Maximising the return on your customer acquisition cost

So, it all started with the grand idea to reinvent what people believed a sandwich should be. You bottled up your passion for bread, ham and cheese, raised some finance, designed a new type of sandwich (skipping the pop-up launch idea) and opened your first high street store.

It’s no mean feat, it can take years to achieve, there are challenges but ultimately success as your first customer is finally through the door and buying their first gourmet sandwich.  The question is though, will this be the first or last?

Whilst technology cannot help with how good the ciabatta, baguette or wrap tastes, there is specific hospitality technology available to enable you to get your customers back spending more money.  Not only can it help with increasing brand loyalty by offering an excellent experience instore, online etc., it can also help by incentivising customers to return.

Whatever type of hospitality business you run, the highest return and profitability comes from selling to your existing customers, and here I want to talk about what technology can do to maximise this opportunity.

With the right systems in place some of the opportunities available are as follows:

  • Provide an integrated experience to the customer
  • Customer loyalty program
  • Enable ‘on point’ payment solutions at point of sale
  • Increase SPH (spend per head)
  • Targeted marketing based on customer sales data

Experience is everything

All of the above aim to achieve one thing, increased profitability.  I cover this in another post in more detail but for some businesses in the QSR sector, providing a seamless and enjoyable experience to the customer will correlate directly with retaining customers.  It is so easy with so much choice these days, that the customer’s experience in choosing and buying from you is crucial and should not be overlooked.

Loyalty matters

Offering a customer loyalty program is a tried and tested marketing tool.  I realise this isn’t for everyone though and some of the most successful businesses do not offer them (think Pret, McDonalds).  However when you need a competitive edge it should not be overlooked as it can play a powerful part of the marketing mix.  Technology enables you to offer your customer all types of loyalty programs from points and ‘stamp’ based, to free credit and customised offers. 

I recently met a customer who implemented a stamp based loyalty scheme with a web integrated registration form and was going to support that with the ability to use the same card for charging to and adding credit to, working across multiple sites.  At the core of this is the EPoS solution, with the various APIs linking it together with the website and the cloud.  It doesn’t have to be complicated, and in fact it isn’t as long as the technology is set-up already to perform that way.

There’s an app for that

The hospitality sector is being bombarded with new payment apps, loyalty apps and new ways to interact with the customer.  I don’t share everyone’s enthusiasm on them, I see the value for some operations, but in the main I am yet to be convinced that we really need them.

‘Payment’ was never broken, the increased limit on contactless recently is significant, and I always have a card to pay with.  Nevertheless, with my business hat on that there are opportunities here for the operator and they should have these on their radar. The wider audience is taking them up, so offering these at the PoS is now a necessity. Your current EPoS solution should be geared up for accepting these forms of payment, and if not, it demonstrates a lack of scalability and finger on the pulse.

Increasing average spend

Of course spend per head (SPH) is a key area where you can increase profitability and it lies at the core of maximising the ROI on your initial customer acquisition cost.  Quite simply, if your customer’s average spend is £10, how can you get it to £15 or more?  Product placement at PoS, menu design, online/app and kiosk order flow, table side ordering – all add up to the same thing, upselling products to customers they didn’t know they needed.  I could dedicate a whole blog on this alone and I have already highlighted four of the easiest ones above. 

So implementing relevant technology to your business such as improved online ordering process for a QSR business, or using tablets for table side ordering in a casual dining restaurant (never in a fine dining restaurant IMHO) will increase SPH overnight, take it as read.  These days too, assuming your POS solution provides it, table side ordering via lightweight and affordable consumer Android tablets is cost effective and provides a significant ROI, especially if the payment model is SaaS (software as a service) so you essentially pay as you go.

Mining for gold

A lot is talked about ‘data mining’, making use of clear reports to glean useful intelligence about your business.  I often speak to customers though who say they are overwhelmed with the data.  So taking the path of least resistance, the data remains just that, data, with little value to them. In reality, there are actually many highly valuable uses for data and if you can implement a solution to harness it, it’s very powerful, giving you yet another opportunity to maximise revenue.  Working in conjunction with a loyalty solution you will (by the nature of how they work) build a wealth of information on who is buying what, where and how.

The opportunity here is to then filter the data with the right tools and push out targeted offers/emails/texts (the latter is less common than it was 5 years ago) with relevant content to reflect customers’ spending profiles. Try sending offers to those who buy at weekends, but not during the week, or who are regular lunch diners but don’t grab a coffee.  Even the old ‘it’s your birthday’ incentive ticks all the boxes on customer satisfaction, brand building and boosting revenue.  All of these are sensible and achievable with the right back office solutions working together with your EPoS system.

So….now we have the customer through the door for the very first time, and we have the same customer feeling loved and coming back again and again, AND with an increased SPH. This is the ultimate goal, and it is vital in achieving success in a very buoyant hospitality sector.