It’s a business tale as old as time: the newly-hired CMO figures he/she can move a whole lot of product if they can just get their hands on enough budget upfront to build out savvy online ordering tools, an app with a strong loyalty program, and a delivery solution with order injection, alongside the budget to market the brand on tv, build a social strategy injecting maximum snark and fun into social media, drive push notification strategy against marketing goals, and hire influencers from content houses to make TikToks about the drink menu.
You know, the usual in 2021.
The stately, longstanding finance executive who has never heard of TikTok will inevitably look at this plan and say, “Wow, no way. We can’t afford all that! I have no idea what a content house even is, and even if I did, I would only give you that money if you could prove upfront what the ROI would be.”
Enter: the stalemate.
This push and pull — left brain against right brain, the science against art, ROI against the unascertainable value of brand ubiquity, CFO against CMO – is one tug-of-war at the very heart of business.
With the right digital tools in place, restaurants can acquire and utilize better data to sell more food and transition the perception of marketing from a cost center to a profit center.
Is our social media presence a cost center or an action driver? Does the cost of a SaaS-based recommendation engine outweigh its benefits? What is the lifetime value of an app-downloading customer over a non-app customer, and does that incremental value outweigh the cost of getting the customer to download the app in the first place?
These are value-based questions, and they exist as a central feature in many of the CMO/CFO relationships I advise in the restaurant industry.
And I see many as an advisery council member for a group called B2B in the Black.
B2B in the Black is an executive forum where marketing and finance executives work together to build a marketing-finance alliance, prove marketing’s impact on revenue and transform marketing from a cost center to a profit center.
It’s a place where CMOs and CFOs talk through best practices. It’s a place where ROI gets brought up a lot. And it’s a place where finance and marketing build repeatable models that actively drive pipeline performance.
As restaurant marketing becomes more digital, its impact becomes more measurable. Which is great news for finance teams’ long leery of marketing spend in the first place; with the ability to measure more effectively come answers to age-old questions about marketing as a cost center and as a profitability driver.
We ascertained that a recommendation engine brought a four-percent lift in average check size right out of the box for one client I’ve supported. So we went back to the drawing board as marketers to toy with the algorithm, and voila, an additional four percent. We added a second technology on top for an additional five percent, and just like that: a grand total of 13 percent lift to average check size.
When we look to e-commerce, we can find an industry that understands established metrics and practices to power data analytics.
These stats are the kind of thing a CFO loves to see. They’re the kind of thing to take to board meetings and build bridges between departments; successes that get marketing people to think like finance people in justifying decisions, and successes that show finance people the value in creative vehicles for improved performance.
“Are we able to change the slope, and can we prove it?” It’s a simple question that every marketing executive should ask themselves and be ready to answer.
The entire foodservice industry is beginning to think and operate more like e-commerce brands by expanding digital tools in customer acquisition and retention, demand generation and closing the sales funnel.
And that’s a great thing. Finally, when we look to e-commerce, we can find an industry that understands established metrics and practices to power data analytics.
Restaurant brands in 2021 should, for example, know the cost of new customer acquisition and the cost of generating repeat business. They should understand a customer’s lifetime value. Third, they should understand fundamental processes in testing and optimization. Finally, they should understand inventories of their highest and lowest margin items and produce incentives accordingly.
And if they’re doing it right, restaurants should use these tools to win a more significant market share at a lower cost. With the right digital tools in place, restaurants can acquire and utilize better data to sell more food and transition the perception of marketing from a cost center to a profit center.
All of which is music, I would think, to a CFO’s ears.