Originally published on ModernRestaurantManagement.com | Click here to see the article
Resurrect your restaurant dead times and boost revenue with innovative marketing, using guest wifi, and personalized messaging. Learn how to understand your customer, the segment your customer base, and then, with personalized text messaging, and digital displays, change customer behavior all with integrated WiFi marketing to fill seats and drive success.
Seeing empty seats in your restaurant is disheartening, but the impact goes beyond just losing money. It leads to various challenges, like using resources inefficiently or the fear of being perceived as unpopular. It also makes it difficult to cover fixed costs, which has become even worse due to struggles with inflation, supply chain disruptions and staffing shortages following the pandemic. As a result, a staggering 61 percent of restaurants end up failing within their first year (Ohio State).
However, there’s an opportunity to turn slow nights into “grow” nights and counter declining revenue by changing customer behavior. Although it might seem challenging, thanks to modern technology, restaurants can now understand and engage with their customers in new ways, ultimately filling up those empty tables.
Why Innovative Marketing is Changing Customer Behavior to Drive New Revenue
Imagine owning a restaurant in a busy downtown area where professionals flock for lunch breaks and after-work drinks. However, as the clock strikes 6 p.m. from Monday to Thursday, your once lively space becomes almost empty. This leaves you burdened with overhead costs while the restaurant remains at best half full.
Now, envision the significant revenue potential if you could fill those tables for dinner throughout the week. The owners determine the key lies in changing the behavior of customers who only come for happy hour cocktails and encouraging them to stay for dinner, bringing their companions along. It’s worth noting that altering the behavior of existing customers is far less costly than acquiring new ones, which can be up to five times more expensive, according to Invesp.
However, changing customer behavior is no easy feat, and a simple “20 percent off dinner entrees Monday thru Thursday” sign is literally the worst possible option an owner might choose as it devalues your product, indiscriminately gives everyone the discount, and offends the weekend guest, as they feel they are being punished for coming in on the weekend. Without question the superior answer is a strategy and implementation that creates customized experiences, fosters strong connections, boosts guest engagement and significantly influences customer behaviors.
Understanding Guest Behaviors Is the Cornerstone of Effective Personalization
Unlocking the power of personalization in your messaging starts and ends with effective customer segmentation. In other words, dividing customers into distinct groups based on behaviors and characteristics allows you to “talk” specifically, and personally, to the members of that group. It’s a crucial step to ensure that recipients receive messages that match their behavior and preferences and are designed to then modify or augment their known behavior to generate greater loyalty, increased revenue or more awareness. Surprisingly, 88 percent of U.S. marketers have witnessed business growth by using personalized messaging. Ignoring the importance of segmenting customers will result in sending irrelevant messages that make customers lose interest or, worse, stop engaging altogether. However, by segmenting customers based on their behaviors, you can send tailored messages that show interest, awareness and “feel” appropriate because they fit their actions and desires seamlessly.
While correctly segmenting your customers for highly targeted messages is critical, the “other side of the coin”, as introduced above, may actually be more important. Imagine that you’ve uniquely targeted 10 percent of your customers with a message that fits their behavior, i.e. Wednesday’s Lunch Menu, for anyone that’s been visited for lunch on a weekday in the last four weeks which results in a list of 200 customers of your total list of 2,000 contacts. What you have also accomplished, and is even more important, is that you haven’t sent that message to the other 90 percent (1,800) of customers that have never been to your restaurant for lunch on a weekday. It weeds out the customers who are uninterested in weekday lunch, and who therefore might easily be annoyed by the message and who would unsubscribe due to the irrelevancy.
Let’s go back to trying to actively change “the right customer’s” behavior. Think back to the restaurant scenario we mentioned earlier. Imagine sending a text message to your entire customer list, offering a tempting 20 percent discount on dinner entrees during happy hour. While some customers might be interested, it won’t resonate with those who only come in on weekends, making the message irrelevant, or annoying, to them, and therefore “devaluing” all communications from you. Timing and context also play a role in creating “high value” communications.
Picture a customer who usually enjoys weekday cocktails but receives the text message while already having dinner with their family at home. Although the message is relevant, its impact decreases if the timing and context aren’t aligned. This emphasizes the importance of reaching customers with personalized messages in the right place and at the right time to evoke the desired response. By segmenting customers based on their visit days, times, purchase history, and frequency, you can fully utilize the power of resonating with different customer groups, increasing engagement, and boosting the chances of achieving your goals.
And, now we have the answer to the owner’s question. On Monday at 2 p.m. we are going to send a message to every guest that has been on-premise at least once in the last three months, on Monday through Thursday, who arrived between 4 and 6 p.m., but have left before 6:30 p.m. with our perfect, personal message: “Tonight you and three friends can each enjoy a free appetizer and dessert with your entree – just show this text to the hostess.”
How to Segment Your Customers
Overall, effective segmentation relies on customer data, which can be obtained through various methods. Here are a few examples of how to capture it:
Loyalty Programs: Restaurants can establish loyalty programs to gather valuable customer information, including names, contact details, and favorites and preferences. By offering incentives and rewards, restaurants can encourage customers to join the program and willingly provide their data.
