By embracing data analytics, restaurants can personalize service and potentially cut ties with third-party services.

Do you remember when your favorite eatery, the one you took for granted, closed its doors amid COVID concerns and mandated lockdowns? A casual dine-in experience, let alone a special one, was suddenly out of the question.

The past year was a dark time to be sure, but crisis can create opportunity. The pandemic has forced rapid transformation industrywide. To stay in business and get restaurant staff back to work, smart establishments were quick to embrace new strategies or build on those already in place. By effectively leveraging data to set priorities, pursue defined goals, and nimbly refine processes with metrics, restaurants are moving from survival mode to competitive advantage. Customer data, especially that which is aggregated over time as part of a restaurant’s loyalty program, fuels analytics and creates insights. Those insights, in turn, tackle everything from marketing and menu choices to staffing and operational decisions that impact the bottom line.

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Even as dine-in restrictions have begun to ease, takeout and delivery have taken hold as the new norm. This has resulted in some 40 percent of restaurant operators adding tech solutions to accommodate contactless and mobile payment, now essential for addressing concerns and preferences around dining out. A lifeline of sorts, but it is the ready availability of customer data that has helped many eateries step up their efforts to deliver an experience guests appreciate and repeat.

The new digital reality

With a newfound focus on data, digital ordering and delivery have emerged as key to survival and perhaps even lasting recovery. According to a recent report by consumer insights firm Incisiv, curbside pickup adoption has experienced a five-fold increase while home delivery adoption has more than doubled since the first quarter of 2020. Rather than relying on the costly services of third parties, restaurants today can easily use their own data technology to entice patrons, keep staff employed, and turn a healthy profit.

Analytics can illustrate how these orders are being placed and how they impact business performance. Perhaps your customers prefer pickup versus third-party dispatch. By looking at things like dayparts and days of the week, a restaurant can identify menu items that are trending and even which orders are coming in directly or via third parties like Uber Eats or Postmates. This data can be broken down further to show what percentage of orders come from third parties and how those transactions affect profits. With greater insight, restaurants can choose which third-party services to focus their resources on, which digital vendors to eliminate, and whether they should bring delivery or digital ordering in-house.

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Adding analytics to your plate

Even with all these advantages, data analysis presents a very real challenge for restaurateurs. When you’re well-versed in things like menu development, guest experience, and day-to-day operations, data science is likely low on your resume. In fact, data terms like index scores or percentage ratios may sound like they don’t even belong in the foodservice industry.

While management knows data is important and they need it, they often don’t understand how to access or use it. It’s time to make data more approachable and personalized.

Data visualization brings it all into perspective, regardless of proficiency. When you can see that one line on a chart is bigger than another, you’re using descriptive analytics to make straightforward assessments based on what’s on the screen. While descriptive data analytics allows organizations a basic level of insight, predictive analytics gives restaurants actionable intelligence that predicts likely outcomes. Prescriptive analytics goes further to recommend ideal actions to affect such outcomes.

For example, more approachable data offers restaurants personalized insights (such as the frequency of visits and amount spent during each visit) on their most important patrons. The marketing team can use this information to develop compelling campaigns that speak directly to those patrons.

Serving up the data

Being able to view a dashboard and determine a best guest profile affords management a point of clarity in which they can connect marketing to ROI. For instance, if sending a breakfast offer to e-club members brings a significant increase (or decrease) in morning sales, the team can examine the campaign to better parse out what is working and what is not, and then tweak elements for better results.

Customer clustering and segmentation play a large role in this aspect as well. By visually representing how many people move from basic customer status to MVP, organizations are able to tie back the actions customers are taking to the marketing and how it is impacting the restaurant’s bottom line. If you’re converting more people, you can show you’re getting, say $30 more per bill, and an additional visit. As a result, the restaurant is taking a smaller hit on discounting. This can all be quantified in smart, real-time reporting that is intuitive to your needs.

Analytics: a recipe for success

Early in the pandemic, there was the hope that everything would just go back to the way it was before. But that just hasn’t been the case in any industry. For restaurants, in-person dining took a significant and potentially permanent hit. People have grown accustomed to online ordering. In fact, Incisiv projects that online driven sales will continue to grow and reach 54 percent of the industry by 2025, which is significantly higher than pre-COVID estimates. Similarly, Incisiv forecasts that the share of delivery is expected to grow to 23 percent in 2025 versus the pre-COVID forecast of 15 percent.

Customers now expect the ability to interact with restaurants on their own terms, be it online, in person, or some combination of the two. Using data analytics for personalized marketing communications empowers restaurants to continue extending that personal touch. By understanding what patrons like and anticipating their actions, eateries can surprise and delight guests through meaningful marketing communications and delicious food that hits the spot.

Amir Orad is the CEO and chairman of the board at Sisense, a big data firm that infuses analytics into business applications, workflow, and products. Co-contributor Andrew Feigenson is the CEO of Personica, a marketing and analytics platform serving the restaurant industry.

Feature, Technology