Data-driven marketing is one of the biggest topics surrounding today’s enterprises as restaurants and retailers are increasingly feeling the pressure of showing ROI from their promotional activities.
Business have realized that mass marketing is not the most effective strategy, as this scatter-gun approach could deliver the wrong messages to the wrong audience, and cost the business a small fortune in lost revenue.
For example, if someone routinely buys a certain product and receives a free gift or coupon for that same item, the business is essentially giving money away. That’s why savvy marketers and business owners are turning to a more targeted approach to refine who they talk to and what they say.
The burger chain challenge
One of Como’s clients, an established burger chain, wanted to find out what would be the most effective way to increase the average check size across its 88 locations. They tapped into their Como Sense data and, with support from Como’s expert data team, set out to design a campaign strategy that would result in the highest ROI.
The data-driven solution
The first step of the month-long campaign period was to define the target customer group using Como’s auto segmentation tools, which categorize customers based on their profile, visit frequency, and purchasing behavior.
The selected group consisted of 20,000 customers that had dined at the burger chain at least three times over the last year and had never bought an appetizer. They were split in three different groups, each group receiving a different type of promotion.
Here is the breakdown:
Group A: didn’t receive any special offers; used to benchmark the uplift in performance.
Group B: received a special offer: “50% off any appetizer with the purchase of a main dish.”
Group C: received a different special offer: “$5 for any appetizer on the menu with the purchase of a main dish.”
Customers were targeted with push notifications that aimed to incentivize their purchasing of the extra item. The customized messages were delivered via the burger chain’s official app, which proved to be a powerful way to bring customers through the door. Once a customer dined at the restaurant and paid the check, the business was able to track exactly which customer made a purchase and exactly what they ordered thanks to the deep integration of Como Sense in their POS.
ROI from data-driven marketing
Como data showed that 15% of the target audience visited the burger chain during the promotional period. This indicates that the offer was able to attract more customers to the store compared to any other period of time.
The campaign was also able to generate more revenue for the business. Customers who hadn’t purchased an appetizer in the past purchased one in addition to their regular meal, contributing to a 10% increase in the average check size.
The type of campaign that proved to be most effective was the 50% offer, which had a 30% higher redemption rate compared with the $5 promo.
Applying data to your marketing
The campaign proved what can be done by taking the time to segment customer groups based on their purchase history and preferences, then tailor campaigns accordingly.
The burger chain was able to increase its ROI by 10%—without the cannibalization of revenue and without interfering with customers’ regular purchase behavior.
It all goes to show the gains a large restaurant can make by harnessing the power of customer data to design a targeted marketing strategy that drives revenue, without investing money on freebies or expensive ads.
For more ideas and inspiration on how you can grow sales with data-driven marketing, check out our success stories.