Putting Your Customer at the Center of Digital Transformation

As a career advocate and practioner of One-to-One marketing, improving customer value, loyalty and the overall customer experience, I was pleased to see an article entitled “Restaurants Ditch The QR Code”, by Alina Dizik, in the Tuesday, June 5, 2024 edition of the Wall Street Journal. It was very timely, Having just returned from a weekend visit to the Williamsburg section of Brooklyn. Dining within this Millennial and Gen Z Destination Hub, I was consistently greeted at restaurants by a small stand on our table containing just a QR code.

During my trip, I reluctantly trudged through this new social norm, thinking that just as we are supposed to be putting our phones away, that everyone now has to take theirs out. It’s the last thing that should be required during a dining experience.

The article cited a growing “revolt” to the Covid inspired practice, with diners viewing QR codes as also being “tacky”, “annoying”, adding privacy questions, and being “difficult to use and read on a typical 5” by 3” screen. According to studies, QR code menus have faced a very mixed reactions from customers, with as few as a bit over 30% of consumers viewing it positively. The article quoted restaurant owners who have recently gone back to paper menus, but it also touched on some customer but mostly restaurant potential pluses as well.

However, I also believe that there is hope. The needs of restaurant customers often differ, and can differ nightly depending on their mood or other circumstance.  Here are some thoughts on how the QR codes can and should improve the overall customer experience.

1.         Personalized Dining Experiences: Perhaps you have a dining experience in mind, such as;  “I just want something light tonight”, or “I want to stay low on carbs”, “I want to stay below 1500 calories tonight”, or “I feel like fish”. QR codes could allow you to enter your preferences and view a reordered AI driven customized menu, just for you!

QR code menus can also integrate with customer relationship management (CRM) systems to gather data on customer preferences. This allows restaurants to offer personalized recommendations and promotions, tailoring your dining experience to your individual tastes and needs. For example, a vegetarian could view nightly specials, as well as how other dishes on the menu can be customized to meet their specific vegetarian wants and needs.

2.         Privacy: Privacy policies and data usage should be clear with opt-in or opt-out options.

3.         Enhanced Interactivity: Digital menus can feature high-quality images, detailed ingredient descriptions, videos of dishes, and perhaps even an augmented reality (AR) view of what exactly will be served.

When ordering a glass of wine, diners could view a description of its taste and balance profile, as well as suggested food pairings, and even previous viewer ratings. These can help customers to eliminate surprises, make better informed choices and raise overall satisfaction.

4.          Improved Efficiency and Revenue: QR code menus can improve operating efficiency. Many QR codes today also allow you to pay your check at the end of meal, eliminating the back and forth of asking for and waiting for the bill, offering a credit card, and then waiting for it to be returned for signing. Integration with mobile payment systems can streamline ordering and payment, enhancing convenience.

Restaurant owners could also follow trends and create higher impact specials around the foods that customers are ordering, and those that they are pairing. Table turnover can be also be faster.

Feedback from some restaurant owners is that QR menus have resulted in a 10% lower average check size. The reason may be associated with diners doing a quick scan and before ordering, then putting their phone away. A personalized more immersive experience could well produce higher revenues.

5.          Eco-Friendly Solution: By eliminating the need for printed menus, QR codes reduce paper waste and align with environmentally conscious consumer preferences.

6.         Real-Time Feedback: QR codes can link to one or two question simple feedback surveys, allowing customers to provide real-time reviews, helping restaurants address issues promptly, improve service quality and provide diner insights.

Redefining the customer experience through technology can be a true competitive differentiator for any business with the vision and the will to fully understand their customer’s differentiated needs.

I view today as a transition period, and a best-case scenario is to offer printed menus, QR codes, or a mixture of both as technologies can improve the customer experience. This is similar to what many industries are facing. Give the customer what they want!

The 1to1 future is now

I've worked with clients throughout my career that have struggled with how best to align limited resources to make real change and at the same time exceed this year's financial goals. The latest technologies and new touch points make investment decisions more important than ever.

In a recent engagement our client in the e-commerce space employed some of the most sophisticated technologies and techniques to achieve limited annual growth. The newest tech application would be purchased annually to help them achieve a "bump up", but their basic marketing strategy lacked a fundamental understanding of their customer's needs and potential value. 

