personalization they crave. A Customer Loyalty Executive Survey from PwC stated that the top reason consumers remained loyal was “an experience that feels personal and created just for them.” If restaurants want to stay competitive and maintain a loyal customer base, they need to be able to engage on a one-to-one basis. Bikky allows for targeting based on menu item preferences, lifecycle stage, frequency, location, and more. 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 go 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 restaurant industry will be defined by those who embrace hyper-personalization and leverage guest insights to build meaningful connections. By focusing on individual experiences and reducing mislabeling of guest behaviors, restaurants can cultivate a loyal customer base that not only returns but advocates for their brand.
With advanced tools such as restaurant CDPs, brands can gain invaluable insights into guest lifecycles, allowing them to craft timely and relevant engagement strategies at critical junctures in their guests’ journey. Engaging with guests before they churn and tailoring communications based on unique habits not only enhances their experience, it can significantly increase retention and ultimately, drive revenue growth.
For brands looking to reduce churn, the road ahead is clear: invest in understanding your guests, nurture individual relationships, communicate with intention, and give them every reason to keep coming back.
Interested in learning more about how Bikky could help your brand understand unique guest lifecycles? Schedule a time to connect with our team.
The customer data platform built exclusively for multi-unit restaurants.