FI Fast Facts:
- Red Robin has improved market share through micro-targeted marketing.
- Loyalty data can often help restaurants recapture past customers.
- Geotargeting lets brands reach diners near competitors, industry experts note.
In real estate the mantra is location, location, location. For restaurant chains it’s becoming data, data, data. The latest buzzword is micro-targeting.
Micro-targeting involves using algorithms and past customer behavior, location and social media activity to personalize offers, text deals and target ads to small groups, rather than blanketing a demographic or region, effectively segmenting an audience.
“In practice, a food brand may have totally different ad sets that speak to their customer segments who are weekend bar and appetizer diners versus those who never miss a family pizza night,” Francesco Onorato, director of growth at Brandmovers, told The Food Institute. “Micro-targeting is effective because it’s personalized to what someone actually wants and tends to see much higher conversion rates.”
How Does Red Robin Market to Customers?
Red Robin, which had been losing customers for roughly three years, has adopted the strategy to try to recapture the segment of the population that abandoned it for competitors like Chili’s, Restaurant Business reported.
CEO Dave Pace told RB Red Robin took the data collected on their customers’ behavior to determine whether they had been abandoned because of their bar offerings, burgers or ambience.
“Whatever it is, we can then target and message them directly with, ‘Hey, we have that, this is what our offer is,’” Pace said. “So we’re trying to basically get ahead of it and then steal those occasions back from the competition.”
The strategy improved Red Robin’s market share by 10 basis points compared to other casual-dining brands between April and July, RB reported.
“Micro-targeting is the antidote to the spray and pray model,” Onorato added. “Restaurants with loyalty programs and frequent visits are prime candidates for micro-targeting. But the opportunity doesn’t stop there — it’s a useful strategy for grocery, retail, and hospitality, too. Basically, any business with a loyalty program because it captures repeat transaction data that you could build a micro-targeting campaign on.”
What is Geotargeting?
Geotargeting expert Robert Bentz said being able to zero-in on a defined target allows a restaurant to capture those most likely to dine there.
“Take a niche restaurant like sushi. When it comes to sushi, you either love eating raw fish or you hate it. There’s really no in-between,” Bentz said. “If you own a sushi restaurant, we can ‘geo conquest’ the competing sushi restaurants in the area. By identifying the mobile phones that are eating at your competing restaurants, we can create a database of other people in your area that love eating at sushi restaurants, then serve them your message on their desktop computers at home and at work, on their mobile phones and tablets, and on their social media accounts.”
The same logic applies to office workers who decide on the spur of the moment where to grab lunch, travelers unfamiliar with a given area or any other identifiable group.
“Our marketing agency has had great success in geo-conquesting sporting events with micro-proximity (real time) technology. During the sporting event, you find the mobile devices in the stadium or arena, then serve them ads in real time to come to your restaurant or club after the event. At halftime or between the periods, there’s a lot of time spent on mobile phones. Take advantage of that opportunity,” Bentz advised.
Hitting the Mark
Customer relations expert Dena Pizzutti, who ran the Wawa Rewards loyalty program for a dozen years and teaches food marketing at St. Joseph’s University in Pennsylvania, said targeted advertising and offers can create more meaningful experiences for consumers.
“Sharing the right offer or message at the right time makes customers more likely to engage or purchase,” Pizzutti said.
“In a sea of messages, brands that are most relevant can cut through the noise.”
“By sharing a few data points with brands and setting their communication preferences, customers can receive an experience that’s more tailored to their needs,” Pizzutti added. “Brands that not only offer personalization but are authentic and transparent in how they leverage the data can have the greatest success.”
Food for Thought Leadership
Joe Slater, President and CEO of Gleaners Food Bank of Indiana, talks about the changing realities of food insecurity and how food banks are evolving to meet growing demand. Slater explains that today’s food-insecure population increasingly consists of working adults holding one or more jobs, as rising living costs outpace wages and changes to federal assistance programs leave many households with few options.
