Driving Restaurant Sales: A Guide to Customer Data Analytics & Loyalty with Abhinav Kapur (Ep 246)
Dive headfirst into the data revolution sweeping the restaurant industry! In this episode, host Jaime Oikle dives deep into the world of restaurant customer data analytics with Abhinav Kapur, co-founder and CEO of Bikky. Abhinav shares his journey from identifying the data gap in the hospitality industry to creating a powerful tool that helps restaurants understand and leverage customer insights. Discover how analyzing menu data can drive loyalty, why customer lifetime value is crucial (it's WAY more than just that one sandwich!), and how personalized marketing can triple your conversion rates. We explore how Bikky integrates seamlessly into existing restaurant tech stacks and even sneak in some personal life wisdom and book recommendations. Get ready for a data-driven future where restaurants thrive by understanding the people behind every transaction, turning casual diners into lifelong fans!
Find out more at https://www.bikky.com/
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Driving Restaurant Sales: A Guide To Customer Data Analytics & Loyalty with Abhinav Kapur
Coming up on this episode of the show, we dive into data. I just love talking with Abhinav Kapur, founder of Bikky about what his company is helping restaurants do with customer data to drive sales and profits. Abhinav, share a company overview with us, and we will dig in from there.
Unlocking Restaurant Success: A Data-Driven Approach
Absolutely. First of all, thank you so much for having me. It's a pleasure to be here. I'm Abhinav Kapur, co-founder and CEO of Bikky. We are a customer data and analytics tool for restaurants. The high-level way to think about it is that most restaurants, unfortunately, despite being in the business of hospitality, don't really know anything about the person behind the transaction.
I saw this firsthand with my mother-in-law, who's been a restaurant operator in New York City for twenty years. She was literally emailing people after they made a reservation on OpenTable, calling people who made delivery orders, and scrambling around all these different parts of our tech stack, just trying to figure out who are these people? What do they care about? What makes them loyal? Are there things that I can do that make them come more frequently?
That inspired me to start a company rooted in this idea of like, “If this business is becoming increasingly digital, and the pandemic fast-forwarded five years of that digitization. How do we help restaurant operators collect this data and not just collect it, but understand it and understand the people behind it so that they can make smarter decisions across their menu, across their marketing, across their operations to do the things that increase new guest traffic, customer frequency and customer lifetime value.?” We pull the data together. We do all the analytics on top of it. We also provide some marketing tools on the backend. Restaurants can communicate directly with those guests as well.
I want to follow up on a bunch of that stuff. I spent some time on the website, and before we go there, tell me about the journey of the company. How long you've been around? Are you geographically targeted? Do you work anywhere in the country, anywhere in the world? What do you got?
I started the business almost eight years ago, on May 2nd, 2017. We're coming up on the eight-year incorporation anniversary here. Again, I was inspired by my mother-in-law and just seeing her firsthand. Being in the front of house 6 days a week, 12 hours a day, and touching every table was the only way that she really had any interaction with her guests. At the same time, like I said, her business was becoming increasingly digital.
When I looked at her tech stack, she had like ten years of phone numbers in her POS, ten years of open table data, five years of online ordering data, and some delivery data as well. I was like, “How do we just automate your version of hospitality almost, or extend it beyond your four walls by giving you access to all of this underlying data?” I would say when I started the business, it's probably too early. I don't think anybody, even my mother-in-law, really cared necessarily about data for restaurant operators back in 2017.
As I mentioned, the trigger point was the pandemic, where our phones started blowing up, and people were saying, “Look, I never see my guests anymore. I need to know who they are.” You've been talking about data for a couple of years now. Help me figure this out. I think if you fast forward a little bit more recently, again, the biggest unlock in terms of how we help restaurants use that data has been this idea of course, I got my digital customers and I got a CRM and I got an email marketing database, but that's like 10% to 20% of my business.
What I need is insight into the other 80% of my guests who I necessarily communicate with, but are the bulk of my business. We started providing data tools, analytics, for lack of a better term, and understanding that when a restaurant launches a menu item, does it bring in new guests? Does it increase the average check? Does it increase the frequency of your existing guests? Does it cannibalize something else on the menu? Restaurant operators have all these questions and imperfect ways to answer them.
Most restaurants, unfortunately, just by being in the business of hospitality, don't really know anything about the person behind the transaction.
