The Power of Customer Segmentation in Restaurant Marketing

Blue Oak BBQ is a beloved barbecue restaurant located in New Orleans, Louisiana. The restaurant has gained popularity not only for its delicious food but also for its scrappy approach, including successful pop-up shops and savvy storytelling of the two founders and friends, Ronnie Evans and Philip Mosley. Through their dedication to providing exceptional barbecue and their clever marketing techniques, Blue Oak BBQ has become a staple in the New Orleans food scene and beyond.

The article highlights how Blue Oak BBQ transformed their scrappy marketing approach from pop ups, establishing and expanding their physical locations and using digital marketing to build a strong brand awareness and loyal customer base.

What is customer segmentation, anyway?

Customer segmentation is the process of dividing customers into specific groups based on shared characteristics such as demographics, behavior, and preferences. By segmenting customers, businesses can tailor their products, services, and marketing efforts to meet the unique needs of each group.

Before we dive into the benefits of customer segmentation, it is important to note that customer segmentation has the biggest impact when sales, marketing, customer experience and operations are working together using the same human insights to achieve a shared goal.

The benefits of customer segmentation

1. Personalized experiences: By understanding each customer segment's preferences and behaviors, businesses can create personalized experiences that resonate with their target audience.
2. Targeted promotions: Customer segmentation allows businesses to target specific customer groups with tailored promotions and offers, increasing the likelihood of conversion.
3. Improved customer satisfaction: By catering to the unique needs of each customer segment, businesses can improve overall customer satisfaction and loyalty.
4. Increased revenue: Targeted marketing efforts and personalized experiences can lead to higher conversion rates and increased revenue for businesses.
5. Better decision-making: Customer segmentation provides businesses with valuable insights into their target audience, enabling them to make data-driven decisions that drive business growth.

How can we radically personalize the Blue Oak BBQ experience?

In 2016, Blue Oak BBQ implemented an innovative MVP strategy to evaluate their product market fit. The news of their pop-up barbeque brand spread like wildfire on social media, catching the attention and excitement of BBQ lovers in New Orleans and beyond. Everywhere Blue Oak BBQ set up a pop up shop, the crowd would eagerly follow, thanks to the power of their brand's online presence.

In 2018, The Ronnie and Phil, the co-founders of Blue Oak BBQ made a decision to open their first brick-and-mortar in New Orleans. Opening your first restaurant location always comes with great reward and some challenges.

The challenge

"What can we learn from our customers, so we can craft a more personal engagement and dining experience."

Ronnie Evans, co-Founder and CEO, Blue Oak BBQ

Ronnie and Phil, the co-founders of Blue Oak BBQ, were determined to find a straightforward and effortless method to collect customer insights with consent. They recognized that the rate of acquiring new customers through their website and social media channels did not offer the necessary information to develop a more personalized customer marketing strategy.

This is how we helped Blue Oak BBQ.

Active subscribers under management: Over 40K

To successfully implement a personalized marketing strategy, Ronnie recognized the need to grow their customer data, specifically from those who have had the pleasure of dining at Blue Oak BBQ.  The Blue Oak BBQ team had specific requirements:

• The solution must be easy to easy to implement.
• Frictionless for the front-of-the house team.
• A valuable amenity that guests appreciate.

Implementing Wi-Fi marketing, an effortless in-store customer acquisition strategy that integrates with digital

Streamlining in-store customer acquisition is made effortless with GoGoGuest captive portal technology. GoGoGuest connects to your ISP network through a wireless Access Point. This setup process is as simple as setting up a Wi-Fi SSID for your home, POS system, security system, and cameras.

This modern approach to customer acquisition is known as Wi-Fi marketing.

What is Wi-Fi marketing, anyway? Wi-Fi marketing, is a powerful solution that allows restaurant businesses to capture customer data and build a subscriber base with permission.  It works by offering a guest Wi-Fi amenity to customers in exchange for their contact information. Wireless networks are also a great source for foot traffic data and analytics.

Results

• Blue Oak BBQ launched the GoGoGuest Wi-Fi captive portal technology to build their subscriber base from 0 to over 40,000 active subscribers today.
• More than half of Blue Oak BBQ's customer base actively engages with the brand through their inbox, demonstrating high levels of personal interest and connection.
• Dine-in service consistently outperforms every other sales channel by an impressive 30%.

Now, you may be wondering how customer segmentation fits into this impressive achievement.

Unlocking the power of customer segmentation: Lessons from Blue Oak BBQ

Having successfully gathered over 40,000 subscribers through Wi-Fi marketing, Blue Oak and GoGoGuest implemented dynamic customer segments to help them understand visit frequency and the demographics of those groups.

• First-time visitors
• First-time visitors who visit after a week
• First-time visitors who visit after 30-days
• First-time visitors who visit after 180 days or more

With a clearer understanding of the visit rate among first-time visitors, the Blue Oak BBQ team turned their attention to validating the reasons why certain customers returned more frequently than others.