Discount marketing programs based on observed behavior and the latest technically enabled trigger based campaign is a perfect example of this type of "bump" strategy. It's just not producing sustainable growth. With the advent of the "aways connected" consumer and near ubiquitous mobile access, they expect more than ever that you will know them and provide them with what they want when they want it. 

Don't get me wrong, today's real-time trigger technologies are a breakthrough in 1to1, but not when reapplying the old recency, frequency, monetary (RFM) approach, or third-party data append database modeling to digital marketing. Nor is it effective to simply "observe" web behavior and produce an offer because it worked with a similar demographic. It's only through the understanding of customer needs (and how these relate to potential future customer value) that an organization can build strong customer relationships by producing contextual dialogue. 

If you have a strong methodology to understand your customers and what will truly make them (and those like them) to opt-in to ongoing dialogue, you won't be investing in the latest technology to drive limited growth, you'll be setting the stage to create a competitive advantage that will have a significant impact now that will continue to grow into the future.

Before you make that investment in the latest marketing technology, make an investment in truly knowing your customers. 

Creating needs based segments is the first step to 1to1

I’ve recently had the opportunity to work with several large-scale well-known consumer/e-commerce companies with ambitions to evolve to 1to1 customer marketing. In both instances, previous approaches to customer segmentation were developed by top Database Service providers or outside analytics firms, and customer segment personas were hypothesized through internal qualitative efforts.

Both cases showed a consistency of errors. Database Service providers despite having hundreds of appended data elements created largely demographic segments, relying on past purchase history, recency, and frequency that told the organization little in terms of actionable customer needs.  The collected data that they offer can improve target market modeling, but can only go so far. Also, internally developed “personas” didn’t tie to customer value or needs. Many common needs existed across personas, violating the basic premise of market segmentation – segment attributes must be mutually exclusive across segments and collectively inclusive within segments. There was also no way to know which “segment” was most important since customer value wasn’t assignable. Personas turned out to be best guesses and in one case created disastrous effects. Their definitions of needs included many that were not actionable.

The ability to define actionable needs segments begins with an understanding of customer value. A decile analysis or similar parsing of the customer base can then lead to diving deeper into your most valuable customers. How are do they differ? What needs and interests drive action? Where can these needs be observed, collected, and acted on through trigger and offline marketing offers?

Needs based segmentation combines qualitative and quantitative analysis. The path is straightforward and it must combine customer needs, identifying internal and third party data, and a formal plan to collect actionable observed behaviors and preferences.  Segments must have both mutually exclusive needs and be quantifiable.  Done right, it provides a blueprint for the entire marketing plan, new metrics for success, and immediate new marketing opportunities.

Mobile apps as 1to1 strategy

We've been working with mobile app developers and would like to share some thoughts on how to build a 1to1 mobile platform strategy. 

The technologies to produce mobile apps are changing daily. It's very similar to the evolution of the web. We've seen many marketers though that needed to build an initial app to "check the box" as the request quickly came down from the top floor - "Where is our app?" Unfortunately, now they are living with an expensive solution tied to a single native operating system, which requires updating at an equal or even higher price. The results have often been "seven figure" nightmares. 

The solution we've seen that best meets the 1to1 needs of marketers are hybrid apps built on a single universal app development platform. Using basic coding methodology (similar to the second phase of web development) combined with simplified functionality coding, these new apps have the ability to utilize the native functionality of the Apple (iOS), Android, Windows Phone and other operating systems/ devices, and the ability to allow marketers to adjust their marketing message based on the individual mobile user. 

The technology allows marketers to eliminate the need to build apps for separate operating systems, and eliminates the always-connected requirements of mobile web based solutions. Instead, it greatly reduces cost and complexity and combines the best of both worlds. One platform - easy to update.

What this means is the ability to utilize the geo-location capability, calendar and other device  functionality, in combination with individualized customer information which may include loyalty program ranking, contact preferences, interests, daily/weekly/monthly program strategies, all combined with 1to1 identification delivered in real time mobile marketing programs. 

Customers demand a 1to1 relationship on their mobile device and real solutions are beginning to emerge. Mobile app development platforms are providing the latest tools.