Online Reservations and Ordering: Utilizing online reservation systems and digital ordering platforms allows restaurants to collect customer data during the booking or ordering process. This data can include contact information, dining preferences, and even dietary restrictions, which helps in creating customer profiles.
WiFi Hotspot: Offering free WiFi with a captive portal presents an opportunity to collect customer data in exchange for access. Restaurants can request basic information like their phone number or allow customers to connect using their social media accounts, enabling data collection for segmentation purposes.
While all three methods mentioned above enable restaurants to acquire customer data, only the WiFi captive portal option provides an opportunity for automated marketing integrations, also known as integrated WiFi marketing.
Integrating Your Segmented, Personalized Messaging
Harnessing the power of integrated marketing can make a significant impact, as proven by a study from Gartner showing its effectiveness being 300 percent greater. Imagine using advanced WiFi marketing technology in your restaurant. When a customer visits, they can access the free WiFi by providing the most basic and least intrusive information.. Once connected, their device becomes part of the network, forever. This is how you understand their behaviors. This opens up the opportunity to send targeted messages at the ideal time. Text messages can be seamlessly integrated with social media, email, and digital displays. To better understand this transformative approach, let’s go back to our previous example.
Enter Sally, a loyal customer who frequents your restaurant once a week for happy hour, enjoying a drink with her friends before departing by 6 p.m. Through the WiFi hotspot and the customer data you’ve curated, your filters identify Sally as an ideal candidate to become a fan of your dinner entrees and assist in filling seats after 6 p.m. Picture this: as Sally strolls into your establishment for her customary cocktail, her phone lights up with a text message: “We’re thrilled to have you back for Happy Hour! Delight in a 20 percent discount on a dinner entree today. Text DINNER to XXX for this exclusive offer.” Suddenly, Sally is filled with motivation to stay for dinner, and who knows—she may even inspire her friends to do the same.
Filling Seats and Measuring Success
In this article, we’ve shown one main example to explain how you can fill up empty seats. However, there are many other ways to use an integrated WiFi marketing program to attract more customers to your establishment and make slow times busier. Firstly, there are numerous strategies to communicate with different customer segments and encourage them to modify their behaviors and therefore generate more revenue.
For example, you can offer incentives to customers who usually come on weekends, urging them to visit during weekdays. Similarly, you can encourage customers who usually dine alone to bring their friends along or entice those who only come for special events to visit for lunch or dinner. Integrated WiFi can also be utilized in the following ways to drive more people to your restaurant and increase revenue:
Targeted Promotions: Leverage customer data collected through integrated WiFi to identify customers who tend to visit during slow periods. Send them personalized offers, discounts or promotions tailored to entice them to bring guests to the “slow times.” For example, offer exclusive happy hour deals for a table of four, weekday specials or limited-time “Chef’s Menu” during those off-peak hours to incentivize visits.
Real-Time Notifications: Utilize integrated WiFi technology to send real-time notifications to the customers’ phone when they are on premise, for example, during lunch Tuesday, between 11a.m. and 3 p.m. only, offer a free dessert for two tomorrow, Wednesday night, creating a feeling of “exclusivity” for the loyal customer and a sense of urgency to claim their prize (during your slow times).
Loyalty Rewards: Implement a loyalty program connected to the integrated WiFi system, offering rewards and incentives for repeat visits during slow periods. For example, customers who visit during off-peak hours can earn extra loyalty points, receive exclusive perks, or gain access to VIP experiences.
Social Media Integration: Integrate the WiFi marketing system with social media platforms by sending a text 10 minutes after a customer arrives, encouraging and even rewarding a customer for a check-in, or share their dining experiences with their friends, tagging the restaurant’s social media. Always encourage customers to post about their visits during slow times using designated hashtags. For example, in the real-time text you give them the tag #ManicMonday and reward them with a free glass of wine for a post and a mention on Facebook..
Customer Feedback and Reviews: For the newer customers, send a link for an internal survey and offer an incentive for participating, but for the regular, on the 5th visit in two weeks, ask for a review on social media and, of course, provide the “single click” link to the review page. This valuable data can help identify areas for improvement, understand preferences for the first impression from new customers while generating positive online reviews from those that just can’t stay away.
Location-Based Targeting: Utilize location-based marketing through integrated WiFi to re-target customers who are in your venue. These are captured customers, ideal candidates for SMS to increase awareness of your attached gift shop, or your venue’s “late night” menu after the local bars close, or simply to encourage them to ask their server for information on tickets to your next high profile event that is certain to sell out.
It’s crucial for restaurants to turn slow nights into opportunities for growth. The key to filling seats and tackling declining revenue lies in changing customer behavior. Personalization, achieved through behavior-based customer segmentation, plays a vital role in creating customized experiences that connect with customers and influence their actions.
By using WiFi marketing technology, businesses can send targeted messages through various channels, engaging customers and increasing the chances of achieving desired outcomes. Integrated WiFi marketing not only fills seats but also provides chances for targeted promotions, real-time, on-premise notifications, loyalty rewards, social media integration, customer feedback, reviews, and location-based re-targeting. By embracing these strategies, restaurants can unlock their potential, attract more customers, and transform slow periods into busier and more profitable times.
Originally published in Modern Restaurant Magazine / MRM
by Stephen Gould, CogoBuzz CEO/Founder