Case Study: Restaurant Uses Customer Data to Measure Marketing Success
At Ping Pong Dim Sum in Washington, D.C., Myca Ferrer works hard to make sure every dollar spent on marketing is measured and tracked. By tying Venga‘s loyalty platform into his restaurant’s POS system and email marketing database, Ferrer is able to track customer spending patterns and email click-through rates. He’s found that loyalty club members spend between 30% and 40% more per visit than non-loyalty club members, and says his targeted email campaigns regularly get click-through rates between 75% and 80%.
Tell me about some of your biggest marketing challenges.
Most restaurant or hospitality groups have limited time, resources, and capital. You have to make sure that every dollar that’s going out is going to be trackable, or [that it] gives you some measurable return on investment. For us, I think the biggest challenges are turning that awareness into trial, and turning that trial into calculated revisits. We have 4,000 people coming in to eat each week. How many of those are we going to see next week, or what’s preventing them from coming back tomorrow for lunch? Understanding consumer behavior when we appeal to so many different groups is hard. The group of guys coming in for lunch — do they need a private meeting space, or is our style of service too intrusive? Really understanding customer behavior is a challenge for us because we have so many different people and they all have separate needs.
What platforms have you used to try and understand those customer needs in the past?
We’ve done commercials in the past and we’ve done print advertising, but I think where we sit now is we know maybe four groups that we want to go after, what their emotional needs are, and how they want to feel when they come in. Maybe the girls want to feel cosmopolitan and indulged, and they respond best to our cocktails. So it’s about creating campaigns that feed into those emotional traits. Our database and data collection are really important. In everything that we do, we try to have a data component so we can create better lists and have email campaigns that reach out to people and engage them in a way that are specific to their needs.
What platform do you use to manage your email database?
It’s called Sign-Up.to, which is essentially the same thing as a Constant Contact.
What made you want to go with Sign-Up.to?
Ping Pong [is] based in London, and all the other international territories [are] in the Middle East and South America, so we all use the same one. It just makes it a bit easier for us, for exchanging templates and that type of thing. It’s a collective decision.
I know you use Venga for your loyalty program. How did that partnership come about?
They approached us back in January with their loyalty platform, after we [had already] worked with them last year. They had an iPhone application that was like Foursquare meets Yelp meets Groupon. Based on where you were, restaurants and other retailers could tell you about specials. We worked with them originally when they had that application, and then they approached us in the beginning of this year with their new loyalty platform.
We liked it for a few reasons. It was completely mobile, including redemptions, so that was big for us. I think it’s important to make it as easy for guests as possible, so they don’t have to remember to bring their swipe card or anything like that. They pitched a good angle to us, [which was that] we were going to be able to customize the program to be consistent with our brand image and make sure the tone was the way we wanted it. It’s not like a punch card, where other restaurants give money back. We are really encouraging [guests] with experiences. Some of the offers that are connected with the loyalty club go all the way from a mixology demonstration to [rewards where] we will purchase a trip for you to visit the original Ping Pong in London.
How do you encourage guests to sign up for the program?
They will hear about it or see it three times over the course of the meal: Seeing the visual when they walk in, hearing about it from the server, and once again before they leave. I think the easiest thing that we’ve found is with the servers or bartenders. As soon as [guests are] seated, we’ve incorporated, “Have you heard about our loyalty club,” into [the server’s] introduction. And this is connected with the visuals. We have a specials brochure that we keep on the table, and there’s a section in there that they point out when talking to guests about the benefits of joining the loyalty club. So, if they haven’t seen it from the [window] decals, the guest hears about it from the server, and then they’re reminded again when they’re leaving on their itemized receipt. [Venga] is connected to our POS, and all a guest has to do is see the unique code [on the receipt] and either text it or enter it into our website. That tracks all the information, the points are loaded, and it’s all saved.
Was it important for you to find a loyalty program that integrated with your POS?
Being able to integrate with the POS, that’s where the money is. They provide us with a dashboard where we can see everything, from the frequency that they’re coming in, to their experiences with their servers. [Venga] provides us with everything we would want to know. It was a very seamless installation for getting their program and script onto our POS.
Now that you’ve been using Venga for a while, what kind of ROI have you seen?
At this point, we’re seeing about 10% of total revenue being associated with our loyalty club. The average spend of our loyalty club members versus non-loyalty club varies between 25% and 40%. I think it would be more accurate to say 30% to 40%. We’re able to calculate the lifetime value of our guests more accurately, and we can engage with them in ways that we weren’t able to before. We can see this on the dashboard — Stephanie came in on Monday last week, two Mondays before that, and two Mondays before that. What is she ordering? We can see the check, and maybe that she’s always dining with a party of three. So how can we get her to come in for a date night on a weekend, and what sort of email campaign can we create to get her back on Thursday, Friday, or Saturday night? That analytical tool has been very, very helpful.
It sounds like your customer analytics and your email campaigns are really closely tied together.
They are, and our click-through has also been phenomenal. We’re talking 75% to 80% click-throughs on our campaigns, where I think the industry [average] is 18% or 20%.
It seems like you put much more emphasis on customer retention than customer acquisition. Why is that?
Well, there’s a difference between push marketing and pull marketing. I think with things like loyalty or social media, people are buying into your brand. When you’re looking to develop or build your business, you want to [target] the group of people you know are going to care. There’s no doubt that bringing droves of people into your restaurant can be achieved almost effortlessly with a platform like Groupon, but how many of those people are you going to see again? Maybe it’s all of them; maybe it’s none of them. We don’t know, but we like to go into things knowing, and this lets us do that.
Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.
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