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Why QSRs need to ‘cook up’ a perfect customer loyalty solution

Tue, 11th Oct 2022
FYI, this story is more than a year old

Competition in APAC’s quick-service restaurant (QSR) industry is heating up. According to Technavio, the region’s food-service market is poised to grow to roughly AU$460 billion by 2025. And the increasing number of food-service chains entering the market is a key driver of this explosive growth.

The pandemic has accelerated the shift towards a more digital world. And for those slow to keep up with the evolution, it will be difficult — if not downright impossible — to reach the right customers and remain profitable.

According to McKinsey Global Institute, data-driven organisations are 23 times more likely to acquire customers, six times as likely to retain customers and 19 times as likely to be profitable as a result. To stand out in the saturated QSR space, it’s imperative to embrace digital transformation to power relationship marketing or risk becoming antiquated.

Serve up better experiences with unified data

A single source of truth, or unified data, is the foundation of any digital ecosystem. It combines meaningful, reliable data from multiple systems into a single view that’s more accurate, more complete and truer than the data from any single source alone.

Unified data acts as a complete record for all relevant customer information across the system, including all chains, franchises and subsidiary brands. Simply put, a unified individual profile includes identifying information about customers, the channels they use to interact with the restaurant, their dining transactions, most recent interaction with the brand and the offers they reacted to positively. These are the very things marketing teams can turn to when they want to be certain they have the most up-to-date data on a particular customer.

By serving up a unified data approach, as individual preferences or transaction history changes, the record alters with it. For example, if a customer interacts with the restaurant through an app and then switches to interacting mostly via the website, the system underpinning the unified data would notice the change and update its data accordingly.

Therefore, delivering truly engaging experiences, not just from the kitchen, requires access to all forms of data. With the impending deprecation of the third-party cookie, it’s never been a better time to focus on first- and zero-party data collection. This data, which is willingly provided, can be seamlessly integrated into a CDP to provide a complete, unified 360-degree view of customers, identifying and matching them with their dining behaviours.

Yet, despite the importance of having unified data — and the clear dysfunction that results from having fragmented views of customer data — many restaurant chains still struggle with data silos and competing versions of the truth. Without the ability to get all data harmonised in one place, QSR’s future initiatives are sure to never realise their full potential. To deliver seamless and engaging customer interactions through the entire lifecycle, restaurant marketers must use data to drive personalisation, analytics and better decision-making – the secret sauce of relationship marketing.

Achieve competitive advantage with next-gen loyalty

Without unified data, QSRs will struggle to affect real ROI from any loyalty initiatives. However, once the single source of truth is cemented, next-gen loyalty can be achieved. Fully-formed loyalty programs are crucial for restaurants because they’re the entry point into their digital ecosystem. And the most frictionless medium in which most people join a loyalty program is by downloading the QSR’s app. Apps open QSRs to a mountain of opportunity with digital ordering and communication channels. Even more, they open the door not only to loyalty programs but to building more meaningful digital relationships as well.

Loyalty is about more than undercutting the competition next door or giving away a free order of hot chips on the customer’s tenth visit. Modern diners expect comprehensive loyalty programs that go beyond generic ‘points-win-prizes’ incentives and discounts. The core of loyalty is not merely the cheapest price point; it’s a restaurant brand that can foster community, recognise the customer as an individual and deliver content and bespoke deals that reflect this.

In fact, Cheetah Digital’s 2022 Consumer Trends Index showed a 110% lift in people wanting to be treated as an individual. Even more, over 50% of customers say they are comfortable sharing their data with a restaurant brand in exchange for better digital service. Yet, many in the restaurant space still invest far more resources in acquisition strategies than retention. For restaurant marketers, there should be no greater achievement than locking in a loyal customer — one who not only has an affinity for its menu and brand promises but will also pay a little bit extra or travel a little bit further, if required.

Cheetah Digital’s Consumer Trends Index also revealed that 63% are prepared to pay more to purchase from a trusted restaurant brand. However, it’s to be noted that consumers are loyal by nature but also opportunists. So it’s wise not to take them for granted. Restaurant brands should leave nothing on the table and develop a loyalty strategy that keeps customers thinking about them first in the moments that matter, especially when hunger strikes.

In today’s digital world of infinite choice, undercutting competitors is just a veritable race to the bottom. Product differentiation is tough to maintain, and market domination is short-lived. A next-gen loyalty program that truly rewards customers as individuals is the most surefire differentiator.

Emotional and genuine loyalty is an outcome; a goal that can only be achieved by truly knowing customers and carefully nurturing relationships with them. Every action, input and communication a customer receives should make them feel valued and respected. Relationship marketing is key to winning.

