I recently spoke with a former colleague of mine from Church’s Chicken about her upcoming restaurant marketing initiatives and offered my advice on the essential elements needed to go to market. She quickly interrupted: “That’s nice, but our CEO just wants an app.” And so the story begins…
Her CEO is not atypical in his thinking. Today, many restaurant and retail CEOs are hyper-focused on getting an app into market, at the expense of other coordinated marketing efforts. Not to be confused, apps are great and have a valuable place in the marketing strategy for all multi-unit restaurants and retailers. However, in my experience, they need to be developed within the context of a larger marketing strategy, which today often yields to a collection of tactics designed to increase sales in the short-term, but often lead to consumer confusion in the long-term.
Will People Download Your App?
The primary issue with an overly reliant mobile app strategy is that it comes at the expense of interacting with the vast majority of your customer base.
I recently attended MEG (Marketing Executive Group of the National Restaurant Association) and had the pleasure of listening to Scott Jampol, SVP of Marketing at OpenTable, speak on the subject. His research concluded that 56% of consumers were unlikely to download a restaurant’s app and only 6% were “very likely” to do so. In other words, only your most loyal customers are going to download your app.
To help alleviate some of the disappointment tied to ‘underperforming’ apps, I have always considered them to be a rewards outlet for brand loyalists. It’s no secret that loyal customers have more lucrative spending habits than new visitors and having a mobile app is going to help ensure they keep spending. It’s very unlikely to see a spike in sales after launching an app given very few people will ever download it. And until someone makes a visit to their app store and clicks ‘Download’, you’re stuck.
Building Your Customer Database
As the CMO of Church’s Chicken, I noticed how franchisees and company operators alike were hesitant about building a customer database and were reluctant to accept the diminishing return of television and other traditional advertising. I explained that the cost per point (CPP) of TV had risen faster than our sales had grown, and that we were less media efficient today than in previous years. That trend had been going on for five years and I couldn’t see it changing in the near future.
“Why not move from rented media to owned media? With a database of names, we could email, text, or send a message via the mobile app to customers at an incremental cost of communication that was approaching zero.” – Rob Crews, former CMO of Church’s Chicken
That trend had been going on for five years and I couldn’t see it changing in the near future. Why not move from rented media to owned media? With a database of names, we could email, text, or send a message via the mobile app to customers at an incremental cost of communication that was approaching zero.
The focus of today’s restaurant and retail marketers needs to be on building a database of customers that becomes an asset to the organization. I continue to struggle with the common mentality that says mobile apps are a better solution than email or text. What’s most important is having a long-term plan for where you want to end up, then systematically working to develop that platform. I have a working model of the technology and marketing infrastructure you need to go-to-market today in retail which I will share in a future post.
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