Small business, big data

shutterstock_78016495Big data is not just for big business. As Chris Sheedy discovers, it could be the secret ingredient to restaurant success.

Immediately prior to his meeting with Restaurant & Catering magazine, licensed business broker Heath Nicholson had lunch at a restaurant that he’s not likely to re-visit. The food was spectacular, but the service was dreadful. If the owners had offered a feedback mechanism, he would have happily utilised it to offer helpful praise and useful criticism. But there was no such mechanism. For this eatery, that could lead to a very serious problem if the service issue goes unchecked.

A feedback system is just one of numerous methods of gathering data about a business. Such data very quickly reveals trends and attitudes among diners. It flags problems and highlights the things that delight the customers. It is a small-business version of big data, and is a potent offering for a restaurant.

“If you gather data, it will show you very quickly what you are doing wrong,” says Nicholson, who works for the Link Business Broking agency. “How many refunds are you giving? How much complaining is going on? If you’re tracking every single one of those things then it is very powerful. A lot of restaurant owners don’t want to know when people are complaining. But in business, people who complain are your greatest assets. And if you give them an opportunity to air their grievance and you offer them a bonus for doing so, they will become your greatest advocate.”

From a restaurant owner’s point of view, collecting data might be seen as a cumbersome task more suited to big-budget marketing departments in corporate offices. But, Nicholson says, many point-of-sale systems allow for collecting data during the normal running of a restaurant. “It is also about training your staff to gather that data,” he says. “They are talking to the customers and if they are getting feedback then that needs to be put into a system. If you have an electronic system then great, but if you don’t then you might need to do it with pencil and pad.”

The most important data for a restaurant to gather is a customer’s name and email address. This is the sort of information that Julie Jones, general manager of Restaurant Profits, can spin into gold. A database of satisfied customers is a database that can be communicated directly to, rather than paying for the scattergun approach of traditional advertising, says Jones.

Restaurant Profits works with over 70 restaurants directly, and around 2000 more via seminars, blogs and a weekly tips email, to help them build and manage their all-important databases.

“Big data for a restaurant can simply be a small database of contact information gathered from the patrons,” says Jones. “That database should grow as the business grows. It’s such a powerful asset for the business. We see restaurants that start with no data, and we talk to them about trolling through their emails, their booking lists, anything at all they can find. All of that data is a valuable resource. We see restaurants adding 2000 people
to their database in a month.”

Why is this database useful? According to Jones, it becomes a driver of repeat business. Events such as wine dinners and themed lunches can be filled through a simple email promotion. Special offers, such as birthday promotions, can be presented to people that know your restaurant. Then there’s the fact that a restaurant or cafe can simply stay in touch, perhaps via an interesting monthly email, with people who have visited in the past.

“This way you begin to engage with your customers,” Jones says. “You actually get to talk to those people in a way that is meaningful to them. They know you, they had a good time last time they visited, and they’re going to come back into your restaurant if you invite them.”

Emails and newsletters, however, should be well thought out. They shouldn’t always contain a special offer, says Jones, or recipients will come to expect them all the time. Instead, they should communicate things that are useful and important to the customers, such as food trends, recipes, new ways to use specific ingredients, or upcoming events at your restaurant. The communications should reflect the personality of the individual that drives the business or reflect the philosophy of the restaurant.

Those who gather and utilise a database find they have a new level of control over their business. They can manage and create their own success. “Those who don’t have a database are at the whim of the marketplace,” says Jones. “They don’t know when people are likely to come in, they can’t plan their staffing, they can’t plan menus effectively in terms of ingredients because they just don’t know how many people are going to come through the door on a given day. But restaurants or cafes with a database can actually fill their business in previously quiet times.”

Nicholson agrees, saying this is one of the great powers of big data. “Data teaches you what the items on the menu are that keep people coming back,” he says. “It shows you which wines people prefer with specific mains. And it tells you when the restaurant is likely to be quiet, meaning you can invest more in marketing for these times, or arrange to have less staff on board.”

A solid data strategy will make the business more valuable when it comes time to sell, too, providing helpful information for prospective buyers. “I have been involved in a number of restaurant and cafe sales,” he says. “Some collect data and some do not. I can confidently say that the majority of restaurants that collect data, and that can therefore show, year on year, what the customers’ behaviour is like, have a business value a lot higher than those that do not.”

Social media is often the easiest place to start gathering data before you look on to bigger and better things, grab some tips on social media marketing: yourblogposts.com

This great content is produced for members of the Restaurant & Catering Association. Find out about becoming a member here.

Restaurant & Catering magazine and its associated website is published by Engage Media. All material is protected by copyright and may not be reproduced in any form without prior written permission. Explore how our content marketing agency can help grow your business at Engage Content or at YourBlogPosts.com.

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