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Is Data the Missing Ingredient for Restaurant Success?
Sameer Mungur
Founder and CEO-Zipscene
Tuesday, October 20, 2015
Success in the restaurant industry is hard to come by, with six out of every ten restaurants closing within the first three years of opening. The large influx of new restaurants is one reason success in the restaurant business is so difficult to obtain. With so much competition, hungry consumers can choose exactly the right restaurant for each and every need. Thankfully for customers, this statistic has not deterred passionate restaurateurs from chasing the dream of being the next Chipotle, Five Guys, or Pinkberry.

Consumers choose a restaurant based on unique and always changing factors; in the industry we call them 'guest occasions'. Guest occasions are factors like time of day (breakfast, lunch, dinner), day of week (weekday, weekend), who they are dining with and why (date night, business lunch, family birthday), as well as what guests are hungry to eat.'What do you feel like eating?' is the famous question consumers ask each other when making a dining decision. The answer is heavily influenced by the consumer's last dining occasion. Decisions are also influenced by environmental factors like weather (rainy, sunny, snow) and local market conditions (traffic, events, and commuting patterns).

The decision on selecting at which restaurant to eat that will satisfy their unique dining occasion is made in a matter of seconds and within an hour of the event. Traditional advertising, like TV, radio, print, is not built to be present in these critical moments. Something else is needed that can serve a restaurant's ads at the moment it's needed, to the right person, on the right platform.

The restaurant's very own data just might be the solution.
A huge advantage restaurants have over every other industry is the rate of data incidences per person. That's the number of data points people create during a transaction, and over the lifetime of their relationship with a brand. Customers may not buy a car or stay in a hotel very often but do tend to eat out frequently. As a result, restaurants accumulate massive amounts of data points about dining behavior. This treasure trove of data allows marketing teams to build a rich, 360-degree view of their ideal customer.

A robust profile of each guest combined with new data-driven marketing solutions empowers restaurant marketers to target guests based on their unique dining occasion. Facebook advertising offers a great example of how this can be put into practice. Campaign ad managers can target people from specific age groups and geographical locations that have similar demographics and interests to people from the guest profile. For example, an ideal guest may be a working mom who makes frequent transactions on weekday evenings and buys more than four items from the main course menu. She is likely to respond to advertising with special offers on family meals, and she will likely present the offer at the point of sale. This type of targeted marketing allows brands to increase the success rate of advertising campaigns without overspending.

Our clients have found success leveraging profiles created within our data management platform to target new customers using digital display media ads. Based on our knowledge of customers in the "Loyal Moms at Work" demographic, for example, we could feature the ad on a site we know she visits at key times when she would be considering a meal. The advertisement would include a call-to-action about ordering online to save time, or a special offer to try a restaurant for her family's next meal. These targeted campaigns work because the message is delivered to people in a timely, relevant experience. The campaigns can be tracked and measured to eliminate underperforming ads and shift dollars to high performing ones.

Restaurants face stiff competition among a growing industry and frequent fragmenting of media channels used to reach their target customer. Incredible opportunities await those who build a robust profile of ideal guests using the transaction data they are already generating. By running media campaigns targeted at a specific audience from that guest profile, on the right platform, and with the right message, restaurants can cut through the noise from the competition. Using robust guest profiles plus data driven marketing tools is the new and tasty recipe for success in the restaurant industry.

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