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Getting to Know Your Customers

Presented by Robert Byrne

05/19/2019

Getting to Know Your Customers

• Navigating the modern

diner• Mixed messages

• Exploring drivers of

visitation• The silent majority

• Behavioral data meets

guest experience• Smashburger case study

Navigating The Modern DinerWhat is signal and what is noise?

Consumers Send Us Mixed Messages

34%“Tech-enabled ordering is important when selecting a limited-service restaurant”

52%Two-year growth of online orders at limited service restaurants

Interest in Gluten-Free Items

Gluten-free21%

Willing to pay more

27%Not willing to pay more

51%Not a factor

How do these attributes affect your food and beverage purchasing decision at restaurants or grocery stores?Base: 1,500 consumers 18+Source: Technomic Healthy Eating Consumer Trend Report

Contradictory Consumer?

Gluten-free21%

Willing to pay more

27%Not willing to pay more

51%Not a factor in purchase

How do these attributes affect your food and beverage purchasing decision at restaurants or grocery stores?Base: 1,500 consumers 18+Source: Technomic Healthy Eating Consumer Trend Report

Is Vegan On-Trend?

Gluten-free21%

Willing to pay more

27%Not willing to pay more

51%Not a factor in purchase

Vegan20%

Willing to pay more

23%Not willing to pay more

57%Not a factor in purchase

How do these attributes affect your food and beverage purchasing decision at restaurants or grocery stores?Base: 1,500 consumers 18+Source: Technomic Healthy Eating Consumer Trend Report

Appeal of Plant-Based Items?

Gluten-free21%

Willing to pay more

27%Not willing to pay more

51%Not a factor in purchase

Vegan20%

Willing to pay more

23%Not willing to pay more

57%Not a factor in purchase

Plant-based27%

Willing to pay more

31%Not willing to pay more

42%Not a factor in purchase

How do these attributes affect your food and beverage purchasing decision at restaurants or grocery stores?Base: 1,500 consumers 18+Source: Technomic Healthy Eating Consumer Trend Report

Exploring Drivers of VisitationThe invisible guest may be the majority

What Makes You Top-of-Mind?

15%

16%

32%

45%

49%

Others wanted to go there

Has favoritefood/beverages

Craving an item, flavor, etc.

Near my home

A usual go-to location

What made you think of this restaurant?

Base: 1,000 consumers 18+Source: Technomic Ignite Consumer Survey

Base: 106,427 recent guests at a chain trackedSource: Technomic Ignite Consumer

I chose this restaurant to

satisfy a craving

35%

Base: 106,427 recent guests at a chain trackedSource: Technomic Ignite Consumer

36%44%Intent to return among recent

guests that came to satisfy a craving

Intent to return among recent guests that came for all other need states

We Often Hear…“We get all our insights from our loyalty program”

We Often Hear…“We get all our insights from our loyalty program”

80%Do not belong to a loyalty program

Consumer average across restaurant segmentsBase: 1,000 consumers 18+Source: Technomic Ignite Consumer ad hoc survey

RestaurantVisit FrequencyTop U.S. chains

More than once a month

14%

Less than once a month

71%

Once per month15%

Base: 106,427 recent guests at a chain trackedSource: Technomic Ignite Consumer

According to Starbucks…60 million guests visit their stores each week

16.3 million active loyalty program members

What About the Majority of My Guests?What can they teach me, and how can I use it? Less than

once a month71%

Once per month15%

Base: 106,427 recent guests at a chain trackedSource: Technomic Ignite Consumer

Less frequent guests = significant opportunity

Behavioral Data Meets Guest ExperienceA Smashburger Case Study

Sales and Traffic

7.4

0.4 -0.4

1.6

-4.0-6.2

-9.6

-8.7

-9.2 -9.7

-11.6-13.4

11.8

2.1 2.2

-3.2

-8.2 -8.1

-10.8

-8.2

-10.1-11.6

-10.2 -9.6

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Smashburger Sales & Traffic(vs same quarter prior year)

Traffic Chg Sales Chg

Financial metrics reflect positive and negative changes to health of business

Source: Technomic Transaction Insights

Guest Experience Tracking 57%

54%

49% 50%

50%48% 47%

49%

2016 2017 2018 2019 (YTD)

Excellent Overall Visit Satisfaction(top-box rating)

Smashburger Burger Chain Avg

Critical measures derived by voice of customer provide the why behind the move

Base: 700 recent guests per chain tracked per periodSource: Technomic Ignite Consumer

Putting It All Together

Track changes in

ratingsUse change in top-box

scores from same period one year ago to match

sales and traffic measures

Remove the frequent visitors

Strip out affinity bias by looking only at consumers that are light users of your

brand

Shift calendar to

predictRatings changes from Q1

2018 are compared to sales and traffic changes

in Q3 2018

Charting Sales Correlations 11.8

2.1 2.2

-3.2

-8.2 -8.1

-10.8-8.2

-10.1-11.6

-10.2 -9.6

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Smashburger Sales(vs same quarter prior year)

Traffic Chg Sales Chg

Pattern of continued quarterly decline noted

Source: Technomic Transaction Insights

Establishing The Data Connection

2.4

11.8

8.8

2.2-0.4

-6.4-3.7

-0.2 -0.2

-3.5

-8.1

-2.4

11.8

2.1 2.2

-3.2

-8.2 -8.1-10.8

-8.2-10.1

-11.6-10.2 -9.6

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Sales + Attribute Change(vs same quarter prior year)

"Welcoming Atmosphere" Sales Chg

Smashburger sales decline pattern correlated to decline in attribute rating

.68 correlation coefficient

Base: 700 recent guests per chain tracked per periodSource: Technomic Ignite ConsumerSales Source: Technomic Transaction Insights

Charting Traffic Correlations

0.9

4.12.9

4.83.0

-4.5 1.2 1.02.7 1.9

-8.4

-11.8

7.4

0.4 -0.41.6

-4.0-6.2

-9.6 -8.7 -9.2 -9.7-11.6

-13.4

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Traffic + Attribute Change(vs same quarter prior year)

"Kid-Friendly" Traffic Chg

Smashburger traffic decline pattern correlated to decline in “kid friendliness”

.59 correlation coefficient

Base: 700 recent guests per chain tracked per periodSource: Technomic Ignite ConsumerSales Source: Technomic Transaction Insights

Highly Correlated Metrics

Based on voice of less frequent guests, ambiancecorrelates strongly to Smashburger performance

Base: 700 recent guests per chain tracked per periodSource: Technomic Ignite ConsumerSales Source: Technomic Transaction Insights

Guest Experience

Measure

Smashburger

Sales Correlation

Smashburger

Traffic Correlation

A welcoming,

comfortable

atmosphere.68 .66

Clean restaurant

interior.65 .63

Provides value through

quick, high-quality

service.65 .60

Portion size for price

paid.62 .69

Decor .62 .67

What Might Smashburger Do?

Divide guests into discrete

groups based on frequency

Assess size and financial impact

of guest populations

Correlate guest experience measures

against populations separately

Broadly communicate

changes/ strengths in critical areas

Allow output to help prioritize

initiatives

Thank you!

Behavioral data provides

the what

Only consumer data can

reveal the why

Blended analysis

needed to know your customer

Robert Byrne

Sr. Manager, Consumer Insights

Rbyrne@technomic.com