Next year marks the 30-year anniversary of me leaving secondary school (much to the relief of my form tutor, Sister Anne), and I’ve been reflecting on the many characters within my year group.
The St Thomas More class of ’91 spawned bio-chemists, priests, stay-at-home parents, teachers, mechanics, retail workers, entrepreneurs, warehouse workers, fitness coaches, accountants, builders, authors, labourers, electricians, marketers, doctors, dentists, nurses and midwives – and unfortunately some who never quite found the work or life they’d maybe hoped to.
Observing the friends I’ve stayed in touch with on Facebook, it’s hard to imagine having all these people in the same room now given their adult differences – even though we all grew up in the same town, at the same time.
So why is marketing so fixated on, and driven by, demographic or geographic traits, like gender, age or location – or worse, vague socio-economic groups like “Millennials” (which really just means any human aged between 25 and 40) – when it would be almost impossible to find a message that consistently resonated on social media within my little school year group – let alone an audience of tens or hundreds of thousands of people who haven’t got Sister Anne in common.
As we navigate the next few months, we need to reset our previous marketing approaches (which, if we’re honest, weren’t working particularly well even before covid-19) and see things how they are, not how we desperately want them to be.
And it’s clear we are now firmly in the era of personalisation.
The 90s ushered in the era of choice, with unprecedented innovation and growth across the board – from grab-and-go to premium casual. Giant steps in technology enabled brands to build an online presence that fostered digital engagement and the growth of the voucher economy through the first decade of 2000. And the adoption of social, particularly Instagram, in the 2010s, created the era of the “experience economy”. Consumers didn’t just want food and drink – they wanted it with bells on.
But now the oldest Millennials are turning 40, and Generation Z is setting the agenda. And while Generation Z still wants to eat and drink – like everything else in their lives – they want to do it entirely on their own terms.
So when you consider Generation Z now accounts for 40% of all customers – not including the older groups they influence or are part of – we’re dealing with one of the most powerful consumer forces in the market today. One that no hospitality brand can afford to ignore.
And this has created an obvious new reality – brands that don’t know or understand their customers in intimate detail, will lose them to brands who do.
While there will always be a place for commonality in such things as age, gender and geography, the smart marketer should be transcending those limiting segments and using the data within their businesses to identify and understand the behavioural and psychographic traits of their most valuable customers – and using these insights to drive their acquisition, conversion and retention strategies – which will, in turn, massively increase the value of marketing and its contribution to the top and bottom lines.
So, with capacity, confidence and trading hours at the lowest levels in a generation, and the long slog of recovery ahead, do you know who your most valuable customers really are – and how to get enough of them through your door and on your websites to guarantee your recovery?
Even before the impact of Covid, hospitality had changed forever.
While it wasn’t widely acknowledged by operators, we were already living in a completely new era of eating and drinking.
The 90’s ushered in the era of choice, with unprecedented innovation and growth across the board – from grab ‘n’ go to premium casual. Giant steps in technology enabled brands to build an online presence which fostered digital engagement and the growth of the voucher economy through the 00’s. And the adoption of social, particularly Instagram in 2010’s, created the era of the ‘experience economy’. Consumers didn’t just want food and drink – they wanted it with bells on.
But now the oldest millennials are turning 40, and Gen Z is setting the agenda. And while Gen Z still want to eat and drink – like everything else in their lives – they want to do it entirely on their own terms.
So when you consider that Gen Z now accounts for 40% of all customers – not including the older groups they influence – we’re dealing with one of the most powerful consumer forces in the market today.
And this has created an obvious new reality – brands who don’t know or understand their customers in intimate detail, will lose them to brands who do.
Food & service just isn’t enough anymore and the closures of massive names like Jamie’s Italian, Gaucho, Carluccio’s, Prezzo, Eat, GBK, Giraffe, Strada, Frankie & Benny’s and Byron in the last few years are all testament to that.
In fact the number of UK restaurants falling into insolvency increased by 25% in the year up to Sept 2019*, and that was before Covid hit.
But there are brands thriving in unbelievably difficult circumstances – like McDonalds, Nando’s, Pret & Pizza Pilgrims – and of course the phenomenal growth of the aggregators such as Deliveroo and Uber Eats can’t be ignored.
So how are these brands winning? Data.
