Think 'big data' is just for digital giants like Amazon or Google? Think again. Many industries can leverage the power of big data to better tailor their offerings to their customer's preferences and tastes. In fact, the SMB Group approximates that 18 percent of small and 57 percent of medium businesses are already using business intelligence and analytics solutions. The trend is especially gaining momentum in the restaurant industry, with companies like Marketing Vitals leading the charge in helping restaurant owners and franchise executives pinpoint what works and what doesn't.
Rom Krupp, the CEO of Marketing Vitals, has almost twenty years of experience assisting with POS systems and is now in the business of helping restaurants turn 'data into dollars' through leveraging key analytics through his company's game changing software. When presenting to clients, he likes to reference a quote by classic American innovator John Wanamaker: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." His hunch is that many restaurant owners, consultants, and franchise partners find themselves in exactly the same boat. Whether it's Pizza Hut spending millions to target Millennials only to find out that they eat pizza like their parents, or the local cafe that can't figure out how to live with or without Groupon, restaurants face real challenges when it comes to assessing how and where they should invest their time, energy, and resources.
By envisioning marketing as the intersection of communications and sales, Rom, and his contemporaries, put forward big data as the missing piece and crucial key to a strategic approach to customizing, or "catering," a restaurant to suit its guests, not only through ads, but through everything from menu offerings to server behavior. They imagine a restaurant as a sum of countless different choices, as a kind of chaotic, flavorful chess board that can attract or repulse.
What do you serve, and when? Which server covers which shifts? How do you price the different items on your menu? How do you promote specials? And, to which demographic? Was last week's business bad because of the rain, or because John was manning the register, and he has a difficult time upselling? These are questions most restaurateurs navigate through a mix of trial and error and their own intuition. The question big data and companies like Marketing Vitals pose is whether there's an alternative, or possible upgrade. Is it possible to be strategic in addition to using common sense? To be driven by quantitative evidence in addition to qualitative?
Analytics and data offer not only answers to the many questions restaurateurs face, they also point out which questions are the most profitable to ask. There are metrics that the restaurant industry "hangs its hat on" that can be misleading. For example, the much revered average guest spend can signal success as it rises, or it can signal that the company has lost a significant portion of lower spending customers, which may be far from ideal. The shift required is not one of replacing old metrics with new ones, but of moving from making decisions in silos to accessing a bigger picture with greater integration of multiple factors.
The possibilities for addressing common restaurant issues, as well as achieving short and long term goals, through big data are almost endless; and, their benefits are not only reserved for restaurant owners or franchise executives or even business consultants. Every player in a restaurant, or chain of restaurants', supply chain stands to benefit from big data. For example, knowing how popular tomatoes are in different seasons can help everyone from the farmer to the supplier to the chef to the manager to the marketer. And, thanks to cloud based technologies, the software that enables the gathering and organizing of this impactful data is more accessible than ever.
Skeptics may protest that data is no substitute for being on the ground, but it doesn't have to be. And smart brands like Marketing Vitals, far from being removed from the realities of restaurant life, are actually actively fostering a marriage of expertise. The new chief business development officer of Marketing Vitals, Ward Olgreen, is a veritable service industry veteran. With stints as President and CEO of Souper Salad and Grandy's and Senior Vice President of Worldwide Franchising for Pizza Inn under his belt, he saw in Marketing Vitals, the future of the restaurant industry. Needless to say, Marketing Vitals saw in him a valuable partner and guide in customizing their solutions with real restaurants, not abstractions, in mind.
As technology advances and more platforms emerge to help restaurants leverage the power of big data, my prediction is that the experience of diners, restaurateurs, and business consultants will change dramatically. Diners will receive more finely targeted ads and campaigns, business consultants will have new tools at their disposal, and restaurateurs will base their operational decisions on not only their own experience but on the feedback they receive from software that's specially designed to process many different kinds of relevant data. Regardless of the rate of growth, I would say this "trend" is here to stay.