You either look at the 10% to 20% of guests who are in your loyalty program and look at their behavior, which is such a small part of the business, or you look at top line sales and you say, “Sales went up when I launched this menu item, I guess it's working.” We were just like, “That's just not a good enough answer.” That's not telling you the depth at which it's working or the extent to which it's working. How do we just go that one level deeper and get you all of the customer data and start answering some of these impactful questions and these decisions that you're making to grow the business?
Menu Analytics: Unlocking The Power of Customer Choice
It's perfect. I think what you guys do is going to be so prevalent sooner rather than later. It's so important. I love the list of questions. I think it's towards the bottom of your homepage - It's things like... What items have higher churn rates? How do I drive a higher frequency? How much are the loyal guests worth? You want to know the answer to those questions. The only way you can do it is with technology. You cannot guess, and you cannot have a scratch piece of paper somewhere that has that information. I want to ask you a question because I happen to be rereading this book, and this is an old book. Hug Your Customer. Do you know this book?
I don't actually.
Read this book. You'll find it fascinating. Let me find the copyright. It's at least 10, 15, or 20 years old. It is based on a clothing company in Connecticut. They sell suits and ties and shoes and so forth, but they digitized way back in like 1970, in the ‘70s and ‘80s. They found real early on that having those answers about their customers, what they buy...how often do they buy...what else do they need is so critical.
I'm rereading it now. I'm like, “Holy crap.” Yes, it's talking about clothing, but all these same questions, still years and years later, relate to restaurants, and they're not doing these things. I pull up your webpage, and you guys are answering those questions. I'm glad that technology is getting there. What are you seeing in the marketplace? What's catching most?
Some of the menu stuff that I talked about is probably the thing we see the most excitement about, and this is me, my naive perspective. If you think about it, the food is the product for a restaurant. As consumers, we will forgive a lot of sins. “The experience wasn't as great. The hospitality wasn't as great. It took too long to get my order. The restaurant was understaffed.” There are a lot of things that contribute to a mediocre or bad experience.
As consumers, we can forgive them if the food is great. The food not being great is the one thing that we will say like, “We're not going back. It wasn't worth it to me.” The thing that we see the most excitement about from a restaurant standpoint is having this level of insight into the things that you were just talking about, which is, “I have these like core staple menu items. I can look at how much they're selling and I look at the volume of sales, but which of them are driving real customer loyalty and frequency?”
The thing that we always find is that there's always something in the top ten, and it's like the number 6 number 7 seller that it has a better retention rate for a new guest than the top 1 or 2 sellers. Retention is the ultimate metric for success in this business because we have over 350 million customer records in our system, and something that we found across the board on average is that 80% of guests never come back after the first visit.
The 20% that do come back can be up to 70% of a brand's revenue. It depends on the concept, but like we can see small cohorts of guests driving just an outsize impact for a brand. What we say is that the most important thing is getting someone from their first visit to their second visit, because the probability that they keep coming back after that just keeps going up and up. What we say is like strategically position your menu to work for you to drive that second visit.
If it's someone's first time there, your team should be saying, “Try X.” Now, X doesn't have to be the best seller, but X should be the thing that, again, increases the probability that someone comes back for a second visit. Those are the kinds of insights where it's not necessarily like a novel or game-changing insight, but it is something that restaurants are not doing today and can increasingly be doing to make to build more loyal, stickier guests.
Retention is the ultimate metric for success in this business.
The Real Value Of A Diner: Unveiling Customer Lifetime Value
Those numbers are fascinating. As you said, I started to think about my own behavior. There are a lot of places I go to only once. I went there, I wanted to check it out. I was maybe hoping that I could become a regular, and it just didn't meet the criteria for whatever reason, food service, quality ambiance, pricing, etc. What did they do to get me to come back? A lot of times, the answer is nothing. They didn't do anything, didn't capture data in the beginning part, and didn't do any marketing. That's fascinating.
Another stat that I loved, highlighted on your site a few times, I want to get the average visits, but the lifetime value. The lifetime value of that customer. I want you to talk about it in a second, but I'll rant for two seconds and say to our restaurant operators that if your employee gives bad service to Sally, thinking, “That was just a $7 sandwich. It doesn't matter, boss.” Sally might be worth thousands of dollars for you over time. It's not that $7 sandwich. I think a lot of that doesn't get communicated to the staff. These customers are worth a lot over time. How do you guys think about it?
