The growth of fast casual chains is one of the most important trends in the restaurant industry in the last decade. The success of their format is based on a combination of fast food-like efficiency and consistency, high-quality affordable choices, and the ability to always be in tune with their customers tastes, ready to adapt to ever-changing trends.
One thing that all successful chains have in common, regardless of their model is the use of data, which they constantly collect, analyse, gather insights from and act on.
For independent establishments that are struggling to keep up with their competition, this use of data may look like an unfair advantage.
In a small restaurant, one or two people are typically in charge of all marketing and operational decisions. Spending a lot of time working with reports – except for the essential ones – is often a luxury they can't afford. What's more, independent restaurants won't generate as much data as the McDonald's of the world.
On the face of it, that’s all true. Fortunately, however, data doesn’t have to be ‘big’ to help a small business grow. Quite often, ‘big enough’ is more than enough.
You collect more data than you think
In fact, if you’re an independent operation you’re likely sitting on a decent pile of data already, especially if you also use a reservation and table (or guest) management application on top of a POS system.
Let’s look at the three of them briefly.
A reservation system is your connection with the outside. It manages reservations on the customers’ end, collects their information and updates the customers database. On the marketing side, it can also help you manage newsletters and email campaigns.
A guest management system gives you real-time updated status of each table, making sure your FOH is organised and service is as smooth as possible for staff and customers.
Now, let’s look at the typical steps your customers go through when they dine at your restaurant: they reserve a table for themselves and other people, show up at your venue, order, eat, pay and leave.
With the use of the three management systems above, you will collect information at each step of the way, such as:
- Customer’s name, email and phone number
- date and time of the reservation
- Total number of people
- Whether it was a late arrival or a no show
- Total time spent at the restaurant
- Days since last visit
- What food and drink they ordered
- Total spending
- Any voids, discounts or refunds
The best part is, this is all passive data collection, which means it’s information your customers will provide just by going through the process, without any extra request from you.
One last – but quite important – source of data is your FOH staff, who can manually add comments (like ‘allergic to peanuts’ or ‘prefers window table’) or tags (like ‘regular’ or ‘VIP’) to your table management system.
What to do with all this data?
Data-points are like dots on a blank sheet of paper: they will make no sense unless you connect them. The more ways you’re able to do that, the more insights you will get.
However, one natural limitation of your management systems is that none of them will know everything. The table and reservation systems will give you present and past information on your guests but tell you nothing about what they ordered and how much they spent. The POS system, on the other hand, can slice and dice your sales data in every possible way, but it will be all anonymous.
The problem is, these systems often don’t communicate with each other. The POS in particular is usually disconnected from the other two.
The importance of data integration
This is where data integration comes in. For a small restaurant, data integration is about putting together sales and customer data and merging them into a new database. That means correlating your menu items to different categories of customers, such as families, groups, office workers, solo diners, couples, etc. This way, it’s possible to uncover new dining patterns and get a much wider picture.
There are two immediate benefits you’ll get from that: better marketing and better customer service.
Get to know your customers better
When you integrate your sales and customer data you can have new insights into
- How much your regular clients spend with each booking and the average per person.
- Regular customers who haven’t visited for a while and the potential revenue of winning them back.
- Food preferences and dietary restrictions: With data integration you can start to see patterns regarding food preferences and restrictions related to intolerances or allergies.
- Dining habits: These could be about preferred dining times and days of the week, number of people per booking and whether habitual tablemates are family, friends, family, spouse, colleagues etc.
Armed with this information, there are a few simple marketing actions you can take.
Birthdays. If you have a ‘happy birthday promotion’, customers will gladly provide their birth date when they sign up with your reservation system. However, if you also know their dining habits, you can make your promotion more personalised.
Customise win-back offers. When you have regular customers – especially the VIP ones - you haven’t seen at your restaurant for a while, you can send them a ‘come back offer’ based on past food choices.
Know when to give rewards and perks. If customer John has lunch regularly at your restaurant with the whole family every other Sunday, you want to give him good reason to keep coming with perks and discounts. Again, these could be based on their preferred items.
Promote special events strategically. Vegetarian customers won’t be much interested in an email about your upcoming Argentinian BBQ night. However, if plant-based diners are a significant part of your regular customer base, you can consider organising a vegetarian food event.
Promote dishes to specific customers. Once you know your customers’ past food choices, you can be even more granular with your marketing, directly promoting items they order regularly. It’s a good opportunity to push other items on the menu and give them a good reason to keep visiting your restaurant.
Of course, you could do many of these things without any integration between customer and sales data, but in that case your effort would be much less personalised and therefore less effective.
Improve your customer service
When, at the end of a shift, you see in the reports that a customer sent back an item or complained about the slowness of service, the best thing is to reach out to them as quickly as possible, before that becomes a negative review.
However, if you have a full picture of the customer’s past visits, you can add more context and be more effective when you try to make up to them for what happened.
Ask for feedback directly. Even if there was no particular issue during service, asking for feedback directly is a good way not to rely on anonymous comments on review platforms. Of course, you could send a generic “How did we do?” email. But what if you could mention some of the items they actually ordered?
Explore new connections. These are just a few examples of what you could do when you integrate POS, guest and reservation systems, but it doesn’t stop here. Once you start to see new patterns, it won’t be hard to come up with other ways to promote your business and grow your bottom line.
Must-haves of a POS integration solution
When you decide to invest on an integration solution, there are three very important things to look for.
Flexibility. The integration solution you choose should be able to work not only with your POS systems, but also with most other providers, in case you choose to switch to a different one in the future.
Data security. When you connect your POS system and customer database, you’re creating a new set of data which is twice as sensitive, as it includes sales and customers’ personal information. The integration provider should therefore have a solid cloud-based infrastructure.
Privacy protection. The integration solution will need to take data protection very seriously, without even contemplating the option of selling or sharing customers’ data with other parties.
You’re never too small to benefit from data
For small independent restaurants, competition from organised chains has become more intense. Good food, excellent service and reasonable prices went from being the recipe to success to simply the entry ticket in the restaurant business.
Now that the bar is set much higher, what really can make the difference for small establishments now are effective marketing and attentive customer service, and both are based on data.
The good news is, rather than adding new and expensive infrastructures, independent restaurants can simply make the best of the data they already have by integrating their existing management systems.
Integration allows small business owners to make sense of data in new ways and drastically improve their marketing and customer service. Without spending hours on end fiddling with reports, there are actionable insights they can get right away and with little effort.