Article

Why Firehouse, Jason's Deli rely on customer analytics

It's important to understand who your customers are, so you can better evaluate how to get close to them.

August 28, 2013

By Stephen Polanski, Buxton

The category may be called fast casual, but there's nothing casual about the way leading players are using customer analytics to define their growth strategies. Currently, fast casual is experiencing rapid growth; in the next 5 years, the category is projected to expand by an impressive 29 percent. Because of the sheer speed of growth, brands have to think and move quickly in a number of areas, including spotting opportunities, determining who their best customers are and exactly what they want and identifying the best markets, regions, and sites for expansion. That's where customer analytics come in; they help fast casual operators support and give validity to their decisions in these and other fundamental areas.

Why tracking customer analytics is important

Customer analytics combines the data restaurants have on their own customers with outside databases to create a new, robust picture of who a brand's best existing — and potential — customers are. For brands that do not have existing customer databases, information can be gleaned through companies and services that are aligned with major credit card companies.

Stephen Polanski

The irony is that, in the information age, companies are sometimes overwhelmed by the sheer quantity and scope of available data. The key is to find the right data, and interpret it in a way that yields meaningful, actionable insights.

"There is a lot of noise in customer data," said Lee Greer, chief strategy officer of Jason's Deli. "This prevents companies from listening to the right customers. Listening to the right customers is critical, because most businesses derive a majority of revenue from a minority of customers. Listening to profitable customer segments helps us understand their needs, and shape the customer experience to meet them."

Once a brand's best customers are identified, an equally intense effort must be made to find out where they are, and what locations provide easy access to them.

For small chains that are intent on growth, evaluating the best possible sites can have a tremendous impact on revenues,which in turn will influence how quickly they are able to grow.

Austin-based How Do You Roll? has 12 locations and plans to open four more this year. Clearly, when it comes to site evaluation, their focus is on quality.

"As we continue to strategically expand, customer analytics will bring us a granular view of our customer and help us make smarter real estate decisions," said CEO and co-founder Yuen Yung.

For chains with aggressive growth plans, customer analytics isn't a luxury; it's a necessity. Firehouse Subs plans to open 139 restaurants in 2013, and hopes to hit the 2,000 mark by 2020. For them, evaluating the potential of specific locations is crucial to hitting long-term goals.

"When franchisees bring potential sites to us to evaluate, we use customer analytics to evaluate where concentrations of core customers are, and make sure the location is properly positioned within the trade area," said Vice President of Real Estate Services John Namey. "Customer analytics has helped us refine our strategy, and has given us greater confidence in the decisions we make regarding the trade areas we're doing business in."

Understand who your customers are. Evaluate which locations put you in close proximity to those customers. On the surface, it doesn't sound like rocket science. But as the universe of customer data expands, and as competition grows more fierce, the act of zeroing in on the best prospects, locations and opportunities is very quickly becoming a science all its own.

The use of customer analytics has already made a difference for many fast casual operators. How will it make a difference for you?

Stephen Polanski is senior vice president at Buxton, the leader in retail customer analytics with nearly two decades of experience in the restaurant industry.

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