What Restaurants Need to Know About Agile Marketing

There were no sirens or warnings for American businesses. It wasn’t like businesses in the Tornado Alley who might be able to prepare for the pitfalls of tornado season or coastal cities that can shutter their windows in advance of a hurricane. Instead, coronavirus hit the American economy — and particularly restaurants — like the “Go Directly To Jail” card in Monopoly. It was that abrupt. Many restaurants read the news as a death sentence as governors around the country banned mass gatherings.

And, of course, the more people that “mass gather” in a restaurant, the more robust the business. So restaurateurs all over the country were forced to quickly pivot their business models to cater exclusively to carryout and delivery options. All these restaurants needed to market these options — especially since these were completely new for many higher-end restaurants— to their existing customers.

In marketing, we actually have a tactic called “agile marketing” which allows businesses of all kinds to react and quickly adapt to sudden change.

The agile marketing concept will allow restaurants to minimize their ad spend with marketing channels that have a low impact  …

The concept of agile marketing is based upon three core principles: speed, testing and a mindset on analytic sprints, which in lay terms means performing these measurements quickly. The agile marketing concept will allow restaurants to minimize their ad spend with marketing channels that have a low impact while simultaneously providing insights that will prompt establishments to more quickly increase their investment into campaigns that deliver a high return on investment.

Performing long-running tests is too risky for restaurants at this time- especially given the risks of getting expensive, lengthy tests wrong. And in this economic climate, restaurants can ill-afford long-running losses.

Yet, restaurants still need to take some risk and market themselves. The problem: using historical information and once-proven strategies is no longer the safest bet for success.

OptiMine worked with a restaurant delivery service, Bite Squad, where such an agile mindset really helped fuel their business.

When you examine the restaurant delivery business, it’s important to direct marketing efforts toward both the lower and upper sales funnels. Focusing on one could greatly reduce your return on investment and even be detrimental.

With Bite Squad, we considered the lower funnel to be consumers ordering a meal right now. This is almost always expressed in the form of a search in Google or Bing. Of course, any restaurant offering delivery or carryout wants to invest in marketing that will win that business. But it’s also the most competitive part of the funnel. Every restaurant is marketing to consumers in the lower funnel.

Upper funnel investment is great for brand awareness and driving higher search volumes. But most importantly, it isn’t focused on competing for one immediate order, which is essentially the nature of lower funnel investment. Instead the brand-building associated with upper funnel investment could help facilitate repeat business. But this upper funnel investing doesn’t have clicks or immediate orders to tell the complete ROI story.

We found that for Bite Squad, some digital channels played a hybrid role- providing both upper and lower funnel benefits simultaneously. One channel in particular played this role well: paid social advertising. We found that Facebook ads are three times more effective than ads on streaming radio services like Pandora because social media marketing offers more specificity, targeting and geographic controls, which is what’s needed for restaurant marketing given its unique characteristics.

There are other, lesser-known, digital modes that also work well. Companies such as Cardlytics, Quantcast and Conversant take credit card data to develop an audience lookalike system. They take your regular restaurant consumers, profile them and go into the prospecting universe with that lookalike model to then serve targeted digital display ads. The return on ad spend is typically two to three times the investment, but can vary depending on how specialized the restaurant’s customer base is.

… while simultaneously providing insights that will prompt establishments to more quickly increase their investment into campaigns that deliver a high return on investment.

More traditional forms of marketing also work well for restaurants looking to geo-target their campaigns. Something like direct mail allows restaurants to market within their own neighborhood using data that has long fueled marketing: a person’s address. That piece of mail also has more of a shelf life, compared to a digital ad, and grabs upper funnel market share.

Similarly developing an activation strategy around less expensive marketing channels, like email marketing and organic social media campaigns, can provide upper and lower funnel lift. Restaurants can market deals and even meal plans to help engage their current customer base. These are great activation strategies to get known customers “in the door” but won’t likely expand new customer acquisition.

Restaurants should encourage customers to share via social media the foods they order, encourage them to tag the establishment and even come up with a clever hashtag. A social media campaign can be linked to loyalty programs as well, offering incentives for promoting the restaurant on Facebook, Twitter, Instagram and the like.

But even these low-cost marketing opportunities revolve around properly employing an agile marketing strategy. Without constantly evaluating your marketing initiatives — regardless of cost or outcome — restaurants won’t be able to maximize the lift of their marketing campaigns. Ongoing measurement is the key to making this agile approach successful.

The upshot is to always maximize return on ad spend, which is done very simply: by decreasing spend on low-performing marketing initiatives and increasing investment on those that are high-performing. Of course, this is obvious. But it highlights the importance of having the proper measurement tools in place — to accurately know the winners from the losers, and to optimize the entire budget across the whole marketing portfolio being leveraged. And identifying the low- and high-performing campaigns quickly is extraordinarily critical, especially during the economic stranglehold of the pandemic, to reaching the zenith of any marketing campaign.