What is a Customer Data Platform (CDP)? And, how can it fuel the next phase of growth for restaurant brands?

Tyler Felous
May 11, 2021
5
min read
Trending Topics in Hospitality
In this post, we cover:
Customer Data Platforms are a new tool in the stack that make data more accessible and usable
Putting data to use can be difficult, but with a CDP you get even more value out of existing data
CDPs also make it easier to test or switch vendors, and experiment—so you can learn faster what drives the most ROI for your business
D

espite the last decade of focus on the topic, restaurant groups of all sizes still struggle to collect, analyze, and most importantly, act on the data they’re gathering in order to grow their business (more here about the Pivot towards Tech Proficiency happening industry-wide).


Restaurants face a mix of challenges with their customer data that fall into a handful of categories:

  • Lack of Access: data stuck in archaic systems, or, consumer-facing discovery and third-party delivery networks block access altogether
  • Lack of Integration: data can be accessed, but, no team or technology can stitch it together (or systems that strictly unify data add another layer of costs)
  • Lack of Actionability: integrated data isn’t being passed to the tools that Ops, Culinary, Marketing, or Finance teams can actually use in their day-to-day
  • Lack of Ability to Test or Experiment: any combination of the above make it nearly impossible to test and pilot new strategies—from menu engineering to online and offline marketing efforts

With the rising importance of technology, brands were just waking up to the fact that they didn’t have the data infrastructure they needed to succeed.

Enter COVID.

Practically overnight, 2020 pushed brands to confront these obstacles head-on as they had to digitize their business and, in many cases, were forced to adopt solutions like third-party delivery that threaten to disintermediate restaurant brands from their guests. This has set the stage for the next frontier of restaurant growth, specifically, guest centricity and the ability to build an on-to-off-premise experience that is seamless and personalized—and controlled by the brand.

CDP Definition

The challenges outlined have given rise to a category of technology called Customer Data Platforms (CDP) that exclusively serve the purpose of ingesting data, creating a single view of the guest, and piping that data to end-platforms where it can add value. 

So how does this new tech category fit into the restaurant tech stack? And is a CDP the right fit for your needs? 

Start by diagnosing where your brand is at today and plot the journey to get to a state of data architecture that will serve your brand for the next decade.

Common Symptoms of a Brand that Needs a CDP 

First, let’s start with the signs that your brand needs a new approach to an old problem.

  • Data deserts: “I wish I could do X, but can’t get the data from A to B”
  • Manual workflows: “We will need another person just to do [insert data analysis project]”
  • Tech-stack dependency: “We can’t implement X until we have Y in place”
  • Vendor lock-in: “We can’t afford to leave X - they just have too much control over valuable data about our guests”

Say Goodbye to Data Silos 

Here’s the real revelation of CDP: it’s a single solution to ingest data from any source, merge that data to a single customer record, then send data to the right destination.


With CDP, as a brand, you don’t have to think about whether the vendors you’re working with will give you useful data—your CDP is there to ingest and make that data usable.


To help visualize this point, see the graphic below. While everyone looks at charts like the one below and gets excited about “dream-scenarios” in the top right—without a clean, usable, data foundation, they’re just that...dreams.

Prescriptive Analytics — from 'What happened?' to 'How can we make it happen?'


What CDP Unlocks for your Brand

To determine what a CDP could unlock for your brand, start by mapping out your current tech stack, with a specific lens on data Sources and Destinations.


Sources are any vendor or channel that captures customer data. Examples include: POS, WiFi, Waitlist & Reservations, Loyalty, Email/SMS, Brand Website, Guest App, Online Ordering, Pay at Table, Payment Processors, Social Media, Surveys, Third Party Reviews...and the list goes on, and on. 


Destinations are vendors who will help you act on the data. Examples include: Email & SMS Marketing, Search & Social Ad Platforms, Business Insights Tools, or even Data Warehouses.


It’s worth noting that sources can be destinations as well. An example of this is enriching customer data back into your CRM to fuel more impactful, targeted Search, Social and even Email/SMS campaigns.


This data Source/Destination exercise will get you to somewhere like this:


Bringing it to Life: Highlighting the Loyalty Use-Case

Imagine you’re a restaurant brand years into a loyalty program offering, yet, your loyalty vendor’s messaging solution doesn’t fully meet your needs/expectations. Or, you want to facilitate personalization based on more data than just what’s within your loyalty/offers solution. 


Are you stuck? Marketing leaders at many brands have said they feel that way. But, that doesn’t have to be the case any longer.


By adding a CDP to your stack, you’d be able to—in this example—ingest points, spend, offer, and redemption data back to a centralized guest record that can also include data from web, social, or on-prem interactions not captured by a loyalty solution. Data could then be pushed to the destination vendor best suited to meet your goals. Net net, the added flexibility of a CDP ensures you don’t have to switch one vendor to accommodate another or to adopt a new strategy.


Further, you can push this singular, enriched guest record to a marketing execution platform of your choice. This unlocks the ability to build conditional messaging flows that drive guests further down the funnel to habituation, all based on their unique interactions with your brand.

Conclusion

The concepts that win in the next decade will be those that create data architecture that puts an accessible customer data layer at its core—combined with modular, best-in-class applications to act on the data. This idea is not new to digitally-native companies, like ecommerce, that are disciplined at tracking every step of their guests’ journeys because the needed data architecture is already built into their platform and experience. Now is the time for brick-and-mortar businesses like restaurants to reclaim their customer data and put it to work.

Photo credit: Hanny Naibaho