Ultimate Guide to Restaurant CDP and CRM

February 7, 2024
Read Time: Example Minutes

Does your Restaurant Need CRM, CDP or Both? Here’s Everything You Need to Know

Tech ecosystems are constantly evolving, so it’s no surprise that it can be difficult for busy restaurants to keep pace. SaaS platforms, analytics tools, and the very discipline of leveraging data to make business decisions can be daunting to wade through and discern what you need for your restaurant. While there is some overlap between what a customer relationship management (CRM) system can do and what a customer data platform (CDP) can do, they serve distinctly different functions, and more often than not, work best and most effectively in tandem. In fact, a CDP is often referred to as a CRM database, which gives you a clue as to how they work together. Most restaurants have at least a cursory familiarity with CRM tools. The concept and reality of a CDP is a relatively new addition to the tech landscape, and certainly new to the restaurant tech stack. It’s easy to understand why many restaurants have trouble understanding what it is, and whether they need a CDP in conjunction with a CRM. In fact, for most restaurants, utilizing both in concert is key to staying competitive in today's market. In this guide, we’ll walk you through everything you need to know about Restaurant Customer Data Platforms (CDPs), and help you understand how a CDP is critical to your restaurant’s business needs and how it works in concert with a CRM.

What is a CDP, and Why Would a Restaurant Want One?

A CDP is a platform that aggregates, organizes, and enriches customer data from a wealth of different sources. This includes software you use for table management, reservations, payments, orders, checks – as well as third party systems,reviews, check-ins, social posts, delivery apps, loyalty programs, sites visited, and ad data, for instance. In other words, a CDP takes guest data from your various platforms and organizes it, allowing you to build robust customer (guest) profiles that are surfaced to you in your restaurant CRM. In fact, one of the main purposes of a CDP is to create high-level and actionable business insights, such as understanding which customers provide the most revenue over time and how to find more of them most efficiently, or easily viewing your revenue across platforms and dayparts to identify strengths, weaknesses, and opportunities. Best of all, it does it all without the need to manually collate reports from different sources or enter data by hand, allowing management and staff more time to work on higher level tasks and helping with retention.

What is a CRM, and Why Does My Restaurant Need One?

The purpose of a CRM is all in the name – Customer Relationship Management. It’s a platform or software suite that’s designed to help you foster a better relationship between your restaurant and your guests. It helps collect and organize data to provide you with critical personal details like name, favorite dishes, birthdays and anniversaries, past orders, reservations, loyalty program redemptions and interactions with staff, promotions, communications and events. More advanced CRM platform software can also help you identify broader trends, segment by more than simple demographics and tailor your promotions and offerings to the customers who would be most likely to appreciate them. Alone, CRMs alone are limited because they can’t see beyond your own systems and first-party data, so they don’t allow for the level of insight and personalization you can access when you pair a CRM with a CDP.

CDP vs CRM for restaurants: Understanding the difference.

An easy way to understand how restaurant CRMs and CDPs are different is that a CRM help you manage the one-to-one and one-to-many relationships with your guests, while a CDP is a layer that can add additional context to understanding guest behavior, and is useful for generating large-scale insights that can help you optimize results across your organization.

A CDP offers a deeper understanding of your customers.

A restaurant CDP can access a broader pool of customer data, offering visibility beyond the limitations of your own direct interactions. A CDP can tell you what sites your highest value customers visit, so you can optimize your media spend. It can show you whether your best in-restaurant customers are also your best delivery customers. It offers a much more accurate picture of the lifetime value (LTV) of every customer you acquire, which leads to a more accurate understanding of the cost per acquisition (CPA), and how many steps it really took for you to acquire them. Used in concert with an advanced CRM system, CDPs also help better segment and personalize your outreach efforts. In other words, you can get more accurate insights into who your best customers are, what they love and don’t, and how to optimize your budget to acquire more of them.

A CDP can help you improve your restaurant’s customer experience.

A CDP enables you to track customer feedback, both positive and negative, and connect that information with actual guest behavior. This means that you can understand what your best customers love and what could be improved. This can help you create menu changes that increase frequency; help you fix potential problems such as wait times before they become an issue; give you a deeper understanding of which among your staff are your highest performers; and flag any changes in food quality instantly.

