The game changers: Customer dataThe game changers: Customer data

By Robin Lee Allen

This story is part of an online preview of "The NRN 50: Game Changers.” In this special report, NRN highlights some of the people, ideas, technologies, concepts and trends pushing the restaurant industry in new directions. The full report is available exclusively in the January 23 issue. Subscribe to Nation’s Restaurant News.


A little knowledge about the customer can go a long way, but a lot goes even further when it comes to driving restaurant traffic and sales.


The improved tracking technologies at the root of the growing number of new restaurant loyalty programs are giving operators that educational edge by recording heretofore uncaptured data about their patrons’ buying patterns and yielding more insight into how to influence those behaviors.


In the recent past, such companies as Panera Bread, T.G.I. Friday’s, Red Robin Gourmet Burgers and Dunkin’ Donuts introduced loyalty programs to capitalize on the new data-collecting capabilities. And more are following suit. BJ’s Restaurants said in October it would introduce a new loyalty program in the first quarter of 2012. Officials declined to give details about the program, which has been tested at three Las Vegas units.


While loyalty programs have long been a potent means of rewarding customers for their frequency, older versions were built on databases of contact information, such as e-mail addresses, with no insight into guest attitudes or behaviors. Newer programs yield a broader array of actual versus self-reported data garnered during transactions.


Shortly after Red Robin launched its new loyalty program in January 2011, Susan Lintonsmith, former chief marketing officer of the 450-unit casual-dining chain, told Nation’s Restaurant News: “It’s not just about getting [guests] to come back more often, but also understanding their preferences so we can send them relevant messages. Once we can segment this database, we can communicate with customers based on their past behavior.”


The information may have even broader, still-to-be-determined applications, according to officials at Panera Bread, one of the early entrants into the data-collection game.


Panera unveiled its new MyPanera program in November 2010. By late October 2011, the program’s membership had grown to more than 8.3 million. Put another way, Panera now has recorded information on the buying behaviors of more people than live in New York, and the ability to communicate with them all. 


The MyPanera loyalty program, which officials said was designed to “surprise and delight” members with unexpected and customized rewards, has helped to lift transactions notably since its introduction. Along with rewarding customer loyalty, one of the program’s early goals was to better understand how adjustments and shifts to the menu affected business and to move frequent users into new dayparts. Now that the program is more than a year old, officials are mining the data for more insights.


“We are very happy with this program’s size and the position it puts us in to understand and communicate with our customers to drive deeper relationships,” said Bill W. Moreton, chief executive and president of the 1,500-unit fast-casual chain, during a conference call with analysts in October.


“As an example of the impact we are starting to see, we enjoyed a nice jump in our comps in September as we rolled out our ‘Celebration 4’ [promotion], and we believe it was in part due to our ability to communicate the start of the new celebration and our new products to our loyalty program members ahead of time, instead of just allowing them to discover the new celebration as they visit the cafes.”


Moreton noted that the program has been changed over time with rewards that have lower costs and more relevancy to guests, leading to “consistent visit-frequency increases at reduced discount-expense levels.”


He added: “We are also now beginning to leverage the data we’ve gathered from our program members to understand the general buying patterns, reactions to product launches, promotions and price. And we have plans to use it to help us understand a range of issues going forward.”


Panera officials declined to elaborate on those issues, but Moreton’s statement to analysts gives a glimpse of how future learnings might inform business.


“Again, this is a tremendously powerful tool for us that we are just scratching the surface with,” he said. “As we anniversary the program’s rollout, we now see loyalty folding into our ongoing operations and customer experience.”

Contact Robin Lee Allen at [email protected].
Follow her on Twitter: @RobinLeeAllen.