The Role of Databases vs. CRM
Managing the digital side of your restaurant can be a daunting task. When it comes to organising and utilising customer information, the two key players in the game are databases and Customer Relationship Management (CRM) software. While these terms might sound like tech jargon, understanding the difference between them is crucial for streamlining your operations. Let's compare databases and CRM software and explore how they can benefit your business.
The Basics:
Databases: A database is like the digital filing cabinet of your restaurant. It's where you store and manage vast amounts of organised and easily accessible information. Think of it as a warehouse for your customer data, housing everything from customer names and contact details to order history. Databases are the backbone of any venue's digital infrastructure, ensuring your information is structured and easily accessible. Databases generally include information such as customer’s names, addresses, phone numbers, emails and comprehensive details about their dining/purchase histories. Businesses usually get this information through staff entering it post guest attendance, POS integration, website sign-ups, loyalty programs, competitions, newsletter subscriptions, product warranty cards and abandoned shopping carts.
CRM Software: CRM software on the other hand, takes customer data to the next level. It's like having a personal assistant dedicated to building and maintaining relationships with your customers. CRM tools help you analyse customer interactions, track preferences and provide key insights to enhance the overall customer experience. It's not just about storing data; it's about leveraging that data to foster stronger, personalised connections with your audience.
Note: While database marketing falls under the CRM umbrella, it is a more data-driven approach that often utilises email as its platform. CRM is a more process-driven approach; compiling customer data from multiple channels including a company website, phone logs, live chat, direct mail, marketing materials and social media.
So What Do You Use Them For?
A lot of the advantages of having a good database and CRM software become obvious is when it comes time to reach out to customers through clever marketing strategies. Having the data, and just as importantly having enough information that it can be segregated, is critical for setting up personalised and compelling outreach to customers. Some benefits of database marketing include the ability to identify and segment customer groups; the ability to send relevant content and personalise the customer experience; improved marketing efficiency and effective customer loyalty programs. Benefits of CRM marketing include very personalised customer messaging, detailed analytics, often a centralised dashboard to visualise progress status, automated funnels and replies, automated email follow-up and being able to capture and nurture leads that could become customers.
Choosing the Right One
The question becomes: which one does your restaurant need? Well, the answer lies in finding the right balance.
If You're Just Starting Out: If your restaurant is still in its early stages, focus on building a solid database foundation. Ensure that your digital infrastructure can handle the basic capture of customer information with as much detail as possible. As your business grows, explore integrating CRM tools to elevate your customer relationships.
If You're Looking to Enhance Customer Relationships: Already have a database in place? Fantastic! Then consider incorporating CRM software to take your customer relationships next level. Understanding your customer preferences, tailoring menus for them, celebrating milestones with them, offering personalised promotions and making them feel like you genuinely value their custom can set you apart in such a competitive hospitality scene.
Don’t Have Either? Then It’s Time To Start.
On that note, be careful that you are building things correctly (i.e. with a lot of information) from day one. I worked in a very famous restaurant that claimed to have a great database of 50,000+ loyal customers. When we looked at it a little deeper, all the customers over the years had been tossed into the database with one or two basic tags: “friend of owner” or “VIP”. You can see that (even though we had their email) that’s not a particularly useful data set to market events, offers and EDM’s to, because our option was only to send it to everyone. And since that’s all we could do, that’s exactly what we did. We created a generic EDM saying that the restaurant was evolving and that we were updating our records, hoping that we could keep everyone in the loop with our story and offers in the future. The open rate of the EDM was surprisingly good (over 50%). About 30% of the replies asked us to delete their email details; a lot of them confused how we had it in the first place. The remainder signed on and filled out our form, telling us some basic info that we could then start to build a useful database from. I still think back now to how much better it could have been if things were kept well from day one..
These days there are some pretty strict laws about the collection of people’s information, so make sure you’re transparent about what you’re collecting and why, always giving people the option to decline. There’s no point getting a person’s info that blatantly isn’t interested; it makes you look spammy and they’ll probably never visit you anyway. It’s important to keep your brand in a positive light as much as possible.
Cheers to a successful digital dining journey!
See you in the next one!
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