How restaurants can beat the cost of living crisis
The latest consumer insights from ONS show 64% of adults in the UK are spending less on non-essentials – as of June 2023. Some reports suggest as many as 83% are cutting back on restaurants and takeaways as economic pressure increases.
Are UK consumers cutting back on takeaways & eating out?
Most of the shallow data being published suggests UK consumers are spending less money on takeaways and eating out. For example, joint insights from Natwest and Retail Economic tell us that takeaways and eating out are most at risk of being cut from consumer spending in the UK.
Browsing through the stats, it’s easy to think people have stopped spending on non-essentials. Yet, while overall spending is down, people are still eating out and ordering in.
In fact, data from CGA’s monthly Cost of Living Pulse shows 94% of British consumers went out at least once in April and 40% were going out at least once per week.
The key to making it through the cost of living crisis is focusing on what consumers are doing– not what they aren’t doing. It’s time to focus on the people who are spending during the cost of living crisis and target your most profitable audiences.
You can do this in three key steps:
1. Identify your priority audiences – consumers who are still spending and interested in your food business.
2. Reach the people who matter most – adapt your marketing strategies to build visibility and capture the right kind of people.
3. Maximise repeat revenue – Convert browsers into paying customers and nurture them into repeat customers.
#1: Identify your priority audiences
For most restaurants and food businesses, there are two types of priority audiences during economic downturns: big spenders and repeat spenders.
Big spenders can include one-time customers and repeat customers (we love these!) but we’re talking about high-ROI transactions, either way.
Repeat spenders come in two main groups:
1. People who regularly eat out or order in
2. Customers who repeatedly order from you
Group one is your biggest opportunity to attract new customers during a cost of living crisis because they’re still spending regularly. This is your priority audience for winning new diners.
Group two is your most important set of customers – the ones who keep coming back to order from you.
Now, you have to pinpoint your target audiences within each group. Use your existing customer data and market analysis to monitor spending habits to identify your priority audiences: the people still spending, the biggest spenders, regular spenders, etc.
For a more detailed look at how you can use your existing customer data to identify priority audiences, take a look at our guide: How restaurants can beat the cost-of-living crisis.
#2: Reach the people who matter most
Once you know your priority audiences, it’s time to rethink your marketing strategies. Whether you’re targeting new audiences, adapting your messages for existing audiences –or both – you need to reach priority audiences at each stage of the customer cycle.
For restaurants and food businesses, this involves four key stages:
1. Discovery: Prospects discover your restaurant in search, a delivery app, social media, etc.
2. Consideration: They find out more about your restaurant and compare you with alternative options.
3. Motivation: Specific factors motivate prospects to take action: urgency, location, special offers, special occasions, online reviews, etc.
4. Conversion: Prospects convert by booking online, calling up or placing an order.
To capture interest at each stage of the booking cycle, you need a complete multichannel marketing strategy targeting your priority audiences.
- SEO: Segment keyword targeting to reach the right audience (intent, relevance, long-tail keywords, etc.).
- Content marketing: Adapt your content strategy to prioritise the interests of priority target audiences.
- Local SEO: Optimise your Google Business Profile, target locations, local outreach, etc.
- Social media: Adapt your content and messaging in social posts to maximise relevance with priority audiences.
- Paid advertising: Use targeting to narrow your target audiences and optimise bids to maximise ROI.
- Video marketing: Consider whether you need to take a different approach to video content, including style, tone, messaging and visual content.
- Seasonal campaigns: Know when your target audiences spend the most throughout the year and optimise your budgets, messaging, etc. to maximise ROI.
- Influencer marketing: Network with influencers and micro-influencers who can promote your restaurant to relevant audiences.
- Offline networking: Partner with hotels, attractions and relevant publishers (city guides, in-flight magazines, etc.).
When people make decisions about where to eat, they need reinforcement signals to help them feel confident. At the search stage of the customer cycle, your audience is probably using Google Search or delivery apps like Deliveroo.
Make sure your profiles are optimised to help people make quick booking decisions with confidence:
- Complete profiles: Make sure your Google Business Profile is 100% complete and kept up-to-date.
- Images: Include quality images showcasing your restaurant (for dining in), your menu (to help people order), food prices, your best dishes, etc.
- Customer reviews: Build a profile of positive reviews to increase trust.
- Promotions: Promote special deals on social media and your Google BusinessProfile.
- Special occasions: Cater for birthdays, anniversaries and other special occasions(where relevant to your target audiences).
- Engagement: Answer Q&As and respond to reviews on your Google BusinessProfile.
#3: Maximise repeat revenue
Now that you’re capturing and converting your priority audiences, it’s time to maximise revenue from them. Your aim now is to turn as many customers as possible into repeat buyers. To achieve this, you have to keep marketing to them with ultra-relevant, personalised messages. This starts with understanding their purchase habits:
- Frequency: How often each customer buys from you.
- Recency: The time since their last visit.
- Value: How much they spend when they visit.
- Products: What they buy.
With this data, you can start to group customers into cohorts – eg: biggest spenders, regular spenders, regular big spenders, etc. You can also start to identify niche segments, such as customers who always order vegan dishes, order more frequently towards the end of a month or spend significantly more on busy sporting weekends.
By monitoring frequency, you can also identify drop-off and intervene before losing valuable customers.
Your CRM should contain all of the purchase habit data you need but you can gain even deeper insights by integrating multichannel data.
Let’s say you’ve got two customers in the same area who always order vegan food. By simply looking at CRM data, you might place these two customers in the same cohort and send the same email messages.
What if you incorporate social media insights, though, and discover one engages with a lot of animal welfare accounts while the other one is purely interested in health and fitness? Suddenly, it’s clear that these two customers will respond to very different marketing messages, but you’ll only make this distinction by incorporating multichannel data.
This is the level of personalisation you have to achieve to maximise revenue from repeat orders.
Need help capturing the right customers?
If you need more help with capturing the right customers, our guide for restaurants and food businesses goes into plenty more detail.
We’ve helped many restaurants such as KFC, Harvester and Toby Carvery get more bookings so you’ll be in good hands. Call us on 023 9283 0281 to speak to our hospitality marketing experts or send us your details and we’ll get right back to you.