One-Star Review Reply, Etta Chicago, 23 February 2024

A CDP lets you see trends in real time.

As data is automatically updated, you can get an up-to-the-second view of how your business decisions are affecting your sales. This allows you to understand how even small shifts can impact your bottom line. This can be useful to gauge whether changing a supplier impacts your sales, whether your restaurant is over or understaffed or whether there are sudden shifts in a particular dish’s popularity.

A CDP allows you to sharpen your restaurant’s marketing efforts.

If you know your highest-value customers are very interested in farm-to-table, for instance, you’ll know to focus on the quality of your suppliers in your communications to them. While a CRM might tell you that your customers act a certain way, a CDP can help you determine why, and that can make all the difference in ensuring that every communication you send has the greatest impact on the recipient.

A CDP combined with a CRM can have a huge impact on profitability.

According to a recent study, companies using a both platforms saw: 9.1X increase in guest satisfaction 2.9X revenue growth 5.7X increase in customer spend 4.9X annual growth in up-sell revenue

Do I need a CDP and CRM?

We’ve shown you a CDP combined with a robust CRM can be an important tool for restaurants, but are they the right choice for your restaurant? Here are a few questions to ask to help determine whether one might be right for your business.

Do you struggle to understand whether you’re targeting the right customers with your marketing?

A CDP combined with a CRM can help ensure that your marketing and promotions target your highest value customers, rather than those who will visit once and never again.

How well do I understand which guests have the most impact on margins?

Who are your most profitable guests? Who are the ones talking about your restaurant, inviting others, ordering takeout when they can’t visit in person? What do they love about your menu? What entices them to keep coming back? Using a combination of a CDP and CRM will help you answer questions like these.

How much time are employees spending on repetitive tasks that could be automated instead?

Collating reports, manual data entry, combining analytics from different sources – all these repetitive tasks can eat away at employee satisfaction and take away time that could be spent to grow the business. A CDP can address this.

How confident are you that your KPIs are correct?

Key performance indicators (KPIs) are the benchmarks for any restaurant’s success. By helping you see the impact of any changes you make across your business and across a customer lifecycle, a CDP and CRM can revolutionize how you measure and understand what works and what doesn’t.

Can you track the impact of the most important business decisions you make?

A CDP allows you to gauge how everything from menu and supplier changes to employee hourly shifts impact profit margins and guest satisfaction instantly. If you’ve had issues where an improperly vetted decision has cost you in guest receipts, turnover or margins, a CDP is one way to prevent that from happening again.

Key features to look for in a CDP and CRM combo.

A wealth of data sources.

A CDP and CRM are only as good as the information they draw from. A good CDP will allow you to easily connect to data from across your tech stack – POS, marketing automation, online ordering, third party delivery apps, in-restaurant WIFI, reservation systems, loyalty programs and many others.

Sophisticated analytics tools.

A pool of high-quality information can’t help you if your CDP and CRM don’t have the tools you need to turn insights into action. A great CDP/CRM combo will have a wide variety of reports it can generate that will give you the foundation you need to make the strategic and tactical business decisions that really matter.

Ease of use.

An intuitive user interface and a searchable knowledge base can save you hours on the phone to customer support. Make sure your CDP-CRM has both.

Privacy law compliance.

Because both a CDP and CRM track and store data about your customers, choosing a trusted and experienced company with an extensive record in complying with General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) is key.

The ultimate optimization tool for any restaurant.

Restaurants have had a lot to contend with a lot in the past few years. Rising costs, staff shortages, economic uncertainty – all have made profitability harder to maintain than ever. A CDP+CRM can help ensure that the most important business decisions have the greatest possible impact. This makes either or both an excellent choice for any restaurant looking to grow business and maintain margins, no matter what the future has in store. Want to actually see the difference a CDP+CRM can make in your restaurant today? Try Fishbowl GRM – an all-in-one solution that combines the industry’s best Restaurant CRM and CDP, offering in one easy-to-use and even easier-to-integrate Guest Relationship Management platform.

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Adam Ochstein
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