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Your Customers Are Your Best Weapon In A Recession

By Mark Buonagurio, Managing Partner, Retail Automation Products

Everyone can agree that the deep recession we entered in the fall of 2008 is still stubbornly still upon us. Although the government tried to help, and at great cost, it’s obvious these measures have fallen short. It’s time to take charge of your own solution. Most operators don’t realize the full potential of their existing customer base. Not only does this base provide a steady stream of revenue, but it can also provide valuable insight into what your customers want. Knowing what your customers want is key to increasing brand loyalty and visit frequency, thus maximizing revenue capture per customer.

Connecting with customers has never been easier. An enhanced wave of new customer centric technologies in conjunction with a host of social media services can provide you with the tools you need to make the most of today’s less than ideal market. For starters, you need to start asking yourself some simple questions:

What does my customer base look like?

How often do they buy from me?

When do my customers buy from me?

Why do my customers buy from me?

What do my best customers have in common?

What types of items do my customers prefer?

What are my most profitable items?

What do my customers care about most?

The question is: How do I gather all this information? You probably already have many of the answers, but some small additions to your technology infrastructure will enable you to “fill in the blanks”. Most hospitality operations are already using some sort of computerized POS system. These systems can provide general information regarding your customers’ buying habits, but we need to drill down further to each individual customer and understand what drives them to you. There are several methods you can employ to know your customers better, and touch them more often:

1.    Customer Surveys

2.    Loyalty/Gift Card Programs

3.    Social Media (Facebook, Twitter, Blogs, etc.)

4.    Newletters

Customer Surveys are a great way to obtain valuable feedback from your customers. These surveys can be implemented as part of your existing POS system, or they can be managed through an online service such as Constant Contact or Vertical Response. It’s important not to make the survey too cumbersome to complete. Take a conservative approach, but don’t be afraid to encourage feedback on the bad as well as the good. Customers tend to be very honest in blind surveys since their identity is usually not known. Do not burden your customers with a constant parade of surveys. Target their use for specific pieces of information. Depending on the nature of the survey, you might also offer a thank you for participating incentive. This might be a small discount on their next visit. Surveys are cheap to implement, and can provide immediate feedback on your customers.

Loyalty and Gift Card programs can have a dramatic impact on driving customer business. Many operators have a misconception about such programs, and simply consider them discount or "freebee" mechanisms that will cheapen the value of their brand. Loyalty programs are not about giving away free stuff. They are a way to get your customers to buy from you when you want them to buy from you, and to buy the items that add the most to your bottom line. Loyalty programs are easy to implement. They typically require software that may already be part of your existing POS system, or they can be managed through one of the many third party loyalty program providers. Once started, these programs can provide a broad range of customer information that can be used to target your marketing efforts. NRA recently posted some interesting statistics regarding the use of loyalty programs:

41% currently have an active loyalty program

47% plan on launching a loyalty program soon

77% said loyalty programs helped drive business during an economic downturn

9 of 10 said loyalty programs give them a competitive advantage

84% plan to increase their program investment in 2010

74% use some form of social media to help support their loyalty program

When starting a customer loyalty program, it’s best to start simple. Remember, the initial goal is to get maximum participation from your customers. You can always build upon your initial programs down the road, but you won’t be able to “read” your customers if they are not part of a program. Once you get a program up and running, you’ll have a valuable tool in your arsenal; a database that profiles each of your customers. This database can be used to target specific customers with precise messages through the rest of your marketing efforts.

I’ll never forget my first tweet! I thought I was too old, but it was gentle. Sorry, I lost myself. It’s safe to say our society is totally immersed in Social Media. Whether you Twitter, Facebook, YouTube, Flickr, or Blog, there’s no denying the power these new technologies bring to the table. Recently Facebook surpassed the 500,000,000 user mark worldwide. When you consider time in the market, that’s an astounding number of users. It’s time to get in the game. Create a Facebook page. Try to keep your page engaging by adding resources from sources like Zagat and OpenTable. Creating and promoting events through your page can lead to a hot topic going “viral”, which can substantially drive additional business. Post pictures from recent events to a Flickr account and link that to your page. Drive day part traffic through the strategic use of Twitter. Measure the results and don’t be afraid to think outside the box. It’s important to stay targeted to your message. Oversaturation can and will turn customers off. Promote customer feedback on new items, experiences, etc. It’s never been easier to get involved with these new ways to communicate. However, the alluring “instant gratification” nature of these technologies can quickly become a distraction to your business. It’s important that you schedule time to managing these methods, and not allow yourself to be consumed by them. Social media should not become your business. It should simply enhance your business.

Newsletters, whether monthly or quarterly, are a great way to build your brand. When done correctly, they create a sense of anticipation, something your customers will really look forward to receiving. They are a consistent way to speak to your existing customer base, providing a platform to launch new programs and engaging topics. Establish a look and keep it consistent with the colors and logo of your concept. The easiest way to get started is through an online provider like Constant Contact or Vertical Response. These providers offer dozens of ready to go templates that just require you to add content and go. As with most of the techniques mentioned in this article, it’s best to start slow and build over time. Start with a quarterly newsletter and keep it interesting. You might want to showcase your upcoming menu with background on the dishes and ingredients. Spotlight a stellar vintage you’ve uncovered, or tell an interesting story about you or an existing customer that you found engaging. Including a favorite recipe is a great way to bring your brand into the homes of your customers. This is an opportunity to tell your customers “Yes we hear you, and yes we care.” It strengthens the relationship you already have and reinforces your commitment to your customer experience.

In closing, by no means are the suggestions listed a silver bullet to the woes of a bad economy, but they can help boost sales with a surprisingly small amount of effort. Other possibilities exist as well, but these are proven to yield results quickly. No one knows when the recession will truly be over, and that’s why it’s important to get proactive about your business. In most cases, the answers are sitting right in front of you.

About Mark Buonagurio

Mark serves on the advisory boards of several startups, and has been a guest lecturer for the Society of Food Service Managers and the Institute for Culinary Education (ICE). He is often sought out by investment groups for opinions related to the state of the hospitality industry. He continually seeks out new opportunities for growth, and remains a creative force at RAP PoS. Mark believes New York City offers a wonderful balance of both business and pleasure, where he now resides with his wife Debbie, and two young sons Evan and Dean.

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