Consumers want value, communication and experiences all relevant and personalised to them, and data drives the insight we need to make those calls. Knowledge really is power.
The old world of useless segmentation – driven by anecdotal insight and generic characterisation is no longer fit for purpose. I’ve heard many brands describe their customer bases as ‘millennial’ when all that means is any human aged between 25 and 40.
Activating this ‘hunch driven’ lack of understanding through one size fits all communications and offers which damage margin and brand credibility is ineffective and unsustainable.
It’s time to step forward into the new world – with an in-depth understanding of the demographic, geographic and psychographic traits of the customers we’ve identified as being most valuable to us by their behaviours (within and away from your brand). All driving a targeted approach to acquisition, conversion & retention which can be brought to life with the boundless creativity and innovation in your brand and marketing teams.
So, with capacity, confidence and trading hours at the lowest levels in a generation, and the long slog of recovery ahead, do you know who your most valuable customers are – and how to get more of them through your door and on your websites?
*UHY Hacker Young. 1400+ restaurants closed in year up to Sept 2019.
In real estate, there’s a term used to describe the value of different investments – their ‘capitalisation rate’ – often calculated as the ratio between the net operating income produced by an asset and the original capital cost or it’s current market value. Essentially measuring the potential of return.
In his ‘Revisionist History’ podcast, Malcolm Gladwell discusses the concept of the human ‘capitalisation rate’ – defining it as “the percentage of people in any given situation who have the ability to make the most of their own potential.” Despite the odds against them, these people find a way to compensate for their shortcomings.
And it occurred to me that we could apply this concept very easily to hospitality marketing, and answer once and for all, the question of whether Eat Out to Help Out is our only option – a necessary blessing, or an impending curse.
To answer this we must look at our businesses, and honestly decide whether we are making the most of ourpotential, and assess whether despite the odds against our industry at the moment – particularly in areas dependant on offices, we are making the most of ways designed to compensate for our shortcomings.
I’ve heard countless pleas for the extension of EOTHO through September, and even more talk suggesting EOTHO will be even more crucial as the appeal of outdoor dining wears thin and an unpredictable British Autumn and Winter sets in.
And while I completely understand the instant impact of EOTHO and empathise with the comfort it brings (I’ve sat in enough boardrooms debating how to drive covers – and fast), there is massive potential in so much of what we already have available. And if we take action now, we can see the benefits before the first Halloween displays go up.
So, before you push the button on another few months of EOTHO style discounts, ask yourself whether you’re making the most of your business’s marketing potential.
1. Are you optimising your acquisition?
Your data can tell you who is most important to you as a customer, and ‘track & trace’ is likely to be driving unprecedented levels of insight. By defining your most valuable customers according to their frequency, recency, loyalty as well as other desirable behaviours we can find others who share the same characteristics – who may not have already engaged with your brand. Even if you’re already absolutely nailing it and capturing 5% of your market, that gives you 95% of opportunity. And because targeting your advertising through social, SEO and digital ads (and I mean properly targeting, not just using the broad ‘generic targets’ offered by Facebook etc), is so effective your ROI could be as attractive as your sales numbers.
2. Are you set up for conversion?
You’ve probably got tens or hundreds of thousands of contacts sitting in your CRM, but how often do you segment them by behaviour to ensure they’re receiving the content most likely to get them to hit the ‘book now’ button? Your CRM is an absolute oasis of opportunity, able to drive both frequency and spend when it’s used correctly.
And are you automating your communications and optimising your online customer journey to push people along the booking or purchase funnel? Whether you’re aiming for bums on seats, or pork chops in the post – automating your journey can turn interest into action – in an instant.
3. Are you prompting people to return?
Assuming your ops are on point and your customers had a brilliant time, communicating immediately afterwards when the warm and fuzzy feeling is still fresh in mind is the ideal way to keep your brand in your customers thoughts. And by using your data to get to know your customers really well you can offer the perfect mix of inspiration and incentive to revisit, in the most discreet of ways.
We have an opportunity now to look within our businesses, and make the most of the potential lying in our marketing technology and data, setting us up for success – despite the odds against us.
As hospitality businesses across the UK edge closer to reopening, the details surrounding the mandatory participation in the government’s track & trace initiative remain somewhat vague.
At a time when businesses are fighting to get open as quickly and safely as they can, the added pressure and uncertainty of track & trace must sometimes feel like a stress many could do without.
