Imagine that you’re settling into your weekly marketing meeting when the topic shifts to your e-club mail blast campaign. The exchange that follows is the type you’ve heard all too often.
Director: Let’s take a look at last week’s e-club campaign. How did it perform?
Marketing Manager: Not too bad. Sent 500,000 emails with a 15 percent open rate. It’s continued growing over the last three months.
Marketing Analyst: But… we only saw 400 transactions with that promo code.
Marketing Tech: Using that code on the POS terminal is easier because our servers know that’s the same promo as our national ad promo.
Marketing Analyst: Still – we’re not getting the whole picture here. We need to know how many people who received the email and then used the code to assess the impact.
Marketing Manager: How do you even get that info?
Marketing Analyst: We need a consistent metric on incremental impact. We can’t simply lump half a million responses together and expect to get anything meaningful from it.
Director: Ok, so we don’t know how it performed… we need to figure this out.
E-clubs are supposed to drive sales by turning customer experience into something more personal (i.e. – a special email coupon on a customer’s birthday, a one-year sign-up anniversary cashback bonus, etc.). But are they really working? How are you measuring that success?
These exchanges are indicative of three common problems in retail and restaurant marketing measurement.
Problem #1: Promo code redemptions do not necessarily equal impact
Most consumers who redeem coupons are already active with your brand. But there is no concrete evidence that a redemption is at all incremental until it is positively attributed to an e-club member. One tool to account for this is an impact model that looks at same store sales and track daily redemptions. Over time, this allows you to understand (and use as a rule of thumb) the impact of a promotion. A redemption is really nothing more than a server entering an email code (or something like it) into the system after a guest shows it to them.
Problem #2: The server’s job is to get through the transaction quickly
Servers are hard workers and fast thinkers. Their jobs are stressful, so they will take shortcuts when they see the opportunity. This can disrupt marketing’s efforts to measure impact of promotions over time. Tests with a variable and control group can end up with inaccurate results that are outside of the margin of error.
Problem #3: Most restaurants do not have the technology to match transactions to their e-club/mobile app
How do you link promotional emails that are sent to and received by an actual person to your revenue data from your POS system? Without tracing and linking these two, you’re still looking at additional margin of error.
Overcoming Your Restaurant’s E-Club Problems
There are two steps to beating your restaurant’s e-club problems.
Step 1: Design a experiment to determine overall sales impact.
Think about what happens in the absence of marketing. What activity would your customers have if you didn’t market to them at all? Set up two groups of customers in a certain market – one you will market to and one you will not. Track same-store sales before and after a promotion and compare the two groups’ results. With a large enough e-club, this will give some indication of overall sales impact.
Step 2: Expand your e-club to include behavioral data.
Did you know that you can append behavioral data to your e-club if you have track 1 data in your POS system? Now, you most likely can’t do this yourself since this also requires external data. But there are services that can do it on a regular basis for you. The best part? Revenue off the insights are quick to cover the costs.
Comparing behavior data between your promotional group and control group (i.e. – the group you did NOT contact) will give you an extremely valuable and honest assessment of the impact of your marketing.
If 15 percent of your e-club customers who receive a promotion make a purchase compared to just 10 percent in the control group, the incremental performance of the promotion is 5%. However, the promotion most likely offered a discount to the portion of the 15 percent who used the promotion. Remember to consider sales, discounts, and margin to the analysis.
E-Clubs are powerful tools for generating revenue. But when answering the question, “How is our e-club marketing performing?” make sure you’re backing it up with data and facts. Doing so will set you up for real future marketing success.