Data Wisdom

Understanding customer data and taking it to the next level -- where a business can utilize the data to its advantage -- is an essential part of today's operations. Customers have myriad choices. As such, businesses must break into customers' mindsets to ensure they keep coming back. Operators that can leverage customer data, understand what makes them tick, and develop reward structures based on it, can be more productive.

Everyone preaches about the power of data. However, to make data useful you must know your source. When people interact and share data you must examine their mindset. For example, when a consumer receives a call from a telemarketer at his or her home during the dinner hour, responses are often influenced by mindset: "This is an inconvenient time to be calling," he or she may be thinking. However, if a customer leaves a restaurant after a good meal, with a guest satisfaction survey in hand -- complete with an incentive to fill it out -- he or she will have a significantly different motivation when responding.

For example, Darden Restaurants, a casual dining restaurant company with brands including Red Lobster, Olive Garden, Smoky Bones, Bahama Breeze and Seasons 52, uses various sources to obtain data. The company approaches its customers for online, in-restaurant and via phone surveys. Darden also performs customer audits and polling. The company captures information on household size, income, age, phone, etc. It then leverages that data into wisdom.

Understanding the customer and making use of this newfound wisdom is a sensory process. Businesses must ask the questions: What are customers here for? What motivates them? This type of data can help businesses anticipate needs ahead of time and be prepared to satisfy guests in advance. Coupons, for example, while a great short term driving tactic, don't make the customer feel special. At the end of the day, an operator is better served to make its customers feel special with personalized products, services and genuine hospitality.

One important and yet infinitely simple part of an e-mail marketing program or voice response survey is to say thank you. The operator should say thank you for visiting the store, thank you for reserving the table, etc. Then take it one step further: say thank you, offer personalized incentives and elicit feedback.

Operators should take the time on the front end to collect the right data and know the source to make the most of it. Finally, it is essential to activate the data. Having knowledge is the first step, but what a business does with that knowledge is the real differentiator. Data says that the sun sets at 6:30 p.m. Take action on that knowledge: look at the position of the sun and determine what direction to travel to get out of the woods. Don't get stuck in the woods. Put data riches together to make valid assumptions to run the business and understand what your consumers are looking for.

Michael Friedman is the director of interactive marketing services at Darden Restaurants. This column was adapted from his address at the POS Summit held in June 2006.