Customer segmentation has been around for a while – but this vital marketing tool for hospitality businesses has been given a massive boost by the arrival of AI.
It’s a well-established fact that marketing campaigns work best when they actually mean something to the customer. For example, it’s no good pushing cheesy chips to a vegan.
So you segment.
That’s where segmentation comes in – you need to know about the behaviour and preferences of the people you are marketing to. Traditionally, though, segmentation tools were limited to a single factor, such as their visit frequency, average spend, or items they often order.
That’s OK, and better than sending out scattershot email offers, it gives restaurateurs a one-dimensional view of their guests. In addition, it gives you next to no insight into the areas where your segments might overlap.
But with AI in the mix…
Artificial intelligence is now creating a step change in the way hospitality businesses segment their clientele and engage with them.
How? By taking multiple factors into account, all at once, to provide a rich picture of what customers need and want from you. It means you can respond to that and reward customers to keep that relationship and loyalty building.
NFS Technology, providers of the leading restaurant epos system Aloha, recently partnered with top customer experience platform Paytronix to put advanced segmentation with AI at their clients’ fingertips.
Catch them while you can
Chris Cartmell, NFS chief commercial officer for restaurant technology, said: “The algorithm used in this amazing segmentation has been trained using 20 years’ worth of data.”
When drawing up its segments – 12 in total, recalculated every week – the AI considers four factors for each guest:
- Total visits
- Average check size
- Average days between visits
- Likelihood of lapsing
“Assessing their likelihood to lapse gives you the opportunity to catch them before they go – the other factors mean you can re-engage by reaching out with appropriate offers that you know will appeal to them,” said Chris.
The technology creates up to 12 hyper-specific segments from the data captured, and provides tips on how to best target them. For instance, customers who are ‘High Risk” or “Sleeping Valued Members” can be drawn back with a rich reward, while new members can be coaxed into joining loyalty schemes with a nurturing campaign.
Discover top tips for customer engagement
Is it really worth it?
“Absolutely,” said Chris. “Just look at these statistics on the power of great customer engagement:
• 18-30% – increase in spend and visits attributable to loyalty programmes
• 6% – average difference between loyalty and non-loyalty checks
• 5-17% – percentage of total revenue driven by the most loyal 2-17% of customers.
Discover more about integrating AI and epos
“AI provides incredible insight to encourage loyalty – and when combined with a restaurant epos system like Aloha that creates fantastic customer experiences, it’s a powerful toolkit for restaurateurs seeking to grow guest relationships and revenues,” said Chris.
“It’s time to take a new look at how restaurants incentivise their most valuable customers – and turn the latest arrivals into loyal diners who will return again and again. AI and epos together make that happen.”
• Discover more about customer engagement: Download the Paytronix Loyalty Report 2022