In the most recent episode of Revenue Stream, Revenue Management Solutions VP of Consulting Services Chris Norton and Director of Behavioral Research Dr. Christina Norton talk about drive-thrus and restaurant loyalty trends. What can restaurants do to stay relevant and top-of-mind with customers? Here we cover some of the episode’s main points and key takeaways.
2020 was the year of the drive-thru
In RMS’ November survey of 800+ US consumers, 75% of all respondents reported visiting a drive-thru in the last two months. Sentiment matched sales, according to Chris, who notes that drive-thru share increased from slightly over 60% pre-pandemic to nearly 80% now for QSR players. The trend may have been caused by the pandemic, he says, but it’s likely here to stay.
“While we may not see drive-thru traffic remain at such elevated rates, we are seeing a seismic shift in how people interact with restaurants,” Chris says. “This is not a fad. Many of these changes are here to stay.”
Watch the full episode here.
It’s the experience, not the food
According to Christina, respondents from RMS’ survey did not rank food as their top priority when visiting the drive-thru. “Food actually ranks fourth in importance, behind accuracy, speed and service,” she says. Perhaps more shocking, RMS also reported that 1 in 2 consumers surveyed said they would not return to a drive-thru after a bad experience. With findings like these, say the Nortons, it’s clear that operators need to create an enjoyable and seamless drive-thru experience to keep customers coming back.
Using technology to improve the customer journey
The latest in loyalty? Enter the app, a small word with big ramifications when it comes to enhancing the customer experience. Restaurants can and should use technology to fuel improvements in the customer journey. Loyalty programs are a great way to start, says Christina.
When tied to an app, loyalty programs deliver a more personalized customer experience with less friction. They also create an opportunity to grab market share, which every brand is looking to do, especially from younger audiences who are more likely to join loyalty programs and value the convenience they deliver. The No. 1 reason customers join a loyalty program, according to RMS’ research, was for the added bonus of offers and promotions. Digging into the data a bit deeper, however, RMS sees new opportunities:
- Gen Z overwhelmingly chooses loyalty programs for the convenience of the technology.
- Among Gen Z and Millennials, 63% and 59%, respectively, engage with these brands on social media, indicating they also seek community and engagement from loyalty programs.
- Older generations (Gen X and boomers) are overwhelmingly driven by rewards and special offers, indicating their loyalty is to the “deal,” not necessarily the brand.
As digital natives (those who have never known a world without the internet), Gen Z and Millennials are prime candidates for brands to expand beyond a loyalty program to a robust app. Ideally, these apps serve up personalized offers and content and integrate social media so users can share content from their favorite food brands.
How to save the suggestive sale
Finding ways to sell to customers before they reach the drive-thru speaker is proving important. RMS’ drive-thru survey revealed that 68% of respondents know what they want before they even get to your location. A greater percentage (78%) say suggestive selling tactics “never” or “rarely” persuade them to change their order.
Should brands abandon the suggestive sell? Chris cautions brands not to give up on the approach but to do it differently — with technology.
Pre-menu boards improve speed (2020 SeeLevel HX Annual Drive-Thru Study), and they might be effective at changing customers’ minds, too. In the near future, Chris says, menu boards can access customer data through loyalty apps and combine it with general information, such as weather or time of day. Upsell suggestions based on this combination of data can be displayed on the menu board, which the RMS survey found is a useful tool for menu recommendations. In our November drive-thru survey, 61% of respondents said menu boards influenced their decisions.
2021 priority list for restaurants: data
If vaccines are the most effective and powerful tool to combat the virus, data is the most potent recovery agent for restaurants. “As we find out what behaviors from the pandemic stick, and which do not, data and insights are restaurants’ most valuable currency,” says Christina.
When driven by technology, personalized experiences (loyalty programs, brand apps) provide brands data and insights to predict customer behavior. The outcome is an incredibly specific roadmap for capturing customer attention and driving more traffic.
Watch all our Revenue Stream episodes here. You can also find all RMS’ consumer reports online. Launched in April 2020, RMS survey series gives additional insights to restaurant brands, operators, and franchisees searching for the way forward through the pandemic.