Connecting at the right time

There are numerous touch points in which QSRs should be connecting with their customers. However, email is a big one. According to Cheetah Digital’s 2022 Consumer Trends Index, when it comes to driving sales, email beats paid social and display advertising by up to 228% in Australia — 120% higher than consumers globally.

At the same time, in today’s digital and interconnected world, the importance of tailoring relationship marketing efforts to be mobile-first rather than merely mobile-responsive can’t be overrated either. To put into context, a staggering eight out of every 10 digital minutes reside on a smartphone. It’s clear that a fully-fledged mobile strategy is no longer a ‘nice to have’ for restaurant chains but a cornerstone of its digital strategy.

Customers interact with an average of six digital touchpoints when engaging with a restaurant. These include social media, payment through wallet, and offers from SMS or email, to name a few. Importantly, however, all of these touchpoints can be directly accessed through mobile. And the upside to this is that restaurant brands can gather vast amounts of customer data, opt-ins, preference insights and behavioural data to no longer infer but anticipate what a customer is likely to do next.

As people’s behaviours have modified during the pandemic, and more time has been spent on additional screens, and different channels, powering cross-channel messaging from unified data empowers a restaurant marketer to more closely align with customer expectations, improve the relevancy of messaging and make that all-important connection on the right channel at the right time.

Connecting email, SMS and the like to a data platform allows QSRs to drive engagement with customers through data-driven messaging. They can define customer audiences using the most up-to-date customer profile and run queries on large data sets. Then they can apply analytics in real-time, such as content and menu recommendations, as well as send at the optimal time and trigger campaigns based on online behavioural data or other real-time events.

Additionally, with a data platform, QSRs can go beyond static lists or antiquated relational databases. They can rely on other unique identifiers beyond email, like a phone number or social media profile, for example. This helps restaurant brands tie together many different attributes, providing a clearer view of customers and optimising their experiences.

Boldly embracing digital transformation

Years from now, when the pandemic’s impact on global business is analysed, it’s likely that the most striking change will be how it accelerated digital transformations. While many restaurant brands were challenged to survive in the short term, the crisis also presented opportunity. And the bold restaurant marketers that invested ambitiously into their digital infrastructure emerged as market leaders with the secret ingredient for winning: relationship marketing.

Even with lockdowns and movement restrictions largely a thing of the past, 39% of restaurant customers say they plan to continue to enjoy delivery rather than in-house dining. To win, restaurant brands must focus on key customer experience drivers, providing a consistent and seamless user experience whatever the touchpoint, implementing loyalty that rewards as an individual, safeguarding data and privacy and offering true personalisation.

Food for thought

Relationship Marketing begins with the first interaction, where you meet the person by offering a rewarding experience. From there, you can transform the ‘unknown customer’ into the ‘known’, engage with their personal wants in real-time and accompany them into the valuable and mutually beneficial life of a loyal customer.

First step: creating the value exchange. Whether you’re looking at it from the marketer’s or the customer’s perspective, it’s simple: ask, receive, give, repeat. Marketers want customer information. Customers want personalised experiences, and marketers need personal information to deliver that. It’s a match made in relationship marketing heaven.

Data collection, when infused with honesty and that embraces the value exchange, can successfully procure qualified consumers. While buying data and spying on online behaviour may get you a bucket of addresses; the real quality of those addresses and the likelihood of long-lasting value is questionable. Time and resources are better spent acquiring reliable information directly from the consumers.

This zero-party data can include customer preferences, personal information, communication ideals and purchase intentions. Engage customers and encourage them to share their personal information in return for real value like offers, rewards and a more personal relationship with your brand. By creating this value exchange with the customer, everyone wins. And you can embark on the start of what can be a beautiful, loyal and profitable relationship.

Takeaways: 3 Key ingredients for marketing success

Unified actionable data: Consolidating your data is one thing; having it be actionable is another. Built on a modern data architecture for unmatched power and flexibility, the Cheetah Digital platform not only unifies all your data signals into a 360° view of your customer, it lets you create actions from those insights in real-time at scale.

Intelligent offers: Create the personalised experiences your customers now expect. Advanced machine learning and decisioning capabilities and next-gen offer management tools can deliver the “next best action” for each diner in real-time throughout the customer journey. Transcend mere points and discounts to build the emotional loyalty that keeps customers coming back more often.

Dynamic omnichannel messaging: Meet your customers where they are by designing highly personalised, contextual communications that flow seamlessly across all your digital touchpoints.

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