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WTF is a restaurant CRM?

customer service + restaurant CRM in action

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:

  • Who’s ordering (guest details + contact info)
  • What they order (menu items)
  • Where they order (particular locations)
  • When they order (day-part)
  • How they order (through which channel – delivery, in-store, or both)
  • The amount they order (average order value)
  • How frequently they order
  • When they last ordered

How to use a restaurant CRM

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:

  • Retention / customer lifetime value:
    • What % of customers come back 1, 2, 3, 4 (etc) months after downloading my loyalty app?
    • Which customers are both on my loyalty platform and also order delivery (either 3p or 1p)?
    • Who are highly active guests from a year ago that are now lapsed?
  • Profitability:
    • How do I convert third-party delivery customers to first-party?
    • Who’s ordered on both 3p delivery and 1p delivery? How do I keep them on my native platform?
    • Can I target delivery customers to come in store? What’s the ROI on my advertising spend to do this?
  • Personalization:
    • Who are the vegetarians in my customer base? How do I personalize messaging to them?
    • How can I identify really big spenders (>$200) so I can have my catering team build more direct (and profitable) relationship
    • Can I identify and reward my top 10% of customers over a given month / quarter / year?
  • Marketing ROI:
    • What’s the ROI on my social media spending?
    • How do I calculate customer lifetime value (LTV) for in-store customers? What about delivery customers?

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.


Who on your team uses it?

You can tell from the questions answered above that a restaurant CRM serves two key purposes:

  • get clean, reliable data on your guests
  • better engage guests to build more authentic, profitable relationships

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.

a real-life look at the marketing + tech teams collaborating

A quick caveat for smaller brands

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:

  • do you inherently believe that customer data is a priority for your business (it’s the trend now for everyone to automatically say “yes”, but I urge you to give this deep thought)
  • if it’s a priority, are you ready to scale your data operations?
  • can it be done in conjunction with your expected store growth?
  • is there bandwidth on your existing operations team to invest some time in preparing / launching campaigns (even just automated ones)?
  • are you planning to hire for your tech or marketing teams in the next 12 months?
  • on marketing, are you ready to expand beyond social media and lightweight email updates?
  • am I making money on my off-premise business, and are the margins good enough right now?
  • do I have enough regulars in my core in-store business to warrant a more sophisticated customer engagement / retention strategy?

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).


What’s the pay-off?

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).

The soft ROI

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 hard ROI

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.


What’s a good restaurant CRM?

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:

LevelUp

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%
    • Core loyalty program functionality + some Grubhub marketplace data depending on your pricing tier
  • Pros
    • Full access to guest data
    • Easy-to-use campaign triggers and segmentation
    • One login for your guests – if they already have other LevelUp apps, then it’s pretty low friction for them to sign up and join your program
    • Guests can now enroll in your rewards program as well through the Grubhub marketplace
  • Cons
    • Out of the box analytics aren’t too helpful – you have to be an excel wiz to export the data and figure out core metrics like retention and churn on your own
    • All of their campaigns usually involve discounting, lowering ROI
    • May not be a fit for brands with < 20 locations (we’ve heard recently that they charge you a flat fixed amount up until you pass this threshold).
    • Marketing variables only include loyalty status, frequency, and last order date. No real way to communicate with the guest based on their actual preferences.

Thanx

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%
    • Can be higher with strong Olo business + integration
  • Pros
    • Full access to guest data
    • Easily launch sophisticated campaigns that measure results in real dollars
    • Perfect for smaller brands that want to offer loyalty / rewards but don’t want to build and market their own app
  • Cons
    • Only covers first-party data
    • If you already have another loyalty platform (like LevelUp), you’ll need to migrate all your customers to their app, or the one they build for you
    • Depending on your tech stack, you may need to sign up with Olo as well so that Thanx orders get pushed to your POS
    • Engagement primarily involves discounting, lowering ROI

Toast

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
    • Minimal in fast-casual, since most brands don’t give guests the opportunity to input their info for a receipt
    • Toast Go handheld POS though makes it easier in casual dining. Ticket sizes are larger, and everything is done table-side, making data collection a part of the payment process
  • Pros
    • Since all the data is in your POS, it’s significantly easier to match contact info with order history, enabling greater personalization
    • Simple, intuitive UX for online ordering eliminates can save you the cost of another vendor
  • Cons
    • You have to pull the data all manually
    • You have to put it into excel to figure out what to do with it
    • It’s a POS company – do you really want them to control + keep all your customer data?

Square

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%
    • They’ve got a lock on helping you engage your in-store customers, but no real visibility on delivery or third-party guests
  • Pros
    • Easily covers the majority of your customer base
    • Email campaigns are simple and results are easy to track since they measure ROI with every card swipe
    • Frictionless loyalty experience – they already have the customer’s contact + payment info, just need them to opt-in on the POS after a transaction
  • Cons
    • You don’t really own the data. Want to export a list of your Square customers so you can send special announcements / seasonal updates? Well…you can’t. Square deems that data proprietary.
    • POS isn’t really built for multi-unit / sophisticated restaurant operations (outside of the coffee or more traditional retail verticals)
    • Campaigns are pretty basic and discount-based
    • The company overall looks like it’s shifting gears towards payments / financial technology, likely limiting future investment in marketing and CRM features

Bikky 👋

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%+
    • Variance depends on how much of your business is digital (delivery + loyalty / order ahead) and how much guest data you collect through your POS
  • Pros
    • Consolidated data platform behind all your existing consumer-facing channels
    • Sophisticated out-of-the-box marketing campaigns that automate engagement fo new and lapsed guests and deliver material ROI
  • Cons
    • Works best if you have both third-party and first-party channels
    • Works best if you have a marketing or operations team with enough bandwidth to actually invest in customer data + engagement

Hit the button below to give us some info about you and your brand, and we’ll get working on data-driven engagement and boosting ROI.

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General FAQ

What is a restaurant CRM?

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.

What does a restaurant CRM do?

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.

What are the benefits of a restaurant CRM?

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.