What does it mean to classify your customer segments? Increasing customer satisfaction starts with categorizing them.
Understanding Customer Segmentation:
Customer segmentation, dividing customers into similar and different groups, helps design marketing plans based on their needs, desires, and behaviors, leading to increased customer satisfaction. Customer segmentation involves dividing your customer base into distinct groups based on specific characteristics. By doing this, restaurants and cafes can design their offers, marketing strategies, and services to better meet the unique needs of each segment.
Impact of Customer Segmentation:
- Diverse Customer Base: According to a survey by the National Restaurant Association, 85% of restaurants serve a diverse customer base with different preferences. Therefore, there’s a significant opportunity for restaurants and cafes to effectively tailor their promotional offers by understanding these preferences.
- Personalized Customer Experience: A study by Deloitte shows that 36% of customers are more likely to engage with personalized promotions, highlighting the importance of retargeting strategies to ensure marketing efforts align with each customer segment’s preferences.
- Effective Marketing Strategies: Harvard Business Review states that targeted marketing campaigns can lead to a 200% increase in sales. For example, a restaurant targeting families with specific offers can increase customer attraction, loyalty, and visit frequency.
- Menu Planning and Design Improvement: Data analysis revealed that 70% of customers respond positively to menu customization. This insight has helped restaurants and cafes improve menus based on customer preferences, resulting in a 15% increase in overall customer satisfaction.
The Power of Customer Segmentation:
Understanding your customer base allows shaping a unified behavior pattern for different experiences. Let’s detail the five proposed main categories:
1. Top Customers:
Characteristics:
* Frequent visitors who spend significant amounts.
* Participate in loyalty programs.
Strategies:
* Exclusive offers for loyalty members.
* Personalized rewards based on spending.
2. One-Time Visitors:
Characteristics:
* Visited only once.
* Possibly due to a negative experience or promotion
Strategies:
* Encourage repeat visits with limited time offers.
* Gather feedback to enhance future experiences.
3. New Customers:
Characteristics:
* Recently visited once.
* Discovered the brand through ads or peer recommendations (Word of mouth).
Strategies:
* Warmly welcome them for future visits through communication channels.
* Encourage social media engagement and positive reviews.
4. At-Risk Customers:
Characteristics:
* Regular customers showing signs of reduced visits or spending.
* Express dissatisfaction.
Strategies:
* Special offers or discounts to regain them.
* Gather and address feedback to improve satisfaction.
5. Lost Customers:
Characteristics:
* Haven’t visited for a long time.
* Might have switched to competitors.
Strategies:
* Retargeting campaigns with enticing offers.
* Collect reasons for their absence and address any existing issues.
Case Study: Implementing Customer Segmentation Engine at a Café
Methodology and Execution: After segmenting customers using the segmentation engine, their behavior, preferred products, associated products, and visit frequencies were studied. Custom marketing message templates were then designed for each segment for retargeting.
Results: Implementing the segmentation engine at a café led to a 148% increase in overall sales and a 52% increase in targeted customer spending. This means that customers who used to spend an average of 25 riyals now spend 62 riyals. There was also a higher rate of repeat visits from one-time visitors and successful retargeting of at-risk and lost customers.
Tools for Customer Segmentation:
* Loyalty Programs: Provide segmentation based on registered customer data.
* Point of Sale (POS) Reports: While some POS systems offer customer-related reports, they may fall short in unifying all customer behavior under one generalized classification
* Business Intelligence (BI) Platforms: Ballurh’s BI system offers an easy and fast tool to understand customer behavior deeply and quickly with an instant customer segmentation engine linked to various data sources from loyalty programs and POS systems, aiding in identifying marketing opportunities and developing effective advertising campaigns.
Additional Resources:
There are more ways to maximize the benefits of customer segmentation techniques to understand demand behaviors and effectively retarget customers. Contact Ballurh’s growth team for more information.
A business intelligence platform that seamlessly integrated with local POS to build actionable insights from joined-up data for F&B retailers to enhance decision-making, increase revenue and improve customer satisfaction.
