This post summarizes a panel presented at Food For Thought: Atlanta. To learn more about Food for Thought and upcoming Toast events in your area, click here.
Who are you trying to reach? Who does your restaurant (literally) serve?
You might say “everyone!” But if you take a closer look, that’s likely not the case. The more specific you can be about who you’re serving, the better — and it can lead you to greater profit. This is also known as identifying your restaurant’s target customer.
What is a target customer?
Your restaurant’s target customer refers to who is most likely to visit and support your restaurant because your mission, menu, and overall guest experience satisfy their needs, preferences, and wants.
Why do you need to identify your restaurant's target customer?
The restaurant industry is incredibly healthy, yet incredibly oversaturated. We’re expected to exceed $863 billion in sales this year (accounting for – potentially – 4% of the country’s GDP) and restaurant industry sales growth has increased exponentially year over year since 1970. There are more restaurants open in the United States than ever before.
In a 2018 feature in the New York Times discussing over-saturation in the restaurant industry, the author shared a stat from TDn2k that asserts the restaurant industry is currently growing at 2x the rate of the population. That’s insane. With over 1,000,000 restaurant locations in the United States, and 660,000 restaurant businesses, the odds are stacked against a first-time guest becoming a regular: A guest could theoretically come to your restaurant, leave, and go to a different restaurant every day for 1800 days.
In order to stay competitive, restaurateurs need to find effective ways to stand out and generate repeat sales. One of the most effective ways to do so is by identifying your restaurant’s target customer.
Identifying and understanding your restaurant’s target customer helps you:
Understand who is spending money at your restaurant consistently
Expand your customer base by targeting potential customers similar to those who already support your restaurant
Train staff to identify repeat customers when they’re in your restaurant and tailor their service accordingly
Improve the ROI of your restaurant marketing activities by understanding where your customers are more likely to engage with your messaging and how to communicate effectively
Pinpoint the competition as well as ways to set your restaurant apart
Decide ways to improve your menu based on your target customer’s preferences
Run relevant promotions that will improve foot-traffic and overall restaurant sales
Grow a loyal base of repeat customers
Increase word-of-mouth recommendations and favorable online reviews
Above all, investing the time, energy, and resources into identifying your target customer will help you and the rest of your staff deliver a more genuine guest experience every time.
How do you determine who your restaurant’s target customer is?
Step one in understanding who your restaurant’s target customer involves collecting customer insights in the form of anecdotal observations from your staff, coupled with cold, hard customer data.
Your aim is to uncover who is spending money at your restaurant (either in person or via digital ordering channels), how often, and why. From there, you can begin exploring ways to connect with potential guests who share similarities with this existing base of supporters and are more likely to like what your restaurant is all about.
It’s important to think of the people you are trying to attract as individuals you seek to serve, not simply a demographic segment you seek to attract. Why does this matter? Because it’ll change the way you communicate if you speak to your customers are people, not simply “targets.”
Here are a few ways to kickstart the target customer discovery process.
1. Dig into area demographics.
Who lives and works in your neighborhood? Area demographics can help determine your customer’s buying behavior and mindset. Those living in the immediate area surrounding your restaurant are most likely to make up your walk-ins.
Questions to consider:
What kind of area is your restaurant in? Are you in the middle of a college campus, a busy city downtown, or a small-town suburb?
What is the main population like in your area? Income? Age? Families or singles?
2. Analyze sales data from your restaurant point of sale
The data available in your restaurant point of sale system is a goldmine when it comes to understanding customer behavior.
Your point of sale will give you access to buying data, which menu items generate the most sales, peak business hours, and more, and it can be used to provide a complete view of your customer base.
The analytics and reporting available on Toast gives restaurants access to two key types of customer reports: A frequent visitors report and a big spenders report.
Frequent Visitors - The segment of customers shown in this report have the highest rate of visits since first becoming a customer at your restaurant.
Big Spenders - The segment of customers shown in this report have the highest average spend per visit.
Questions to consider:
Do people visit your restaurant for a quick lunch and a leisurely dinner? Or just one or the other?
When are they spending the most money? What are your most popular items? Does that data shift throughout the day or on different days?
3. Talk to your restaurant staff about their interactions with guests
Though the numbers don’t lie, they can only tell you so much about your guests. Your front of house staff are the best source of information about what it’s like to engage and interact with guests in real time. Collect their thoughts in the form of a survey or a quick check-in during meal service.
Also, observe for yourself! Undercover Boss your own store. Who's sitting at the table next to you? Are they engrossed in conversation, or glued to their phones? What’s their personality like?
Questions to consider:
Do people seem to be in a hurry or do they stop to chat?
Are there regulars? Who are they? What are they like?
Does that change throughout the day or does it remain constant?
4. Check out the competition: What do similar concepts do?
Look at the customers supporting similar concepts in your surrounding area to get a feel for who your guests are choosing when they’re not choosing to dine at your restaurant. This will help you understand ways you may be failing to connect with guests when they’re deciding where to order from or visit.
Grab a meal at a competitor’s location, or, if you’re worried they know who you are, have a member of your family or staff go in your place and reimburse them. Ask them to take notes about their experience, other guests, and ways your restaurant could be doing a better job based on what they’re seeing.
Questions to consider:
How are they attracting those diners?
Do you notice any overlaps with your customer base?
Examples of Restaurant Target Customer Types
As you begin to analyze your customer data, staff insights, and survey responses, you’ll start to notice overlaps or similarities between different guests. Train your staff in how to identify these types of guests when they’re in your restaurant; this will help you improve their experience, encourage repeat visits, and increase sales.
Here are some examples of types of target customers you may see in your restaurant:
The Foodie: For this customer, it’s all about the food. They want to meet the chef, tour the kitchen, buy a signed book. They really love to sit at the chef’s counter.
The Instagrammer: The Instagrammer is snapping and posting photos the entire meal, and really cares about presentation and vibe. They want a waiter who knows how to take a group shot and make everyone look good.
The Boomers: Comes in on the earlier side, and prefers music to be on the softer side.
The Too-Busy Bee: This person has a short lunch break and doesn’t want to wait for food. This also applies to pre-theater diners.
The Solo Act: They come for the free wifi, stays for the SOTD (Scone of the Day). A remote worker who loves (and actually needs) to spend all day in the restaurant because his roommates are tired of him.
The Family of Five: The grownups need good food but also a kid-friendly menu. They need to be in and out before the kids have a meltdown. But not too fast: they’re attempting to teach their kids to eat healthy and behave in new settings.
The Parents Weekend Group: Your restaurant is cool enough for the kids… but generally out of their budget. They come only when their parents are paying.
The Brunch Crowd: Groups of city-dwelling millennials that come in Saturdays and Sundays and will tell their friends about the avocado toast. It’s 100 percent true, as cliche as it sounds.
Now that you’ve identified your restaurant's target customer, it’s time to market to them. Check out this post about how to connect with your target customer when they’re not in your restaurant.
Find the people who come into your restaurant who embody these characteristics. Again: Not “personas” – but actual people.
Who are they? Serve them well, and they'll be regulars before you know it.