The latest consumer insights from ONS show 64% of adults in the UK are spending less on non-essentials – as of June 2023. Some reports suggest as many as 83% are cutting back on restaurants and takeaways as economic pressure increases.
However, many customers are still spending and this article tells you how to find them.
Most of the shallow data being published suggests UK consumers are spending less money on takeaways and eating out. For example, joint insights from Natwest and Retail Economics tell us that takeaways and eating out are most at risk of being cut from consumer spending in the UK.
Browsing through the stats, it’s easy to think people have stopped spending on non-essentials. Yet, while overall spending is down, people are still eating out and ordering in.
In fact, data from CGA’s monthly Cost of Living Pulse shows 94% of British consumers went out at least once in April and 40% were going out at least once per week.
Sadly, the cost of living crisis affects people disproportionately. Affluent spenders are the least affected and most likely to continue eating out while the poorest are hit hardest.
As CGA explains:
“This group is dominated by consumers who were already lower-frequency users of Britain’s On Premise—while the important core of regular visitors have maintained or increased their trips out.”
Restaurant marketers need to look past shallow insights and focus on spending data for their target audiences. Don’t pay attention to survey results because consumers say one thing in surveys and do something completely different when the situation arises
The key to making it through the cost of living crisis is focusing on what consumers are doing – not what they aren’t doing. Forget about people cutting back on X, Y, Z or anyone who isn’t going to palace an order.
It’s time to focus on the people who are spending during the cost of living crisis and target your most profitable audiences.
We’re going to do this in three key steps:
Marketing itself isn’t any different during economic hardships. You may need to rethink who you’re targeting and what kind of message to deliver, but the same general rules apply.
For most restaurants and food businesses, there are two types of priority audiences during economic downturns: big spenders and repeat spenders.
Big spenders can include one-time customers and repeat customers (we love these!) but we’re talking about high-ROI transactions, either way.
Repeat spenders come in two main groups:
Now, you have to pinpoint your target audiences within each group. Use your existing customer data and market analysis to monitor spending habits to identify your priority audiences: the people still spending, the biggest spenders, regular spenders, etc.
Pay close attention to the following:
For a more detailed look at how you can use your existing customer data to identify priority audiences, take a look at our guide: How restaurants can beat the cost-of-living crisis.
Once you know your priority audiences, it’s time to rethink your marketing strategies. Whether you’re targeting new audiences, adapting your messages for existing audiences – or both – you need to reach priority audiences at each stage of the customer cycle.
For restaurants and food businesses, this involves four key stages:
Broadly speaking, you have two primary goals at each stage of this customer journey. First, you want to attract new people at each stage and, secondly, you want to nurture people at each of these stages to their first or next order.
For this you need a complete multichannel marketing strategy:
The most common channels include:
Keep in mind that the customer cycle can be very short for food businesses. Hunger is a powerful motivator and, unless people are booking in advance, purchase intent is high. Compare this to, say, a traveller booking their next trip, who takes their time researching locations, compares ticket prices and checks all kinds of other information.
When people make quick decisions, they need reinforcement signals to help them feel confident. At the search stage of the customer cycle, your audience is probably using Google Search or delivery apps like Deliveroo.
Make sure your profiles are optimised to help people make quick booking decisions with confidence:
Obviously, showing quality images of your best food is a great way to win customers, but the less obvious details can also make the difference. Something as simple as showing your opening times can tell customers you’re open and ready for business. Likewise, including pictures of your menu with prices for each dish can help new customers know what to expect.
Now that you’re capturing and converting your priority audiences, it’s time to maximise revenue from them. Your aim now is to turn as many customers as possible into repeat buyers. To achieve this, you have to keep marketing to them with ultra-relevant, personalised messages.
This starts with understanding their purchase habits:
With this data, you can start to group customers into cohorts – eg: biggest spenders, regular spenders, regular big spenders, etc. You can also start to identify niche segments, such as customers who always order vegan dishes, order more frequently towards the end of a month or spend significantly more on busy sporting weekends. By monitoring frequency, you can also identify drop-off and intervene before losing valuable customers.
Your CRM should contain all of the purchase habit data you need but you can gain even deeper insights by integrating multichannel data.
Let’s say you’ve got two customers in the same area who always order vegan food. By simply looking at CRM data, you might place these two customers in the same cohort and send the same email messages. What if you incorporate social media insights, though, and discover one engages with a lot of animal welfare accounts while the other one is purely interested in health and fitness? Suddenly, it’s clear that these two customers will respond to very different marketing messages, but you’ll only make this distinction by incorporating multichannel data.
This is the level of personalisation you have to achieve to maximise revenue from repeat orders.
If you need more help with capturing the right customers, our guide for restaurants and food businesses goes into plenty more detail.
Our team is always ready to help, too. Call us on 023 9283 0281 to speak to our hospitality marketing experts or send us your details and we’ll get right back to you.
Dave is head of SEO at Vertical Leap. He joined in 2010 as an SEO specialist and prior to that worked with international companies delivering successful search marketing campaigns. Dave works with many of our largest customers spanning many household names and global brands such as P&O Cruises and Harvester. Outside of work, Dave previously spent many years providing charity work as a Sergeant under the Royal Air Force Reserves in the Air Cadets sharing his passion for aviation with young minds. He can often be found in the skies above the south coast enjoying his private pilot licence.
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