On Thursday last week I was at Casual Dining Show at Excel and had the pleasure of listening to Peter Martin interview Steve Richards, (soon to be ex) CEO of the Casual Dining Group (CDG) and vice chair of UK Hospitality.
A lot of what was discussed resonated with what we’ve been doing as a business over the last couple of years and, as it’s been a while since I emptied my brain onto paper, it seemed like the opportune moment… So here we go...
It’s tough out there. We all know it, we’ve been feeling it for 18 months and truthfully, 2018 ended up being a bit of a train wreck with some major names either going through CVAs or into administration or simply freezing budgets. Airship didn't escape some major hits but the experience actually clarified some thinking for us and we launched our gift card platform, Toggle and remodelled our Airship CRM proposition.
Steve talked about a margin reduction of 20% from the heady highs of 2016, an increasingly competitive environment with rollouts slowing to a crawl of new locations. Footfall on the high streets is down by 5-6% and trade in the shopping malls continue to decline. Let’s not even mention business rates, the living wage and… Brexit. But it’s not all doom and gloom...
So, how can businesses survive and maybe even thrive? Steve talked about diversifying revenue streams, explicitly delivery, digital, partners and the need to leverage brands. CDG have rolled out two ‘virtual’ brands ‘Stack and Grill’ and ‘Mac Shack’ on Deliveroo and UberEats. Taking the dark kitchen concept but actually utilising their own kitchens in some of their locations to fulfil orders from the new brands. It’s clearly early days and Steve wouldn’t be pressed on the success of this, however he acknowledged that delivery was here to stay - it now accounts for 3.5% of revenue in the sector - which is significant.
He also talked about the importance of partners. They are growing on the back of partners and they have a thriving concessions business, as well as working to expand abroad through franchising and by opening up with operators such as Center Parcs.
Finally, he talked about digital and the importance of leveraging CRM, working with partners and investing overall in digital in the business. Which is a nice segway for me...
It was all interesting stuff, however, CDG are a big old beast of a business with 282 locations and a fair old amount of resources. So how can smaller operators make more of their opportunities? Before I get into some of the stuff we do for our clients, I saw recently that a brand that I’ve been following with interest called Bear had teamed up with Jack Wills. It’s a great example of brand opportunity, you can read more about that here.
So, how can you look to diversify your brand, focusing down on the different opportunities? We like to break it down as follows when we are thinking of new platform tools or advising on strategies for digital activity:
Opportunities: Walk-in / Pre-booking / Party / Events / Gift Card / Experiences / Takeaway / Delivery
For us, some of these channels are distinct sales opportunities, they need some thought to ensure that you maximise on the returns. They also provide a Proof of Presence (or PoP as we like to call it), that enables you to understand purchase frequency and recency. Once you know this you can truly start to measure and then change your customer’s behaviour.
Let’s run through each in turn and I’ll do my best to give some easy examples of how to leverage your marketing activity to drive each, in turn, to drive up your PoP scores.
Walk-in - By consistently pushing out good shareable content and a consistent brand message you keep your customers engaged. Storytelling was all the buzz a few years back and it's still relevant. Ensuring that you have good content that will resonate with your customers and keep them engaged with your activity. You’re really looking to keep in people's minds and if they are promoters, then they’ll drive word of mouth and are likely feed the other opportunities. The key here is that not every message needs to be an offer or voucher if you automate messaging to drive other sales opportunities.
Another key to grabbing the passerby is to ensure that your Google place page is up to date and you are responding to feedback through that platform. Google finally seems to have nailed down their review channel and customers are using maps increasingly. According to Feed it Back, 64% of reviews now sit on Google and it’s increasing.
Pre-booking - If you understand how frequently a customer visits (utilising not only booking but also WiFi & other channels) you can try to change their behaviour by triggering marketing based on that last visit date. It might be that your average customer visits 6 times a year, if you can make that 7 or 8 it’s significant. It's very straightforward and you’ll see a theme here that marketing automation is the absolute key to drive significant revenues.
You can drive referral traffic from partner businesses around you such as hotels and businesses that have visiting team members. Implementing a referral program shouldn’t be costly or onerous in operation and can drive significant returns.
Party // Occasion - It’s a bit of a no brainer. Whether you can cater a function for 80 or just focus on a birthday celebration for 4-8, occasions need some thought, but don’t delay. We often despair when clients upgrade brand or pricing and are slow in getting the updated artwork and emails live. It’s lost revenue, plain and simple, with the added negative that the customer may have been expecting something special from you…
A single birthday email will not suffice, start 4-6 weeks out and count down to the customer’s special day. Suppress broadcasts against your booking data so you don’t deliver a negative brand experience and ensure that you showcase what you have - start with the big opportunity and work down. If you want to do a walk-in giveaway, let the customer redeem it up to 2 weeks past their special day and utilise unique codes so you know it's been issued and then redeemed (you can remind a customer to redeem a code up to the last day it’s valid).
Event / Ticket Sales - When running speciality evenings, fixed menus, community events or entertainment, think around the box (I’ve nicked that from Steve). On my travels, I’ve seen yoga classes, life drawing, knitting circles, flea markets, all wonder of events in my client’s venues. Drawing in new customers, making use of all hours of the day. The key to this (in my opinion) is the pre-sold ticket, how you can you get your customers to commit to an event by pre-buying.
Gift Card - A gift card is a product that can be sold. It’s pre-sold revenue, it's in your bank just waiting to be cashed in in the future when hopefully a brand new customer will visit with friends and ‘premium up’ as they’ve got some ‘free’ cash. There's a couple of tips here 1) Encourage the card recipient to register their card, this means that you can push for opt-in and get them into your email programme. 2) Automate messaging to the customer following use of the card to encourage them to top-up.
Experiences - Really a spin on a gift card, experiences can be Gin Masterclasses, Afternoon Teas or simply a Fish and Chip Supper. Leveraging your social channels and database at prime moments (say 6pm on Christmas Eve or at 7am on Mothers/Fathers Day morning) will drive great sales (as well as solve a problem for your customers...).
Takeaway - If you are doing delivery then you should offer Click and Collect (or Carry Out as they call it elsewhere), it’s incumbent on the customer to come and get it and then get it home. You save a huge amount of margin on the commission and you are doing it anyway. Automating marketing against the last purchase date or simply firing out messaging at 4pm in time for them leaving the office will drive early evening business.
Delivery - You don’t get customer data from Deliveroo or UberEats, however, you can attach something to the packaging to engage with the customers. Once you've done this you'll be able to market to those customers at key times to convert customers to click and collect saving them the fee and you a chunk of margin.
The key to the above is to organise a strategy around your key opportunities, the Welcome Journey is a prime example, its triggered when the customer first joins your database and should consist of 4-8 emails over the first couple of months, the welcome journey can return significant revenues if you keep the marketing personalised (as all your marketing should be) and focus down on the opportunities.
So, briefly, that’s it. Before you start however we recommend that you simplify your efforts across your data collection channels for your customers’ sake, our Chief Design Officer Andrew penned his own thoughts on the ‘Value Exchange’ which you can read here.