Blog
Restaurant Customer Segmentation: Why It’s So Important
Elise Musumano
5 min read
Dec 20, 2023
Elise Musumano
5 min read
Dec 20, 2023
Customer segmentation is a powerful tool that can greatly improve marketing results for your restaurant. Think about it: Instead of blasting one generic message to all of your email subscribers, segmentation enables you to categorize customers by behavior, dietary preferences, location, age and more.
In fact, segmentation is the most effective email marketing strategy for businesses. But high-performing marketing campaigns are just one benefit of restaurant customer segmentation. It also helps you understand your customers better, allowing you to anticipate their needs and create exceptional dining experiences.
Keep reading to learn everything you need to know about restaurant customer segmentation, from the four common types to the top segmentation tools.
Restaurant customer segmentation is the act of categorizing your customers into groups based on shared characteristics, traits or behaviors. For example, restaurant owners might divide customers based on family size, spending habits, frequency of visits or preferences like gluten-free or vegetarian.
Keep in mind that segmentation should come before targeting and positioning.
Targeting is the process of selecting a customer segment and deciding what channel to reach them through, like email, social media, in-service greetings and post-service follow-up. Positioning is the act of deciding what messaging you’ll use to speak to your target market in those channels.
Segmenting your customers will help inform these decisions, including the best channels for your marketing efforts and the most impactful messaging.
After all, the same message and the same channel won’t work for every diner — so why market to them this way?
Segmentation is easiest when you can keep customer groups mutually exclusive. This way, you target each with individual marketing messages that don’t overlap.
While you can attempt to prevent segmented groups from overlapping, you may run into instances where it’s unavoidable. However, you can set filters in your email marketing or CRM software to prevent customers from receiving two communications.
For example, let’s say you own a Mediterranean restaurant called Five Figs. You segment guests based on spend and the number of visits. You want to send two emails: one to big-spenders, inviting them to a VIP dinner at Five Figs, and another to first-timers, thanking them for stopping by for their visit.
It’s possible for a first timer to also hit a spend threshold that qualifies them as a big spender. So you’d need to set a threshold in your CRM that says “send XX emails max per week to each guest” and/or a priority where guests receive the VIP email over the other.
Here are some other important requirements for effective customer segmentation:
Did you know? SevenRooms CRM & Marketing solutions automates all of the above for restaurants
Ready to create a segmentation strategy for your restaurant? First, you’ll want to understand the four common segmentation types.
Geographic segmentation divides customers based on where they live. In the restaurant industry, this can be particularly helpful. For example, consider a restaurant in a popular tourist destination.
Locals and tourists represent two distinct segments. Locals may be more interested in loyalty programs or typical dining options like takeout, while tourists might seek unique, one-time experiences.
Your marketing strategy would then vary accordingly — locals could benefit from long-term customer loyalty programs, while tourists might be enticed by short-term promotions or special tourist-friendly menu items.
Demographic segmentation classifies customers based on demographic factors such as age, family size and occupation. As a restaurant owner, understanding customer demographics is crucial.
Families may prefer family-friendly environments with kid-friendly menus, couples may seek more intimate settings or romantic offers and business diners might look for quick, professional options.
By recognizing these differences, you can tailor your offerings, ambience and promotional activities to effectively cater to each demographic segment.
Behavioral segmentation categorizes customers based on behaviors and spending patterns. For example, understanding how to tailor your marketing to big spenders versus low spenders.
Big spenders may be interested in premium menu options, exclusive events or loyalty programs that offer special perks. On the other hand, low-spenders might appreciate budget-friendly menu options, discounts or happy hours.
By understanding these spending behaviors, you can tailor your marketing strategy and offerings to appeal to each segment.
Psychographic segmentation considers customers’ motivations, interests and lifestyles. Some customers visit restaurants primarily for Instagram-worthy experiences, while others might be drawn by promotions and freebies.
For example, a restaurant with visually appealing dishes and trendy interiors can attract the Instagram-focused crowd by promoting shareable moments.
Simultaneously, promotions like free appetizers or dessert for check-ins may appeal to customers looking for added value. Understanding the psychological motivations of your customers allows you to craft marketing messages and experiences that resonate with their specific interests and preferences.
One of the best ways to segment your customers is to come up with personas.
Personas are your way of finding your most profitable customers and the segments that group them together.
They make it easy for companies to target customers with shared values and pain points.
Now, let’s run through a step-by-step of what actions to take to segment your customers:
The first step in segmenting your customers is to invest in a high-quality restaurant CRM. A CRM will be integral to segmentation since it lets you collect customer data like email addresses, age, birthdays and special occasions.
With SevenRooms’ CRM, you can create a custom guest tag for each guest profile, like big spender, family-friendly, VIP or wine lover. You can then use that information for highly targeted email campaigns, marketing automation, loyalty programs and more to improve the customer experience.
A robust customer database will be the star of your segmentation strategy. To maximize its power, collect guest information via email marketing, waitlists and reservation forms.
A CRM system like SevenRooms enables you to easily collect guest data and integrate existing data from online ordering systems and your POS, so you have one comprehensive database for all your marketing efforts.
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Once you identify your customer segments, creating detailed guest personas can help you better visualize your audience. The more details you include, the more personalized and effective your targeting and messaging will be.
Let’s dive into an example of what persona profiles might look like based on three customer segments.
Frugal Family: These types of customers are likely looking for a low-cost meal with an option on the menu for their children. They usually dine early and don’t stay as long as the other three personas.
Business Buffs: Business Buffs are typically networking or entertaining clients, so they care about good drink options and don’t pay as much attention to prices, because the bill will likely be expensed.
Cozy Couple: The Cozy Couple likes to enjoy a night out to themselves. They are there for the experience. So, they’re in no rush to leave after they’re done eating and are willing to pay for desired food and drinks.
Looking at the personas above, Five Figs might decide to send out a new children’s menu to Frugal Families, a happy hour with private space for Business Buffs and a romantic dinner for two to Cozy Couples.
A great way to reach customers fast — and generally low cost, depending on the platform you use — is through email.
Planning involves knowing how to reach out, as well as deciding what to say. Understanding who these guests are will help you align your messaging with what your audiences values.
Many email platforms let you send emails automatically, triggering them off of segments, and even adding secondary emails set to send after the first.
This takes the hard work off your plate, and it factors in the reality that the average email open rate is under 30%. So send an email, and then automate a reminder to send to those who didn’t open the first one, trying with a different subject line.
Email automation is half of making this process scalable; segmentation automation is the other. You should have a platform that tracks customer behaviors, attributes and preferences and logs them without any manual effort.
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Breaking your customer base into segments is a game-changer. But it’s not just about selling; it’s about understanding customer needs and making them happy. All of which can lead to more revenue for your restaurant.
Find out how SevenRooms’ CRM, reservations software and marketing tools can help you get the most from restaurant customer segmentation. Book a demo today.
