RTN Workgroup: Segmentation & The Importance of Asking the Customer

The Restaurant Technology Network (RTN) hosts think-tank style workgroups every two weeks on a variety of hot topics facing the restaurant industry.

During RTN’s recent “Winning the Customer'' workgroup, while collaboratively defining best practices, the team came across a critical issue related to marketing segmentation. As we were discussing the importance of segmentation and customer preferences, we stumbled across the idea that peak maturity should not be limited to typical behavioral data many restaurants rely on when marketing to their most loyal customers. 

The group concluded that while one of the more popular terms in marketing personalization is “1:1 marketing,” maybe it’s not the best descriptor for peak maturity. Instead, peak maturity may center on listening to your customers and recognizing behavioral changes, while engaging them directly to update preferences. 

"One of the biggest benefits of segmentation, as opposed to personalization, is that you can tokenize the individual and start to place the look and feel and tone and manner of that person into a segment,”  said Robert Peterson, Area Vice President, New Business North America, Oracle Food & Beverage. “What you're ultimately trying to do is to build these segments so you have lookalikes. And so, rather than doing 1:1 marketing, you're really marketing to a segment… You don't even need to know who they are. You just need to know how they act or what they look like. From a best practices and compliance standpoint, it’s a more effective way to market.”

For example, even some of the largest restaurant brands overlook food preference personalization. A huge opportunity exists to improve upon the customer experience by simply honoring food preferences when marketing. 

Ask customers directly upon sign-up, for instance, to indicate if they are vegan or if they don’t eat beef (aka, zero-party data). Then effectively utilize that data to suppress beef-related campaigns for those customers. With this one simple correlation tied to thoughtful action, restaurants can demonstrate more personalization than the vast majority of their competitors.

“Let’s say you’re a burger place and sending out a buy-one-get-one burger special. If half of the people you just emailed are vegans, you just lost half of that marketing budget,”  said Eric Soll, CEO, of Soulman Marketing. “Understanding your customers, what they’re ordering, how they’re ordering, what their food preferences are, whether or not they’re a family. Really understanding segmentation can lead to personalization."

Additional examples of zero-party preferences you could ask your customers to add to their profiles:

• Allergy information
• Daypart preference
• Home store
• Whom do they order with most frequently (individual or family/friends)

While behavioral data (like what someone is browsing on your site or app) is relevant, it should be weighed against what the customer has indicated as their actual preference. Consider that many customers purchase for others inside their own accounts. Oftentimes, personalization tools & automation will rely too heavily on that behavioral information - instead of what the customer has told you they prefer. 

I pointed out that segmentation is challenging because it can add a layer of complexity. When it comes to wanting to do something like offers on top of segmentation, you’ll need to have some rules in place or something built into how you’re generating the offers on top of it. As an example, you don’t want someone to fall into multiple buckets and get six amazing offers, so you need to find a smarter way to ensure they can only get the best of the offers.

So how do you know what the customer wants? You ask! One of the most worthwhile ways to personalize your customer experience intelligently is to design surveys & additional thoughtful input opportunities. The goal should be to put customers in control of their own personalized experiences. Only then can you truly stand above the competition, while being a good steward of the personal preferences your customer has opted to share with you - in hopes that you’ll get it right.