It’s no secret that the landscape of the restaurant and bar industry has been challenged over the past few years with Covid, supply chain issues, wage increases, declines in traffic, and inflation. However, one of the biggest evergreen challenges executives continue to face is effectively tying advertising and promotions to offline, in-store events like visits and sales.
“The biggest problem facing our clients is understanding how to most efficiently grow their businesses with limited resources. The first step we recommend is to know your customers' motivations and behaviors and close tracking gaps so you can create a system for measuring success across marketing channels,” says Mike Swan, Managing Partner and Head of Media for Liberty Interactive Marketing, a digital ad agency that has worked with national and regional restaurants chains for the past two decades.
Many rely on channels that can provide immediate revenue or store check data, such as email, loyalty programs, and online ordering. However, this approach only offers a fragmented (and limited) view of their business, leaving critical gaps in understanding customer behavior and preferences that are essential to effective marketing strategies. Here’s why this is a dangerous position to be in and how addressing the top marketing mistakes can provide actionable solutions to improve your strategies.
Siloed Systems and Fragmented Data: The Need for an Integrated Solution
One of the primary issues facing restaurant chains is the reliance on siloed platforms that do not communicate with each other. Using separate systems for email marketing, loyalty programs, and online ordering can result in data fragmentation when the name of the game is segmentation, not fragmentation. When data is fragmented this creates a challenge for restaurants to get a holistic view of customer interactions, preferences and behaviors. Using different vendors for these critical components leads to communication and analytics gaps between them. Conversely, all-in-one solutions seemingly promise to integrate these platforms with the hope of streamlining data collection and providing comprehensive insights into customer behavior for more effective marketing strategies.
But all-in-one solutions can be limited in different ways such as activation and tracking. So what do you do? The answer lies in a single analytics or data layer that can receive and analyze data from all sources to create a more holistic view of the customer and business. Solutions exist in the form of customer data platforms also known as CDPs.
Tracking Not Enabled: Missing Critical Data
Another significant mistake is the failure to enable tracking mechanisms. Without proper tracking, it’s nearly impossible to measure the success of marketing campaigns accurately. Many restaurants and bars fail to implement robust tracking systems that can link online advertising efforts to offline sales. Utilizing tracking tools like Enhanced Conversions in Google Ads, Google Analytics (GA4), the Facebook Pixel and Conversion API, and other marketing analytics platforms can bridge this gap, providing valuable data that ties digital promotions to in-store activities.
Advertising Conversion Tracking: Setup and Implementation
Even when tracking is enabled, it is often not set up or implemented correctly. Incorrect setup can lead to inaccurate data, rendering marketing efforts ineffective. Conversion tracking should be meticulously configured to ensure it captures the right metrics, such as click-through rates, conversion rates, and in-store sales triggered by online ads. "Accurate conversion tracking is essential for the success of any marketing campaign. Without it, you're operating in the dark," says Swan.
Hiring an expert to audit your systems and setup tracking is recommended. If your in-house platforms don’t change, the cost here should not be ongoing. Regular audits and optimizations are suggested to maintain the accuracy and relevance of this data, especially if there is a platform change.
Stagnant Audience Insights: Beyond Repetition
Many platforms focus solely on retargeting existing customers, leading to a stagnant audience pool. This approach limits growth and fails to attract new customers. Without robust audience insights, restaurants end up targeting the same individuals repeatedly through the same platforms, which can lead to diminishing returns and little customer acquisition. Leveraging advanced analytics and audience segmentation tools delivered across programmatic channels can provide deeper insights into customer preferences and behaviors, allowing for more personalized and effective marketing campaigns that attract new customers. Here at Liberty Interactive Marketing, we’re moving our clients towards deeply understanding their audience’s preferences and behaviors to ad dollars and media channel mix are optimized to those insights. Relying too heavily on demographics these days is an exercise in futility given the dynamics of lifestyle, culture and interests among individuals and groups. Knowing who you are trying to reach, their preferences and behaviors will dictate your platform mix and the formats needed.
For several clients, we’ve delivered comprehensive insights into key personas through store visitation and first-party data. This informed not only creative development and in-store customer experiences but also enhanced audience targeting for advertising campaigns. By integrating first-party data from email, loyalty programs, and customer purchases with geospatial behaviors and visitation patterns, we identify priority personas and devise cohesive strategies across marketing channels resulting in higher engagement and brand awareness.
Zero Prospecting: Platform Reliance and Inadequate Insights
Finally, a significant oversight is the lack of effective prospecting strategies. Due to inadequate audience insights and the overwhelming noise of digital advertising, many restaurants fail to build a robust pipeline of potential customers. Effective prospecting involves using data-driven approaches to identify and target new customer segments. Data from existing customers can be used as a basis for modeled audiences or predictive segmentation that can be used to find new customers. By employing sophisticated data analytics and machine learning algorithms, restaurants can predict and influence customer behavior, creating tailored marketing strategies that resonate with new prospects.
One final pitfall is solely relying on one platform or the wrong media mix to reach your audiences. Depending on where your target audience is most active, diversifying your ad platforms is recommended, such as a mix of YouTube, Programmatic, Instagram, and emerging platforms like TikTok. The knowledge relies on knowing where your highest value customers are most active and then building out a strategy to prospect new customers just like them.
How to Address These Challenges
- Integrate Platforms: Implement a single analytics or data layer that consolidates data from all sources, providing a comprehensive view of customer interactions and behaviors.
- Enable and Optimize Tracking: Ensure tracking codes and systems are correctly set up and properly implemented across all digital marketing channels. Use tools like Enhanced Conversions in Google Ads, Google Analytics (GA4), the Facebook Pixel and Conversion API to link online advertising to offline sales. Regularly audit your tracking setup to ensure accurate data capture.
- Proper Conversion Tracking Setup: Meticulously audit conversion tracking to ensure it is configured to capture essential metrics. Hire experts for initial setup and conduct regular audits to verify data accuracy, especially after platform changes. Regularly audit tracking to verify that data is being accurately captured and reported to measure the impact of digital marketing on all business activities including in-store sales accurately.
- Enhance Audience Insights: Leverage advanced analytics, such as geospatial intelligence and audience segmentation tools, to gain deeper insights into customer preferences, enabling more personalized and effective marketing campaigns. Move beyond demographics to focus on behavior and preferences.
- Effective Prospecting and Diversification: Develop data-driven prospecting strategies using modeled audiences and predictive segmentation. Diversify ad platforms to reach where your target audience is most active, ensuring a strategic mix.
By addressing these common mistakes, restaurant and bar chains can unlock the full potential of their marketing efforts, driving both customer acquisition and retention while gaining a more comprehensive understanding of their audience.
Liberty Tsighis is the Founder and Managing Partner of Liberty Interactive Marketing, a digital advertising agency she has led for over 17 years. Liberty has managed over $100 million in advertising across Google, Facebook, Instagram, TikTok, and Programmatic. She has worked with clients like Ticketmaster, Jenni Kayne, Black Rock Coffee Bar, Cold Stone Creamery, and Wings and Rings, and educated hundreds of marketers and agencies. Outside of work, Liberty enjoys watching her son play soccer, gardening, and bike rides. Pronounce her last name like "Tea-guess." Connect with Liberty on LinkedIn or visit https://teamupwithliberty.com to learn how she can help elevate your digital marketing strategies.
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