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Blog / November 15, 2018

What is a Restaurant CRM and How Can It Help Boost Your Restaurant’s Profits?

Bianca Esmond


The bottom line upfront:

A Restaurant CRM system is like a guest database on steroids. It can help you effectively manage the critical guest data that makes personalized service and marketing possible. It’s that personalized and relevant touch that makes guests feel special and brings them back for more.

The detailed scoop:

Today, nearly 70% of restaurant diners are one and done (source here). They come, they dine, they don’t return.

 

That leaves 30% of diners that are driving the biggest margins for operators. That’s a lot of pressure on a small part of the pie. But there’s a silver lining here. Armed with a strong marketing strategy and the right tech tools, restaurant operators can work to flip that equation on its head.

If you’ve heard of any of tools operators are using to do this, you’ve probably heard of Restaurant CRM.

But what exactly is a restaurant CRM system and how can it help you?

CRM is a category of software that stands for Client Relationship Management. It may also help to think of CRM as Customer Retention Marketing because that’s what the best CRM systems help you do — execute marketing campaigns that help retain your best customers. And the foundation of CRM is a restaurant guest database.

How can a CRM help drive top line revenue for your business?

CRM systems are designed to help you maintain your relationships with guests over time, so that they return more often and spend more as a result. The potential impact to your business is immense. In fact, increasing your repeat guest rate by just 5% can boost profits northwards of 25%, and by some accounts up to 95% (source here). CRM systems can include a variety of features with the most common being:

  • Collect and store personal guest information like name, email, phone, address, birthday, anniversary, company, title, allergies, dietary restrictions and more.
  • Track guest visit and order history on guest profiles, including dates of previous visits and item level visibility into past purchases.
  • Send targeted email messages and offers to guests based on their personal information.
  • Track email performance metrics, such as who read what email and did they make a reservation as a result?

And there are many more bells and whistles that may come in a system, but it’s important that your restaurant CRM does the basics really well: Give you easy access to guest profiles, so that you can use the data in service and in marketing campaigns. Here are some examples:

In-Service

  • Recommend wine based on past preferences
  • Put a candle in a dessert order if you know a guest’s birthday is coming up
  • Seat a regular at their favorite table, or with their favorite server
  • Let a table linger if they have a history of post-dinner drinks
  • Seat guests in their favorite spot based on their preference for noise level, temperature and more

Sure, these things are all possible without a technology solution, but you’d need to have the impossible: a front-of-house team who has memorized the preferences of every guest and never quits!

Marketing

  • Invite all guests that order craft beer to an Octoberfest event
  • Send a birthday note to all guests celebrating a birthday in a month
  • Reach out to guests who booked a private party last holiday season with a special offer
  • Announce a new allergy-friendly menu item to guests with dietary restrictions
  • Invite guests who have visited 3x to dine at a private chef’s table

Here’s an example from NYC-Based Altamarea Group’s Ai Fiori. The restaurant invites select wine-loving guests to a special dinner.

The marketing options are endless but they need to be relevant for your concept. Hopefully these just got your creative juices rolling. But they all rely on data and data that is easily accessible to you when you need it – the exact functionality that a CRM system provides and the only way to achieve personalization at scale.

Hungry for more? Learn how In Good Company leveraged their guest database to capture 400% more emails and improve open rates by 68%. Read their story here.

What CRM Options are out there for Restaurants?

For most restaurant technology, the search begins with a very basic question: Build or Buy. From our perspective, for restaurants, the answer is definitely Buy. That’s because CRM systems can offer sophisticated features that would require a big investment to accomplish, including time, money and people. Technology companies have already made these investments and benefit from learning from the thousands of companies that use them.

There’s a 800lb gorilla in the CRM space: Salesforce. There’s no doubt about it, Salesforce is a great product with endless integration and customization capabilities. But it’s designed that way intentionally and that’s so it can work across vertical industries. Salesforce takes a horizontal play. It wants to sell its product to any and all industries from real estate and retail to non-profits and healthcare organizations…. And even hospitality businesses. But what do restaurants and manufacturing companies have in common? Not much.

The same goes for the dozens of other horizontal-type CRM solutions on the market like Sugar CRM, Zoho, Microsoft Dynamics and more. These are great solutions but built for the masses.

So what option does that leave?

A Restaurant CRM system built specifically for the needs of a hospitality business. Every industry is different, and the hospitality industry stands apart with the importance of personal relationships front and center and crucial to the businesses’ success.

For example, a CRM built for the masses likely doesn’t integrate with your restaurant reservation system, or prioritize POS integration. You might be able to accomplish it with a custom integration (think cash, time and effort). A restaurant-specific CRM will come with that capability included.

Important Questions to Consider When Evaluating a CRM System:

  • What is the process for cleansing and importing my existing database?
  • Can I easily export data from the system?
  • Is there any limit to the size of my database?
  • What standard fields come in the guest profile?
  • Are there any customization fields or tags for profiles?
  • Does the system offer embedded email capabilities or integrate with a third party email system?
  • Does the CRM integrate with my restaurant reservation system so profiles can be leveraged in-service?
  • Does the CRM integrate with my POS system so that purchase history can be recorded on each profile?
  • Is the system fully GDPR-compliant?
  • Does the system comply local email regulations including CAN-SPAM?

Interested in a CRM system for your restaurant? Schedule your demo of SevenRooms today. 

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