How First-Party Data Enrichment Supercharges Restaurant Customer Retention
Business conditions for restaurants in recent months have become increasingly complex. According to the National Restaurant Association’s chief economist, Bruce Grindy, December 2021’s poor restaurant sales performance is due to:
- Dampened staffing levels forcing many restaurants to curtail business operations.
- Soaring food costs and supply chain disruptions continuing to create challenges for restaurants.
- The omicron variant reducing customer demand for indoor on-premises dining in recent weeks.
- Cooler weather limiting outdoor dining opportunities in many parts of the country.
So, what does this mean for restaurants?
In 2022, customer retention will be more crucial than ever. Restaurateurs must nail their customer experience, both in-house and online. Evaluating your customer loyalty program and identifying points for expansion and improvement is an excellent place to start.
Digital Divide: Minding The Loyalty Gap, a PYMNTS and Patronix collaboration, shows how loyalty programs impact customer engagement levels and evaluates how restaurants and food brands can use loyalty programs to build and retain loyal customers and followers. Report findings are based on shopping behaviors from a United States census-balanced survey of 2,414 participants.
Key findings:
- College-educated adults and consumers who earn more than $100,000 annually exhibit the highest engagement rates with local restaurant loyalty programs, at 50%.
- 64% of Gen Z patrons and 61% of millennial patrons participate in loyalty programs at a minimum of one or two of the table-service restaurants that they frequent.
- Consumers using loyalty programs are willing to spend more at local restaurants to earn customized discounts.
How can restaurants leverage this information to their advantage in 2022?
Enrich First Party Customer Loyalty Data with Third-Party Data
What is data enrichment? Enriching first-party data with third-party data offers restaurant marketers more profound insights into customer demographics, cross-channel behavior, postal addresses, interests, and more.
Data enrichment is the process of filling existing data gaps within first-party data sets with third-party data. For example, you might have customer names and email addresses collected with your customer loyalty program. You could use a third-party data provider to help you find postal addresses and ages for each of your customers within your program.
Improve Audience Segmentation
With the example given above, you can imagine how powerful data enrichment can be. With postal addresses for your customers, restaurant chain stores could send targeted email and direct mail promotions to customers near specific store locations.
Restaurant brands could target customers based on demographics, like age, household income, and level of education. For example, as part of key findings from the PYMNTS and Patronix collaboration: “College-educated adults and consumers who earn more than $100,000 annually exhibit the highest engagement rates with local restaurant loyalty programs, at 50%.”
With data enrichment, you could identify who has a college education within your customer loyalty program and earns more than $100,000 per year. Then you could target those customers more aggressively based on their online or in-store engagement with your brand, their purchase history, and milestones, such as birthdays.
Improve Message Relevancy
Segmenting your customers by age would help restaurant marketers craft better email messaging that resonates with that generation. Restaurant marketers need to make different language choices based on which generation they’re trying to connect with. Using Gen Z slang with an Elder Millennial or Boomer is going to fall flat rather than have the intended effect, enticing them to order online or visit your brick-and-mortar restaurant location.
Appending an age to your customer lists will help you tailor your message more effectively for whatever audience you’re targeting.
Retain & Drive Sales
According to a study done by Deloitte, 90% of customers find personalized advertising appealing. According to Campaign Monitor, "[Personalized email marketing] is proven to increase email open rates and drive revenue by as much as 760% because it helps marketers give subscribers more relevant, individualized content.”
Leveraging third-party data enrichment to improve email and mobile message personalization is essential for connecting with customers and followers. Enriching your first-party data with a third-party data enrichment service will help you create powerful database segmentation, nail your messaging to each audience, improve customer retention, and drive sales.
About the Author
Melissa McGaughey is an SEO Strategist and Inbound Content Marketer with a decade of experience in B2B spaces. With a background in Agile Scrum methodology, developing processes and systems to streamline workflows, enhance productivity, and drive ROI is her jam. Based in Pittsburgh, Pa., Webbula is a leader in Email Hygiene, Data Enhancement, and Audience Targeting services.