o get an operator's perspective on how 2020 has accelerated adoption of real-time data in business decisions, Wisely’s CEO Mike Vichich talked with the CFOs from Chuy’s and California Fish Grill during Restaurant Finance Week about the tools and strategies that helped them return to growth during the pandemic.
Jon Howie of Chuy’s and Paul Potvin of California Fish Grill shared how data is helping both restaurant brands inform their future, and how a restaurant CRM can bring Marketing and Operations closer together to drive results.
Looking back at 2020
Chuy’s, a fresh Mexican restaurant based out of Austin, had to adapt their full-service, casual dining operations to new government regulations and changing consumer habits. “How are you going to be profitable with to-go only when you’re a casual dining business?” Jon Howie shared. “We had to go back to the drawing board.”
California Fish Grill, a 35 unit fast casual seafood chain based in California, faced similar pressures as the pandemic hit. Paul Potvin said, “We got hit early and often, and initially it was...chaos every day trying to figure out what move to make next.”
What changed as both brands navigated the challenges of COVID-19?
To enable more off-prem sales, and a more contactless guest experience, Chuy’s transformed their tech stack to include online ordering & delivery, and enhanced curbside pickup and take-out procedures.
As a fast-casual brand, California Fish Grill already had some tools in place, but Potvin said “even though we’re fast casual, two thirds of our sales were dine-in [before the pandemic]. We were fortunate to have our third party delivery, online ordering, and app in place. What changed was that now most of our sales were coming in through those channels.”
The opportunity that surfaced for both brands—harness the flood of customer data and turn it into actionable insights.
“Most of the time customer data sits in silos that don’t tie together.” Mike Vichich said, outlining why a restaurant CRM is a necessity.
“The first step is getting all that data into one system that creates an individual customer record, and ties out every interaction a customer has had with a restaurant brand in the restaurant and online.”
End game? Creating a window into each brand’s Customer Lifetime Value (the predicted cash flow from a guest across their lifetime, based on their recency, frequency, and spend, also known as CLV).
The top 5% of customers drive close to a quarter of sales, and they behave differently than the bottom 45% of customers, who drive ~19.5% of sales. While these ratios look similar across restaurant brands, the individual underlying guests, and the ways they interact with their preferred brands, are different.
By knowing Customer Lifetime Value, and understanding the common behaviors of top customers, Vichich says brands can answer questions they otherwise wouldn’t be able to.
“Who are your top customers? Why do they dine with you? What is it about the brand that they love? Knowing the answers to these questions can help engineer the guest experience.”
Chuy’s and California Fish Grill put Customer Lifetime Value to Work
Jon Howie shared “with Wisely’s CRM system and Host App we can tie a phone number and email address to transaction history. When that’s the case we can find out […] how often they come in, and really get Customer Lifetime Value.”
His goal? To fully understand Chuy’s customers as they select sites for new stores.
“In my mind, marketing and real estate have the same goal [...] for marketing you’re reaching out to your customers to get them to visit. With real estate you’re trying to place a store where your customers live, but if you’re just looking at overall customer volume you might get the wrong answer on where to open next,” Howie said.
He added “If you can bring your focus to the top 5% of customers, maybe you’re looking at a smaller population of guests, but they’re the ones you want to bring in.
We’re trying to get all the minds from marketing, real estate, and Wisely together to better identify sites going forward. It’s starting to get pretty exciting, being able to harness the data, and make sense of it.”
For California Fish Grill, the goal is to turn customer interactions into relationships. “Fast casual tends to be more transactional,” Potvin said. “We want to stand out from the crowd [...] Now, with Wisely, we know who’s coming in, we know their frequency, and we can get data in the hands of the operators so they can really connect with our guests.”
For Potvin, the data revealed a surprising story. “We had two customers spending about the same amount of money. One customer literally came to us 111 days out of 120, each time between 7:00 and 8:30. He always ordered the same 3-4 things online.
The other customer would spend a big dollar amount, but only came in 20 of those 120 days. Most of those visits were $250 to $500 orders. He was ordering tacos associated with his work email,” Potvin said.
He went on to explain “When we were able to tie those two customers together [via transaction history], we realized that what we had was one customer using us at two different locations in two different ways, and we could reward him for the big orders as well as when he comes in and orders individually.”
That’s the kind of data that’s becoming super powerful, that we’re getting in the hands of the operators to see what they can do to really connect with our guests.”
Chuy’s and California Fish Grill have both been able to return to growth during the pandemic, even opening new stores mid-2020. As the conversation came to a close, Mike Vichich highlighted a key through-thread after listening to both brand’s experiences.
“There’s no one right answer for what to do next with your tech stack. But as we head into 2021, whether you aren’t as mature from a technology perspective, and are trying to solve a particular pain point […] or you have a tech stack that is really well oiled, but is missing one critical bell or whistle [...] the one thing I would say is think about is who owns the data.
You want to know who your guests are [and how they interact with your brand] so you can drive more visits from top guests, and get more people like them to visit or order—you can’t do that if you don’t own the data.”
Watch the full conversation: