Olo’s Post

Does it feel like you’re gambling with your marketing budget? John Wanamaker, the Philadelphia department store magnate, famously said in 1922: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” 102 years later, much of the restaurant industry still grapples with the same dilemma. Despite technological advances, many restaurants struggle to pinpoint the effectiveness of their marketing efforts. Today’s restaurant executives understand that marketing ROI is more art than science. This is especially true in a landscape cluttered with daily deals and third-party marketplaces, where traditional earn-and-burn loyalty programs often lack the strategic context necessary for true guest engagement. Restaurants need efficient and effective marketing strategies to drive traffic, boost check averages, and attract new guests. Enter Five Guys Enterprises. After decades of grassroots marketing, Five Guys has grown into a personalized marketing strategy. Steve Teller, VP of Digital Strategy at Five Guys said it best, “Olo Engage allows us to take the Five Guys experience our founders provided guests in 1986 and apply it to an enterprise.” These personalized marketing efforts drive profitable acquisition, retention, and growth through customer lifetime value (CLV), or guest lifetime value (GLV) as we like to call it at Olo. GLV determines how valuable a guest is to your business based on recency, frequency, and spend using the data a restaurant already collects from all sorts of touch points, including order and payment data. Over a six month period with a group of 150 restaurants, Five Guys launched several data-driven campaigns, including an email inviting guests to add Reese’s Peanut Butter Cups to their milkshakes. This small suggestions yielded sweet results: 1.2k unique orders, accounting for $2 million in sales and an increase in overall shake sales by 1%. Industry wide, 70% of restaurant guests never return after their first visit, while the top 15% of guests drive 50% of sales. Knowing who your highest-value guests are and how to engage them is crucial. Restaurants can leverage guest data to nurture their top guests and also encourage behavior change of non-top GLV guests (i.e. offers to try a high attachment entree). Want to increase marketing effectiveness? Start by asking: what’s your average GLV? If you’re searching for the answer, Olo can help.