Our study reveals insights and effective strategies to help drive omnichannel ordering and frequency from your underperforming guests.
It is no secret that customers have high expectations and demand consistency when visiting a restaurant. From great food to incredible customer service, a customer’s overall experience influences their decision to return to a restaurant and how often. Still, other factors may help influence your guests’ frequency within your four walls or even their willingness to try new channels.
Here are some of the trends we have discovered based on our internal study of spend and frequency, as well as how habits shift when you promote across channels.
Targeting Current Customers Can Drive Results
Numerous studies suggest that it costs five to seven times more to acquire a new customer than to retain a current one. That’s why most brands try to take a measured approach on how they are marketing, with communications targeted to acquire but also to retain guests. It just makes financial sense to focus on maintaining and developing loyal customers, particularly when you consider that a current guest spends on average 67% more than new customers.
One tactic is understanding where these existing guests live in their brand journey and segmenting them based on habits like spend, frequency or even based on the sku level items they like to dine on. Immense insights can be gleaned from these very simple data points. What is even more interesting is the sales trends when brands choose to segment based on channel engagement. That’s because how your guest engages with channels can speak volumes about their habits but also may be the key to reinforcing new behaviors.
Based on our study, around 58% of restaurant guests choose to frequent restaurant locations just via on-premise dining. This means they only choose to dine-in, as opposed to utilizing online ordering options like online ordering, delivery, or curbside service. This is challenging as low-frequency guests tend to spend less if they only dine-in. With that being said, operators can actually improve check size by promoting and attracting guests to their online channels. That is because the spending of an omnichannel guest (one who dines-in AND orders online) can actually increase check size by 12%, making it a profitable venture with minimum outlay.
For guests with low visits in a quarter, average check size tends to be 12-13% lower than average check size of customers who transact across all channels, including dining in and ordering online.
These guests also tend to have a limited frequency, with a majority only visiting the brand five times or less a quarter. Guests who fit this profile also tend to spend less, with average checks 16-17% lower than customers who transact across all channels, perhaps frequenting the store locations while also utilizing online ordering.
For customers with fewer visits in 90 days ( 1-6 visits ) , the receipt size of users with only online transactions was significantly higher (16-17%) than those with only in-store transactions The difference diminishes when studied for users with very high frequency of check-ins ( > 7 visits) .
In-Store Targeting Can Prove to be the Most Profitable
So with a large portion of your guests within this segment, what are some of the tactics you can use to drive more frequency and a higher check average? The answer is in segmenting this audience (dine-in only) and targeting them with campaigns that move them to omnichannel ordering. The key to this campaign is truly to target guests with the lowest frequency because, based on our findings, those guests are more app to increase their spending based on the new channels they engage in.
Whereas this tactic may prove to help low-frequency guests increase their spend, this same campaign will have little effect on guests with higher frequency with your brand. These more loyal guests tend to already have set patterns of spend and therefore exhibit less change no matter how they are engaging with your brand. In these instances, you may want to look at targeting these segments with campaigns that are focused on experiential offers, exclusive menu items, or other incentives that reward them for their loyalty.
Our study reveals and affirms that the best tactics to improve the frequency and check size is through segmentation and strategic communications that drive omnichannel purchasing. Brands can not only use these strategies to personalize offers to the guest but to establish new habits that improve loyalty behaviors, effectively taking them from average guest to superfans.
If you’d like to learn more about our loyalty strategies or get more insight on how Punchh can help you build the best loyalty program that can attract and retain guests, contact your CSM or our dedicated loyalty strategy team.
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