- WHITE PAPERS
By Noah Glass, Founder & CEO of OLO
Imagine a group of restaurant brand chief marketing officers secretly meeting in an underground lair to hatch a plan for the perfect marketing tool: A tool that would identify loyal customers; a tool that those loyal customers would carry with them all day, every day; a tool a brand could use to send targeted messages to their loyal customers in real time; a tool that would allow customers to make spur-of-the-moment buying decisions and wirelessly transmit money to the brand on the spot. Best of all, customers would purchase and maintain this tool without any brand interaction.
Eureka! The recent surge in smartphone adoption and mobile app usage has delivered this perfect marketing tool directly into a brand’s lap (or pocket, in this case). According to a study by Morgan Stanley, 2013 is the year that smartphones and tablets will overtake PCs, with more than 1.7 billion in use worldwide. Moreover, 50 percent of U.S. smartphone users have a restaurant-specific app on their smartphone, according to the Interactive Advertising Bureau (IAB), and, in a recent survey, more than two-thirds (69 percent) said they have placed food orders via mobile devices.
The appeal of a branded mobile app to restaurant brand chief marketing officers is clear — it provides a direct link to the loyal customer, which in turn enriches the brand-consumer relationship and provides new and powerful customer-level data.
Furthermore, branded mobile apps are becoming the rising star in the category of "owned media," meaning media that reside on a channel the brand controls. This is in comparison to "paid media" — when brands pay to leverage a channel with their media — or "earned media" — when customers become the channel, as in Facebook, Twitter, or YouTube. According to a recent report by Nielsen, owned media and earned media are more trusted than paid media in all its forms, including digital, mobile, TV and print media.
Dave Chaffey of consulting firm SmartInsight writes, "With the rise in importance of social media and online PR, we’re seeing more companies change their method of budgeting, reporting and investing in media to reflect the types of sites where audiences spend their time online. …What is new is the increasing prominence given to owned and earned media while paid media has always dominated in the past."
For restaurants, mobile apps turn every form of owned media into a point of sale. OLO’s platform, for example, allows the customer to initiate a transaction and pay directly from the restaurant’s website, mobile website, Facebook page, iPhone app, iPad app or Android app. This makes owned media transactional. It enables a two-way commercial interaction in which the brand makes an offer and the customer buys in real time. When done the right way, this enables the brand to track multiple purchases back to the same customer, measure which communications induce a transaction, and better understand its loyal customer base at the holistic and granular levels. That direct relationship with customers and the data that relationship can provide are extremely powerful. Brands should be careful not to underestimate that power – in it lies true customer intelligence.
Combining owned media with the capability for customers to register and create accounts helps to turn these customers into loyal members of your brand. And that means truly owning your customer relationships. Too often, brands rely on third-party middleman marketplaces to provide them with core technology capabilities. These marketplaces have ulterior motives in mind – seeking to disrupt the brand’s direct relationship with its customers. Through software-as-a-service (SaaS) providers of branded mobile ordering apps, restaurants can afford to say “no” to the middleman and create their own branded apps, gaining both brand awareness and customer loyalty through owned media.
Loyal customers walking around with your branded mobile app on their smartphones make for the perfect marketing tool for restaurant brands. No underground lair required.
Noah Glass is the Founder & CEO of online and mobile ordering provider OLO. Founded in 2005, OLO has raised $13.75M in funding from PayPal and leading venture capital firms. Glass has been featured in stories on “Good Morning America,” in The Wall Street Journal and on ABC World News, highlighting OLO’s innovation.
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