Food for Thought: A Year Into COVID, What Defined Marketing Success for QSR Brands?

Food for Thought: A Year Into COVID, What Defined Marketing Success for QSR Brands?

Mid-March 2020, one year ago, was basically the last time we could dine out – without considering the odds of a global pandemic shuffling all our plans. Oh, how little did we know?

About 365 days later, we know quite a bit more.

As we dealt with a virtually unknown, fast-changing situation, we had to toss our previously trusted marketing plan out the window and develop new strategies to persevere the global pandemic. So, we cut marketing budgets, collected and analyzed new data, reorganized our marketing tech-stack, and accelerated cross-company digital transformation. We did all this while also trying to keep up with customer behavior trends that seemed to shift every other week.

While we should always stay humble and assume that we don’t know the half of it, after an entire year of coping with COVID, there’s a considerable amount of marketing knowledge that we’ve gained that we wish we could put in a time-machine and send to our year-ago selves.

This article is packed with valuable know-how, directly from the people who see and work with the Quick Serve Restaurant business daily.

It’s no coincidence that the advice you’ll find below covers the three main pillars required when aiming to have a CRM operation that impacts business: a) The deep understanding that a brand’s existing customers are the secret sauce of its growth, b) the knowledge that such impactful CRM operations can only be achieved with an always-on, smart, cross-channel strategy, and c) the understanding that this kind of personalized approach is only possible with a sophisticated next-gen marketing technology stack.

Bring Home the Loyalty

Data by Punchh, a leading loyalty and engagement platform for restaurants, shows that during the beginning of the pandemic, sales from loyalty program customers dropped slower and ultimately recovered much quicker than anonymous or non-loyalty sales.

Specifically, loyalty sales were nearly 20 percent greater at their lowest point and reached pre-COVID levels six weeks quicker than anonymous sales. This is confirmation that loyalty customers are the most valuable customer segment for brands – and proved to be a helpful certainty and area of focus in a time of great uncertainty.

Simultaneously, brands with multiple, siloed systems for loyalty, promotions, POS, and other systems could not aggregate data quickly enough to act on it in a meaningful way. Without a 360-degree view of customer preferences, behaviors, and predicted actions, those brands were left guessing what campaigns and offers would hit the mark – and they often missed.

Writing to our 2020-selves, we’d simply emphasize how much better this year was for businesses that capitalized on the ability to utilize data from every customer touchpoint to engage with lapsed customers, to send personalized offers to loyalty customers, and to do it all without resorting to discounting during a time when every dollar counted more than ever.

As we navigate the post-2020 landscape, one thing remains constant: the brands that can leverage their most loyal customers are the ones that will continue to rise above the torrents of change and redefine exceptional customer experiences.

Customer marketing challenges and opportunities

Let Them Eat Text

While the restaurant industry focused on making digital investments in loyalty programs and mobile applications to drive personalized experiences well before COVID – it was mainly the more prominent brands that were able to invest significant resources, making up the bulk of early adopters.

But after COVID arrived—and Quick Service Restaurants saw a 50% drop in their previous in-store traffic—everyone had to adapt digitally, or, you know what.

2020 data from Attentive – a comprehensive personalized text messaging solution – shows that customers are increasingly mobile-first shoppers and prefer to interact with the brands they love on this channel. More than 90% of customers say they’re interested in signing up to receive text messages from businesses, and 66.5% reported signing up to hear more from brands in 2020.

But, similar to loyalty programs, SMS marketing doesn’t exist in a vacuum—it provides brands with the opportunity to amplify results across their marketing channels.

American casual dining chain, TGI Fridays, experienced a 50% decrease in sign-ups for their loyalty program during the pandemic, averaging 20,000 sign-ups per month instead of their previous 40,000. But after launching a text message marketing program in September of last year, the brand had over 300K people sign up for SMS messages in the first four months. What’s more astonishing, they achieved a 4.5% conversion rate with SMS—approximately 9X higher than their email program.

