With Covid cases rising across the US, it’s clear that many restaurants will face another round of dining room closures. During the summer months, restaurants found new ways to expand offerings, like outdoor seating and contactless dining; but colder weather will render outdoor seating impossible across much of the country. Even in warmer climates, on-premises dining may be prohibited as the nation weathers a second wave of infections.
Since the pandemic truly took hold in March, our clients have been trying out new ideas and learning how to transform their businesses to handle the next wave. The restaurant industry has a huge impact on employment in the US. In New York City alone, the introduction of outdoor dining added as many as 83,000 jobs after the initial layoffs in April. The threat of these jobs going away again will have a huge impact on restaurants and employees in the near-term.
Here are 5 things we learned about how to retain business during a slowdown in on-premises dining:
1. Getting the basics right
While many of our clients have executed some amazingly creative ideas within their loyalty programs, the first step is simple: get the little things right. Using the loyalty communications channels is a key part of this, because it maintains the relationship between guests and brands, even during difficult times.
What we learned: Communications about things like cleanliness, sanitation, and changes in store hours are essential, so it is important that your team can update this information in real-time. People want to feel safe and confident that when they place an order they’ll receive their meal from a place that is safe and clean. Employees should also be able to service customers quickly and efficiently, especially when it comes to looking up a web order or providing updates about the value in their rewards account.
2. Managing the shift to e-commerce
It’s hard to remember back to early 2020, but back then online ordering and off–premises dining made up a small fraction of orders for most restaurants. Today, online orders account for the bulk of restaurant transactions. That shift came fast and forced guests to learn new habits. The good news is that customers are now used to placing their orders digitally, either through a website or a mobile phone, and then taking those orders off–premises, either through pickup or delivery.
What we learned: People will order online, but they want a good customer experience, even if that’s through their mobile phone. In fact, a Deloitte survey found that 70% of respondents want to order digitally when it comes to delivery. Our customers find that their menus need to be both inviting and updated with the latest information. It also means providing good two-way communications so guests know the status of their order at any moment.
It’s also important to think ahead. While today’s guests may be coming in for an on-premises experience, don’t wait until you’re forced to shutdown to convert those guests over to your digital channels. Use your loyalty program to offer incentives to use the online channel. The earlier they download your app or visit your website to place an order, the easier it’ll be to shift them to that channel when you need it most.
3. Acquiring customers using all channels
Brand loyalty is under attack. When the pandemic started and our lives were thrown upside down, everything about our living patterns changed including the brands that we used every day. While for many this is a huge challenge, it also represents a major opportunity to bring in new customers.
Today you need to meet customers where they are, which is increasingly at home and through digital channels. This means a whole new method of customer acquisition in which the third-
party aggregators, like Door Dash, GrubHub, and Uber Eats can play a key role. The key, however, is to turn those customers over from their platforms to yours as fast as possible. The Deloitte survey mentioned above also found that 57% of those surveyed had downloaded a third-party delivery app.
One survey of restaurant operators and managers noted that 37.5% of them credited third-party apps with keeping them afloat during the dark times. But that comes at a cost: 38.5% said they received a negative review because of an issue with a third-party provider.
What we learned: Our customers found that they needed their own order and delivery infrastructure in place, even as some customers came in through third parties. A key part of their program involved converting customers over either through incentives placed in the packaging or by keeping some signature menu items off of third-party sites. This requires a good relationship with those third parties and a good understanding of where they fit into your overall customer program.
The apps don’t offer the only method for customer acquisition. Many of our customers turned to gift cards and their own employees to fill this gap. By rewarding employees with a pair of gift cards, one for them and one for a friend, restaurants can create a viral program that will bring in new customers.
4. Driving individual action through artificial intelligence
Each customer is their own person, so it’s important to treat them that way. This is true not only for when they come in to place an order, but when you send them an offer or communicate through email. The only way to do this is to break them into segments, with each scored according to their actions.
What we learned: Here at Paytronix, we use Artificial Intelligence to drive Individual Action (AI to IA sm). By using AI to understand individual behavior, our customers can create campaigns that are far more effective. A well-known brand working with the Paytronix Loyalty Platform used segmentation to sort its customers by average check size then used incentives to reach a slightly higher check size. The result was an increase in average check size overall and tens of thousands of dollars in incremental sales.
One of the most important scores in the platform is the “missed visit score.” This enables us to see when someone missed a visit based on their own personal cadence. Our customers then target those guests with “we miss you” campaigns and offers at the right time. While one customer may need it after missing a visit or two in a week, another may not be off cadence until they’ve been gone for a month. One brand that used this kind of campaign to engage lapsed customers saw a 37% lift in visits and a 28% lift in spend from the targeted customers.
5. Meeting customers where they are
For many of our customers, email remains king with the bulk of their communications delivered through this primary channel. But as time has gone on, many of their guests displayed a preference for things like SMS or push messages. What’s more, their entire lives have changed and messaging patterns are now entirely different.
What we learned: Our customers adjusted their messages to better match both the channel and the situation. This means adjustments to things like messaging cadence to better take advantage of the new channels, without overburdening them. When it comes to guests, it means creating offers that match how they live and work today. This is why a coffee customer shifted to focus more on offering beans, or why a national restaurant offers more grocery items and meal kits.