RestCon Recap: Predictive Analytics Vital to Restaurant Marketers and Operators
If the restaurant industry has a pulse, right now it’s pumping lots of data, predictive analytics, and insights through open APIs and intelligent technology. MarketingVitals had their fingers on that very pulse during their RestCon Conference in Plano, Texas last week.
During the two-day conference, marketing, operations, and financial executives from familiar brands like Four Foods Group, Del Frisco’s, and Front Burner Restaurants provided perspective on issues and challenges facing the industry and their restaurants through the lens of data and analytics.
HotSchedules’ very own Tammy Troutman, Sr. Director of Partners and Alliances, was invited to a panel discussion on the win-win data partnerships necessary to keep the ongoing push and pull of data flowing through the multiple systems required to stay ahead in today’s tech-first restaurant environment.
Here are some of the key takeaways from our time at MarketingVitals RestCon 2018:
Delivery … A “Four” Letter Word
Consumers really do demand. And every panelist duly noted they’re doing their fair share to deliver on the demands of off-premise diners.
The rhetorical question on everyone’s mind? Is off-premise really what consumers want when it can’t be delivered with the same level of quality, service, and experience?
“I don’t remember the last you time you could order a ‘date’ experience,” said Andrew K. Smith, Founder & CEO of Four Foods Group. “At the same time, I was just in Abu Dhabi where it seemed like every motorbike was equipped with a carriage to handle delivery … This is a necessary evil that’s impacting our P&Ls … we’re going to have to balance profitability with efficient operations.”
Phil Crawford, CIO of Shake Shack, echoed the sentiment. “The Amazon effect is in full swing,” he said. “We have to adopt and adapt. You have to know what digital innovations you’re going to invest your dollars in next. You have to defend your position as the brand of choice.”
“It’s a value versus relevancy game,” added Jim Balis, Capital Springs Managing Director, Strategic Operations Group. “How long does it take to get from your kitchen to the consumers door,” he asked, making the point that there’s opportunity around packaging, branding, and the method required to get product to a customer’s front door in its intended state.
Personalization & Predictive Analytics
Marketing is a data-ing game. The way marketers need to view and treat their customers feels a little like one big dating exercise powered by serious amounts of data and predictive modeling.
Eric Siegel, author of Predictive Analytics: An Introduction for Everyone, and Wednesday’s keynote speaker, illustrated this point perfectly with a memorable scene from the movie Groundhog Day. In this scenario, Bill Murray’s character collects more and more information testing different reactions from his date. As he learns more about her and gets reactions, he shifts his tactics to get the optimal outcome .. in this case … Andie MacDowell as his girlfriend.
Drawing on predictions gives marketers the insight needed to design programs, offers, campaigns, and experiences that deliver desired results. Predictive analytics also allows marketers to run models to see expected outcomes before they even implement the program.
“Prediction is going to help us all engineer our enterprise operations,” said Siegel. “You’re going to look at one store or at one customer, find similar stores or customers and apply some decision logic to optimize the operations and experience.”
Siegel was also quick to point out that predictive doesn’t mean perfection. “A little prediction goes a long way,” he explained. “You’re making assumptions and testing. Predictive analytics is the antidote to information overload.”
Partners & The Importance of an Open API
It didn’t take rocket science to quickly understand how important open APIs were to panelists and attendees alike. “Best-of-breed APIs are necessary. It’s not possible to pull all of this data together,” noted Smith on the first day.
Crawford took it a step further, stressing the need for a standardized API and SDK across the entire industry. From the audience, Brian Pearson, CIO of Stack’d Restaurants, noted the need for vendors to have a “sandbox environment” available to restaurant developers.
Across the board, vendors are meeting that need with open APIs (HotSchedules does have a sandbox for developers, too.) The key difference was a 50/50 split of just how open, “open” meant. “We have an open API at HotSchedules,” Troutman said during a panel discussion. “We have over 33,000 customers who rely on us – so it’s important that we bring some discretion to the access we give. We take time to vet the vendor or third-party developer who wants access so that we maintain that integrity.”
Hire Outside the Industry to Handle Data Interpretation
To handle the level of data crunching and analysis, almost every brand said they have brought financial planning and analysis (FP&A) and business analyst talent to their teams. For CapitalSpring companies, Balis said they require every company to hire an analyst.
Perhaps, the best perspective came from Michael Mabry, President and COO, Mooyah Burgers.
“Trust me, there’s going to be an inclination to put a fantastic operator who knows the business in these roles … don’t do it,” he said. “We hire talent with economic and financial analyst backgrounds right out of college. They are hungry and crazy, crazy smart. The restaurant industry is attractive because it’s not your traditional financial firm.”
People, Culture, and Engagement
Although the conference centered around consumer marketing and engagement, the topic came back to the topic of people, culture, and engagement.
“[For today’s top brands], you have to be better than mediocre and we see that starting with manager turnover,” noted Wallace Doolin, Founder & Chairman of TDn2K. “Retention is the biggest issue. It’s a market share battle that goes beyond the consumer.”
Smith – whose company continues to grow and add new brands – brought a lot of validity to Doolin’s performance trends. “Labor used to hit around 22-24%. Now, it’s more like 26-27%. But we realized that if we raise people’s pay and provide ongoing training and development plus equity to our managers, we’re in good shape. I’ve had two managers leave out of 140 restaurants in the past two years.”
Experts agreed that the resulting sales from competent, capable, and well-trained managers will offset the rising cost of labor in restaurants.
Loyalty = Convenience & Consent
Brandon Coleman, the recently appointed president at the 18-unit Del Frisco’s Restaurant Group, said that his company focuses on two things: convenience & experience.
“The touchpoints for consumers are growing,” he said. “Facebook just integrated ordering recently, for example. Consumers don’t want to be advertised to anymore. They want seamless integration into their everyday life.”
Loyalty, it seemed, was a market share battle for space on a consumer’s phone.
“You have to be hyper-personalized and you have to honor the fact that the phone is a personal space that you are invited into. As marketers, we have to create non-salesy, story-driven content that still does everything we need it do from a sales standpoint,” said Coleman.
Which brought up the big finale “aha”: loyalty isn’t necessarily a coupon on the phone or a push notification from a restaurant’s loyalty app. It’s consent. Consent to communicate and build loyalty in all the different ways in which consumers want to interact with your brand. That kind of consent requires restaurant marketers to have more information than ever to personalize the right touch, to the right person, at the right time.