Mobile devices are now ubiquitous—95% of Americans own a mobile phone—and that makes text messaging an ever-present channel for engaging your brand’s fans and driving incremental revenue. Perhaps most important for restaurants is how SMS drives immediate action—boasting higher and faster open rates than email and can influence dining decisions in real-time—especially rich SMS messages with imagery that appeals to hungry customers. This ensures restaurants can confidently reach their target audiences at precisely the right time—when their stomachs are starting to growl.

Feed Me Data

Now, we know it’s not sufficient for digital leaders to merely have a vision and plan to create a sustainable competitive advantage. To truly meet the demands of the modern-day food and beverage customer, brands must instill a digital culture that permeates every aspect of their organization.

We also know that brands that doubled down on digital initiatives put themselves in a position to take advantage of customers’ willingness to increase their digital engagement in the current-normal. But Hathway, a leading digital growth agency that works with DQ, Panda Express, and many other well-known QSR brands, identifies two main aspects within that over-arching digital strategy that most successful brands excel at.

The first is the Customer Intelligence aspect of focusing on the highest valued customer segments. On that front, the most successful brands followed these initiatives:

1) Digital as a vehicle for data acquisition

Increasing the digital value exchange between brands and customers results in greater engagement, yielding a significant increase in the number of data artifacts for business decision-making.

2) Motivators of behavior

Shifting focus from behaviors (the what) to motivators (the why) increases the probability of anticipating and meeting customers’ desires at the right moment.

3) Defining which COVID-influenced behaviors are permanent, temporary, perpetually recalibrating

Monitoring pre, during, and post COVID timelines for shifts in behaviors provides insights that are specific to a brand’s distinct vision.

For example, as stay-at-home restrictions ease in various geographies, some consumer motivators will begin to shift back to some degree as well. The level of comfort required to shop and dine out will directly impact delivery services. Hybrid work from home models will start to see breakfast dayparts before restaurant brands begin to pick up again. The effects of such trends have to be taken into account when building a customer intelligence strategy.

The second front is that of Portfolio Management—where companies build integrated strategies across brands. The main principles here are:

1) Customer lifetime value

By extending business measurements from brand to portfolio, you can create a comprehensive profile of your customer segments.

2) Customer journey management

Taking advantage of the interplay between your company’s portfolio of brands and their subsequent product offering introduces greater complexity to strategic journey mapping, which requires special attention.

3) Technology stack optimization

Integrated portfolio strategies are only as good as a brand’s ability to execute them. Increase the velocity of program deployments by reducing enterprise technology siloes.

How to Manage Infinite Customer Journeys

Can I Take It To-Go?

There’s little doubt regarding the ingredients that go into the winning recipe for QSR success since the pandemic broke out. You take focus and resources and shift them to loyalty programs and to investing in your best customers. You make sure to engage with them via sophisticated SMS campaigns. Then you wrap it all up with a box made of customer intelligence, where behavior motivators and data rule. Finally, you sneak in a generous side of portfolio management, topped with special attention to customer lifetime value, customer journeys, and tech cohesion.

Brands and marketers who followed these instructions in the past 12 months had a better year than those who did not. Brands that maximized their CRM potential even further were those that took these packages of intelligent marketing strategies and solid messages and delivered them to the right customer, at the right time, via the right channel, using next-gen technologies that support AI-mapped CRM journeys.

If you want to learn more about how such brands see a 33% increase in lifetime value, contact Optimove’s helpful CRM professionals. Maybe next year’s letter-to-our-younger-selves could just say, “you’re good.”

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This installation of PostFunnel’s ongoing Partner Advisory Board series results from a collaboration between Optimove and three prestigious partners. Our PAB articles bring you real-life, valuable, and actionable CRM marketing know-how from Optimove’s partners.

The following marketing leaders each contributed a segment of this article (by order of appearance):

Shyam Rao, Co-Founder, and CEO at Punchh

Amir Zamanian, General Manager – Food, Beverage, Restaurants at Attentive

Matt Carinio, VP Strategy, and Consulting at Hathway

Thank you all. Watch this space for more content from PostFunnel’s PAB series.

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