As we come to terms with reduced capacity, reduced confidence and a market already starting to feel battered by redundancies, cutting costs will become a defining factor of many hospitality survival stories.
But what has this got to do with track & trace? Well according to Frederick Reichheld of Bain & Company, inventors of the NPS system, retention is anywhere between 5-25 times cheaper than acquiring new customers. I know where I’d be placing my marketing bets right now.
So how do we know which of our customers are most valuable to us? And we really do have to think like that at the moment, because with some businesses running at a fraction of their usual capacity, we want to make sure we’ve got our most valuable customers taking up chair space, even if it’s just to buy us the freedom to support those without the spending power we’d like. And i’ve seen some truly beautiful examples of this in brands opening plans.
While we have a continued responsibility to protect our customers and teams – something that comes naturally to an industry as heavily regulated and passionate as hospitality – there is a once in a lifetime opportunity hiding in plain sight.
Collecting data from as many people as possible, makes the track & trace system as robust and effective as possible, reducing the chance of a second wave – which would surely be fatal for many of our businesses.
And there’s an additional silver lining. Most businesses are capturing only a fraction of their footfall data, and few are using the insight that data can provide to drive strategy or action. By being proactive about track & trace, EVERY customer could in theory leave a digital footprint, offering businesses a truly unprecedented level of insight (and growth opportunity when used in the right way).
While the details are yet to be finalised, track & trace providers are typically leaning towards collecting names, email addresses, phone numbers and visit times & durations; enabling you to identify (and if the user already appears in your data somewhere – profile) your most valuable customers – defined by their frequency, recency & loyalty to your brand.
A percentage of those new users being tracked through your chosen channel will also decide to opt-in to marketing communications, giving you a golden opportunity to enhance your understanding of the behaviours, preferences and motivations of these customers first to come out and enjoy everything hospitality has to offer. Remember it’s this first wave of visitors who will lead and convince the rest to follow them.
It’s absolutely vital we protect our customers’ trust in us and the systems surrounding data protection, as well as their health, and you must decide for yourselves the most appropriate balance between proactivity, legal requirement and customer comfort. Speaking to the ICO (Information Commissioners Office), they confirmed that by anonymising (i.e. removing any information by which an individual can be identified), the data remains completely compliant.
And in some cases, data must be disposed of within the given 21 day timeframe, meaning we have a narrow window through which to grab this opportunity. This means that we can’t just gather it and sit on it until data becomes a hot topic in the boardroom. We must, and should, use it now.
Hospitality is a unique business, built and run on passion and gut instinct more than any other sector. According to McKinsey, “We have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks”. In order to survive what will be one of the most fundamental shifts in society since the dawn of the digital age, we must continue to drive this pace and equip our brands with the clarity, certainty and direction only data can provide.
So, don’t just fling open the doors on July 4th and beyond and accept whatever comes your way. Think carefully about the data you likely already have sitting within your business, whether from WIFI, CRM, payment, social media; and the data you have the opportunity to gather now. This is not about coercing people into giving you their precious data under the guise of caring for their wellbeing, but it is about grabbing it when it’s offered.
And use the insight that lies within, to plot your strongest possible recovery.
Please do get in touch if you’d like some help with this. I wish you all a very strong, and speedy recovery.
Those of us who earned our stripes in ops will know that operations, pre-lockdown, had largely remained the same since the dawn of time; deliver a consistently brilliant (& safe) guest experience through personality, empathy & charm, backed up by effective systems & procedures to get the nuts & bolts done. It’s a function that operated pretty consistently across the hospitality industry as a whole.
As times changed, and business got harder, operators embraced technology (from scheduling platforms to wastage trackers) – and the data they generated.
At both strategic and site level, teams have poured over the data trying to understand why things went well, and not so well; chiselling away to find the often marginal gains that turn ever decreasing sales & margin into bottom line profit.
It’s fair to say operations was as much about the numbers, the tweaks, the next piece of technology that might give us the tiniest edge over our competitors, (and our own previous performance), as it was about showing our guests a good time.
Yet marketing, in many cases seemed stuck in a time warp, where decisions were driven by gut-instinct and executed with a very broad brush.
And this crisis has highlighted that marketing is still very much thought of as an expense rather than an essential investment, shown in part by the number of marketers on furlough.