Here's what we discovered about Blue Oak BBQ's first-time visitor customer segments:

• The first-time visitors at Blue Oak who visited after a week are locals who love Blue Oak BBQ's Daily Special program.
• The first-time visitors who visited after 30-days, lived about 25 miles or more from Blue Oak BBQ. They were a fan of the Daily Special Program while the majority of the segment look forward to their BBQ dining experience with friends and family.
• Meanwhile, the first-time visitors who did not return until after 180 days or more.

With 40,000 active subscribers under management and vast amounts of data sets, the Blue Oak BBQ put on their thinking caps to come up with a easy to implement personalization strategy, that elevates the brand's customer experience.

Thanks to the GoGoGuest's dynamic customer segmentation tools, we found it incredibly simple and straightforward to identify the most valuable customer segments to focus our personalization efforts on.

Ronnie Evans, co-Founder and owner, Blue Oak BBQ

By analyzing their dining preferences, frequency of visits, average spend, and even their preferred menu items, Blue Oak BBQ identified trends and patterns that informed their personalization marketing strategy.

To implement a personalization strategy, the Blue Oak team followed these steps:

Implementing a personalization strategy is crucial for restaurants looking to enhance the customer experience and drive business success. By tailoring experiences to meet the unique needs and preferences of individual customers, Blue Oak BBQ restaurants created a competitive advantage that sets them apart from the competition.

Here are some key steps for implementing a successful personalization strategy:

1. Collect customer data: Gather information about your customers, such as their frequency of visit, purchase history, preferences, demographics, and behavior.
2. Analyze customer data: Use data analytics tools to analyze customer data and identify patterns, trends, and insights that can help you understand your customers better.
3. Segment your customers: Divide your customers into different segments based on common characteristics or behaviors. This segmentation can be done based on factors like age, gender, location, purchase frequency, or preferences.
4. Personalize customer interactions: Use the insights from customer segmentation to personalize your interactions with customers. This could include sending personalized recommendations, offering customized product suggestions, or tailoring promotions and marketing messages to specific customer segments.
5. Implement personalized marketing campaigns: Develop targeted marketing campaigns that are tailored to each customer segment. This could involve sending targeted emails, creating personalized website experiences, or offering exclusive promotions to specific customer groups.
6. Measure and optimize: Track the performance of your personalized marketing campaigns and measure their impact on customer engagement, satisfaction, and revenue. Use this data to optimize your personalization strategy and make improvements over time.

By following these steps, you can effectively implement a personalization strategy that enhances the customer experience, increases customer satisfaction, and drives revenue growth for your business.

Creating personalized marketing content becomes significantly easier when you have a deep understanding of your customers

Once Blue Oak BBQ identified the different customer groups in their vast audience, Blue Oak BBQ needed to come up with marketing programs to support the new information gleaned from the data and insights.

Here are some of the customer segmentation data points that the team landed on:

• Personalized content activation at the top of the customer acquisition funnel
• Send local offers focused on local customers
• Entice out-ot-town guests with eCommerce products and gift cards  
• Recognize customers who purchase a daily special 2x a week
• Encourage customers who purchase a daily special on a weekly basis to increase their # of visits each week
• Customers who frequently purchase catering for special events
• Reward guests with 3 or more visits
• Prioritize and elevate advanced catering orders with a special personalized offer

Customer segmentation and personalization have proven to be game-changers for Blue Oak BBQ, helping them increase their profitability and drive sales. The dynamic customer segmentation tools from GoGoGuest made it easy for Blue Oak BBQ to easily identify their most valuable customer segments and focused their personalization efforts on them.

Customer segmentation also allowed Blue Oak BBQ to identify and prioritize their most valuable customers. By focusing on the high-value segments, they improved customer loyalty and increased the lifetime value of their customers. Not convinced? Learn about ten more case studies on how to implement a successful data management strategy.

Conclusion

The power of customer segmentation and personalization cannot be underestimated in restaurant marketing. Blue Oak BBQ's success story serves as a testament to the benefits of understanding customers on a deeper level and tailoring marketing strategies to cater to their unique needs and preferences. By leveraging customer segmentation and personalization, restaurants can boost their sales performance, increase customer satisfaction, and build a loyal customer base.

If you're a restaurant owner or marketer looking to take your marketing efforts to the next level, consider implementing customer segmentation in your strategy. Invest in tools and technologies that allow you to gather data and insights about your customers, and use that information to create personalized marketing campaigns. The benefits are clear – higher profitability, increased customer loyalty, and a competitive edge in the market. Get started today.

Next steps

So why wait? Start leveraging the power of data, customer segmentation and automation in your restaurant marketing today and watch your business thrive. Book a demo or try GoGoGuest.