It’s becoming increasingly difficult to separate technology from the customer experience in today’s fast-paced hospitality scene. Many struggling operators have said “we don’t need technology – we rely on great food and excellent service”. The fact is, this isn’t enough if operators want to stay relevant in a saturated marketplace. These days excellent service starts with technology. Consumers expect it to be part of the occasion and operators who provide that digital dimension will be the ones who come out on top.
Taking the dining experience digital
Competition is now so fierce in our industry, with innovation making the tech route so accessible that the strongest brands are emerging as those who are taking their dining digital. The possibilities technology opens up are vast, which is why we’re seeing more and more operators seeing investment in this area as a necessity.
Far from needing to think of new ways to sell an offer, operators are turning to technology to maximise profits from existing revenue streams - surely the quickest way to boost the bottom line. Key areas for refinement where technology can help include increasing average spend per head, upping the frequency of visits and transactions, reducing the cost of ingredients, ring-fencing labour costs and improving production and delivery efficiencies. Once refined, operators can then look at identifying and winning new customers. The best route to achieving much of this is down the data highway. And the easiest way to get that data is to go mobile.
Keeping up app-earances
Loyalty schemes are nothing new, and all operators should be looking to reward customers for continued loyalty. YouGov has found more than three-quarters of the UK population belong to at least one loyalty scheme but only 25% of those are with restaurant and out of home operators, compared to the sizeable 65% who surrender all their shopping habits to a supermarket.
For hospitality operators, it’s how a loyalty programme is presented that is crucial to winning and retaining a faithful customer base. Hospitality is often about lifestyle and keeping up with the latest consumer trends. Today’s sophisticated loyalty programmes give restaurant customers meaningful offers, designed to fit around their lifestyle, which means the mode of delivery needs to reflect this. Cue the app.
The customer information and purchasing behaviour that operator apps provide should be the biggest influencer in a brand’s marketing strategy. Consumers are over blanket promotions and one- size-fits-all. Customer fatigue in the face of a barrage of mediocre marketing messages has seen the better brands get personal in their approach. Leveraging the data in loyalty to personalise every experience is the lynchpin in building a unique value proposition for the brand and key to capturing the consumer’s imagination to create sales opportunities.
Starbucks is a leading light in achieving these aims and uses technology as a major sales driver. Its “digital flywheel” incorporates all aspects of a seamless customer experience to drive high levels of engagement, revenue and profit growth utilising its order-ahead, payment and loyalty rewards programmes. Indeed, the order-ahead option contributed 9% of all transactions in 2017, and 30% being paid on the mobile app. The app as a whole accounted for 36% of total revenue in Q3 of the same year. Taco Bell in the US also reports a 30% jump in spend per head on mobile. The technology keeps transactions slick and frees up staff time to make every visit the best it can possibly be for a customer. The icing on the cake is the ability to use the data captured during mobile transactions to personalise promotions to a really granular degree, stirring up even greater interest and increasing sales.
The time is now
The additional bonus of a mobile loyalty app means operators benefit from location-based marketing with truly personalised push notifications sent straight to the customer’s screen to let them know for example that their favourite coffee shop is nearby and, for the next two hours, there’s an offer on their regular drink with an accompanying item they know the customer often chooses. App-based programmes also put the A-board in the customer’s pocket: algorithms that link a smartphone’s location to the local weather report, for example, enable operators to push offers to customers of a cold drink on a hot day or a cosy coffee if it’s freezing where they are. This is priceless personalisation with instant results. Investing in digital platforms that allow geo-targeting in this way is transforming the marketing landscape for savvy operators.
The combination of a physical presence and a digital layer makes brands almost irresistible. The right loyalty app offers deep customer engagement to trigger orders and generate data, all in one place for both consumer and operator. Additionally, artificial intelligence and the use of the big data these schemes collect are the immediate future for success as a hospitality operator.
The data can also be used to reimagine email marketing. Once a laborious process, technology now enables operators to automatically create hundreds of thousands of personalised email variants every week. In another example of how it’s harnessing customer data, Starbucks recently began offering real-time email offers - so highly personalised as to be almost unique. Far from the e-marketing backlash seen in the last few years, this newly intimate approach saw response rates increase three-fold.
Domino’s has famously become one of the biggest players on the digital field, and is a big advocate of personalised marketing, citing the ability not only to send the right promotions to the right household at the right time, but to direct offers to the person the company knows is the one who usually reacts and all via numerous channels, such as Apple TV, Google Home, Amazon Echo, SMS and smartwatches to name just a few. Its digital disruption of such an old-school service as pizza delivery saw online sales jump 17 percent by the end of 2017 in the UK alone and by July 2018, digital requests were making up 80 percent of total orders.
So transformational has Domino’s digital investment been, the company’s ambition is described as being not a pizza business that uses technology but “a tech company that happens to sell pizza”. These sound like bold claims for a retailer but it’s happening and other brands, big and small, can emulate this digital success using apps designed and branded specifically for their business. The key for operators is to slot in all the pieces of the personalisation puzzle to create a lifestyle enhancement customers can’t do without. Operators need to remember, an experience lives much longer in the memory than a discount, so the secret is to ensure their chosen mobile loyalty scheme does indeed enrich and personalise the experience for customers.