And yet, the marginal gains found in our operational data, exist just as clearly in our marketing data; if only we’re prepared to look for them.
Imagine if I told you there was an operational system that could significantly increase footfall without sacrificing margin; or a system which compelled people to return again and again, without wasting precious promotional spend; or a loyalty scheme which kept users engaged without the need for constant giveaways – most operators would grab these systems with both hands.
And yet, similar sorts of gains can be achieved with the systems which already exist in many marketing functions – when they’re used correctly, or as the developer intended.
So here are 3 of the biggest drivers of acquisition, conversion & retention (and the good news is, you’ve probably already got them).
1.Website & online
Imagine your website as a flower, attempting to lure in a constant stream of bees. But how do those bees know which flowers (or websites!) hold the tastiest nectar?
Just like some of the most successful flowers have evolved to develop incredible fragrances, or wide-open petals, which make it easy for the bee to work out where best to focus its efforts; we can use Search Engine Optimisation (SEO), or targeted online ads to highlight our own best features; making it easy for your potential customers to know where to focus their efforts.
And Google doesn’t just help people find your website.
Having a correctly set up and optimised Google My Business profile, puts your brand’s nectar front of mind for anyone opening a map on their mobile device. And given that there are 24.9 million searches of ‘restaurants near me’ taking place every month, (according to SideDish Media), being correctly listed and optimised is a really important way of getting seen, at exactly the time people are searching and ready to make a decision. Kind of like your flowers giving their petals a little shimmy to attract our thirsty bee.
But the benefits of getting people to your website don’t end at that one search. By using pixels to track your visitors, you’re able to directly re-target them (and people who share the exact same characteristics as those interested visitors) on a range of platforms such as Facebook, Instagram or Linkedin.
Your CRM system is a really useful place to divert and hold the data coming into your business, continually enriching the profiles of your database. And this data can help you learn not only who your most common customers are, but who your most valuable are, in terms of recency, frequency and loyalty.
And now you’ve used your data to get properly (if virtually!) acquainted, use what you know about their interests and behaviour to give them compelling reasons to stay engaged, and most importantly, turn interest into action – whether that’s a booking or purchase.
UK Director of Sprout CRM, Dhilon Solanki explains; “How you manage and leverage your data will ultimately drive long-term loyalty and advocacy for your brand. It’s crucial to understanding their interests, behaviour, frequency, all the key ingredients to create a richer customer profile.
Strong engagement, combined with targeting the right message, giving a reason to visit / purchase, at the right time generates repeat customer business – something that is highly sought after now and will be of utmost importance when restrictions start to be lifted.”
But misuse of CRMs can damage engagement and conversion. As tempting as it may be to blanket send a message to the whole base, this lack of personalisation or relevance will quickly erode engagement, turning your oasis of opportunity into the driest of deserts.
As the crisis hit many brands paused their social through, what would be understandably seen, as financial necessity.
However, social media is the emotional, up close and personal connection you have with a brand, and those who paused it were effectively saying, ‘we don’t have anything to say to you as long as we’re not able to sell you something’; which is the equivalent of the friend who stops returning your texts when you stop offering them a lift to work.
But it’s not enough to plonk pictures of food, with cliched messaging, encouraging the user to ‘enjoy’ or ‘try’ your wares. Brands must create and maintain a strong and engaging presence in the most creatively authentic ways. Which maybe feels a little odd while venues remain closed, but will pay dividends as restrictions (whether government or self-imposed) start to lift.
Marketing Consultant, Vikki O’Neill says “At a time when your existing guests and target market are spending more time than ever on social – where are you? It’s the perfect opportunity to be interactive, authentic and creative – and why wouldn’t you want to know how your guests are feeling or thinking? I’ve seen an increase in every social stat; from +120% in engagement, a 1000% increase in social profile visits, from regulars; but also people who didn’t know the brand but had been exposed to our content and were wanting to know more. This has helped drive a 36% increase in Google searches for one particular brand in the 5 weeks since lockdown -all working to maintain our focus on acquisition and conversion once we’re through the other side”.
While operations, finance and marketing are often, inexplicably, not only on different sides of the fence, but also in completely different fields; a consistent approach to technology and data throughout a business can drive success across all functions.
And with a combination of both marginal and more significant gains maybe being the difference between sink or swim in these coming months, there’s never been a better time to use what’s within the easiest grasp.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.