The big data myth that's killing small restaurants and the reality-based solution07 Feb 2015, by Kamron Karington in Marketing, Sales
Nothing will drive sustainable profits and faster growth than data-driven marketing. The problem is... this is the worst thing you can tackle as a do-it-yourself project.
Besides "providers" that harvest your customer list, credit card processors are aggressively peddling "data" as a "value add" if you switch your processing to them.
The Pitch: You'll see some colorful whiz-bang charts and reports (they'll go light on the spreadsheets) because that's where most people's eyes start to glaze over.
They'll use terms like: big data, data insights or actionable data - so "you" can make better marketing decisions.
Of course it is “you” deciphering all the "data." "You" formulating the "insights." "You" taking all the "action." And it is "you" creating and deploying the marketing.
Now, if you have an advanced math degree and know how to write complex algorithms. If you you are hungry for even more things to do every day... then you might give this a whirl.
The pitch is seductive... "customers just pay and you're done. Easy-peasy."
Consider this though:
1. Saving a few seconds at the POS will cost you hours and hours later... eyeballing data, and creating and sending marketing messages.
2. Since only customers who link their credit card to the program are being tracked (and participation rates are very low) you will restrict your ability to grow sales.
3. The data they provide is a mere fraction of what's already available from your POS - so what exactly are you gaining?
FACT: Loyalty programs requiring customers to link their credit card to track spending suffer from horribly low enrollments.
TRUE STORY: A large multi-unit client of ours switched to one of these credit-card-linked providers. After 5 months of a sputtering downward spiral they called to switch back. Unfortunately a lot of damage had already occurred and it took over a year to get the momentum back.
Think about this too: Picture the unneeded legal liability when a credit card provider gets hacked... and it was you who insisted your customers link their credit card to your loyalty program...
Sadly, I sat in a meeting with a credit card “data-provider” once. They flat-out admitted that even they wouldn’t know how to make useful sense out of what they provided. “That’s up to the business owner to decide.”
Restaurant analytics are a game-changer for you. NOTHING will drive more additional revenue than individual tailored marketing paths for each customer.
Choose an analytics platform that does the heavy lifting for you, and doesn't leave you exposed to legal trouble on the credit card side.
With ridiculously affordable solutions that crunch the data and build your restaurant sales on autopilot, do yourself a favor...
Spend less. Do less. Get more.
Discover more about the amazing power of data-driven marketing here.