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The Future of Restaurant Marketing: Are You Ready?

Credit: Deloitte Digital

The role of the restaurant CMO has never been easy—and it's not getting easier. Beginning with online ordering, CMOs have found themselves at the epicenter of digital transformation. This seemingly simple step has exposed inconsistencies between locations and regions across a highly distributed system with hundreds or even thousands of independent owner-operators. In a predigital world, this wasn't much of an issue. However, solving for these issues today is flush with opportunity as marketers vie for loyalty in an increasingly competitive marketplace.

Despite the challenges, digital has already started reaping rewards. Online ordering alone has increased the average order size 26% over walk-in or call-in orders. But the potential of digital extends much further than online ordering and delivery. We now have the tools to know guests' habits, link them with commodity pricing, weather and other sources of data, and use these inputs to market to guests in unique, localized and personalized ways at scale. At least that's the vision. And it's a huge leap from where most brands are today.

Realizing that vision will likely require major organizational shifts for restaurant brands—internal and external alignment, new partnerships, and data and technology transformation, among other areas. But the opportunity is huge. Right now, even the most sophisticated organizations are still in the process of mastering online ordering. Many brands just turn on a new marketing channel and remain unclear on how to use digital to transform the business and move the needle on guest frequency, retention and new guest acquisition.

To take advantage of digital opportunities, restaurant brands should think and do things differently to get ready for the future of the industry:

1. Align your franchisees and general managers around a new goal. Historically, brands have focused on traditional media and mass marketing, leaving local marketing to the restaurants if it's even done at all. This has resulted in different approaches to marketing at the restaurant level. Operating this way in a digital world presents challenges if you're trying to personalize marketing and deliver no matter which location your guest selects.

Anyone who has worked with franchisees knows that forcing change rarely works. Success generally requires demonstrating the value to the guest, the brand and, most importantly, the franchisees. Once the value has been established and the system set up for general managers and the owner community, those tools, templates and some freedoms of experimentation can be a recipe for success. Don't forget that some of the best ideas and creativity come from the front lines. The most effective approaches balance edge innovation with centralized oversight and governance.

2. Master your data-technology ecosystem. Enabling these new marketing approaches requires new technologies and data mastery, and it's easy to get distracted by the wide variety of vendors and platform options. To arrive at the best solution for your organization, it helps to view these new technologies and platforms as an ecosystem, evaluating how they will work together and enable your goals. This can help you get to the level of integration needed to gather insights about guests over time, which in turn allows you to better target customers at the right time with the right offer.

Developing your ecosystem will also help you avoid losing critical guest data to a third-party black box. Your data is an asset that the entire organization should understand and mine for insights.

3. Integrate your front-end experiences with back-end functions. This has never been more critical. It also goes well beyond the table stakes of establishing operating protocols for online orders, designated pickup stations and customer signage. We're talking about integrating your website and marketing content with store operations and supply chain. This is where the opportunity is. And it's also where things get much more difficult.

Very few brands today can make promotional and buying decisions based on movements in commodity pricing. Imagine if beef prices spike and chicken prices fall; quickly pivoting and driving promotions and offers that recognize this change requires the coordination of the CMO, CIO, COO, CRO (restaurant officer). The challenge is to move toward dynamic, personalized marketing that accounts for a variety of factors such as weather or commodity pricing that requires a much higher degree of organizational coordination as well as a data-technology ecosystem that supports it.

4. Shift your lineup of marketing support. The partners you bring in to help implement this new way of working can be the fuel for driving innovation and accelerating your digital programs. In the past, CMOs have tended to work with traditional creative agencies and a handful of technology vendors.

Restaurant marketers will likely need to implement new processes and make hard choices. This requires deep industry expertise in addition to a broader set of capabilities. Success is not just about creative, data, technology or organizational execution—it's the intersection of all of these things, and your partners in transformation should be experienced in handling that at scale.

5. Shift your culture. At the end of the day, all these changes will likely require a fundamental cultural shift. We're moving into a new frontier for the restaurant industry, where not all the answers are clear. Success in this environment will require a culture of testing, learning and experimentation in order to unlock currently unknown potential. This isn't necessarily a new idea—some digital companies test dozens, if not hundreds, of ideas each day. For example, Uber's Experimentation Platform runs hundreds of tests daily that it then incorporates back into the business at a pace many in other industries can hardly fathom.

This goes well beyond marketing. It can start in any part of the business, but in my experience, shifting the culture is something that takes leadership at the highest level.

The crux of the challenge is that digital exposes all the variances across a system of restaurants. It's forcing this highly distributed environment to come together and operate more closely than ever before. The restaurants that realize this vision will likely benefit from more than larger check size; they'll see gains in frequency, retention and new customer acquisition—in other words, winning the loyalty game.

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Deloitte refers to one or more of Deloitte Touche Tohmatsu Ltd., a U.K. private company limited by guarantee (“DTTL”); its network of member firms; and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the U.S. member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.
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