It's one of those things where, and I say this to folks all the time, of course, data is excellent and it tells you what's working, what's not working, but the core principles of this business, like, haven't really changed. Even though there are more ways to order and it's going increasingly digital, you've got to make great food. It's got to be with a decent enough experience, and it's got to be priced appropriately.
I feel like those are the three necessary, and maybe location, because over 80% of the business still happens offline. Those are the three things that I think are 3 to 4 things that I think about as non-negotiables and giving a restaurant the best shot at driving repeat visits and increasing customer lifetime value. That being said, something that we've seen, like with some of our brands, is that the lifetime value of a guest can be 10X, and the lifetime value of a loyal guest can be 10X. What is it for a first-time guest?
If you have somebody who your average check is $18, they only visit once, the lifetime value of that guest is $18. What we typically see is like you got to get someone to 3 or 4 visits within 60 to 90 days, 60 to 75 days. That's what gets someone to be truly engaged and come at a regular interval. Now, regular doesn't have to be monthly. It doesn't have to be weekly. It could be quarterly, but the lifetime value of that guest, once you get them to that third to fourth visit within 60 to 75 days, it skyrockets dramatically.
Most brands, on average, only have about 10% to 15% of their guests that are habitual, meaning they have that level of frequency. To give you a sense of what's possible, one of the best brands that we work with, their level of habitual guests, of guests who come regularly, is above 40%. If you look at their performance last year, and of course, comps, same-store sales are something that is always in the news with this business. They had a 22% over-year increase in transactions from repeat guests.
That more than offset the 5% decline that they saw in transactions from new guests. Of course, their business was up because more than 40% of their business comes from repeat guests. You can basically start tweaking the business, start understanding A, how do I get someone from 1 visit to 2 visits? B, how do I get them from 2 visits to 4 visits? C, how do I shorten the timeframe in which all of that is possible?
You can start to see these types of increases in lifetime value, which I wouldn't say folks on lifetime value for lifetime value's sake, but the thing that lifetime value ladders up into is the thing that most restaurant operators care about, which is our transactions going up and our sales going up. That's like the ladder or the process that I think about in terms of why this matters. Of course, there are a bunch of ways in which you can influence that.
80% of guests never come back after the first visit. The 20% that do come back can be up to 70% of a brand's revenue.
Maybe we'll talk about some of those ways to get folks back in and influence behaviors and stuff. I want to talk about guest profiles. You have that on your site, and I like it. I'll go back to this book again for a second. When these guys talk about it, they talk about knowing everything about it. They know the shoe size, their family, their nickname, that they like to be called Miss, Mrs., etc.
Restaurants are maybe not going to go that granular, but if you went to a restaurant today and said, “Who are your top 25 customers? Tell me about them.” The answer is going to be it's not going to be there, right? I don't know in most cases. A lot of times it's not going to be. It's going to be generic. “They are some subset.” You guys will be able to have Jane did this, spent that. Email, phone number credit card. Like that's great.
Personalized Restaurant Marketing: From Generic To Granular
That's the thing. I always call that the atomic unit. That single guest profile is the foundation of all the analytics that we layer up on top of it, or the marketing campaigns that we enable at the end of the day. I'll give you one example. We work with a fifteen-unit smoothie rap, old juice brand based in Chicago. They were sending a generic after 30 days, “I miss you. Here's a promo to come back.”
The conversion rate on that campaign was 5%. 5 out of 100 people would use the offer. Not bad, actually. When they started using our platform, they started splitting that offer and saying, “I'm going to send a promo for smoothies to people who love smoothies. I'm going to send a promo for rap or a bowl for people who love wraps and bowls.”
That one change alone, that one little bit of personalization basically increased conversion rates from 5% to 15%. They had a 10% point increase. Think about that. This is a campaign that is being triggered every single day. The data comes in, we push it to their marketing platform, and it fires out the campaign. It's ten extra people every single day converting and having so. Think about it like if your business with ten orders a day on that one promo, is an extra 300 orders a month, based on if you're open all 30 days of the month.
These small shifts in personalization can have an outsize impact. Again, this is just a way of framing, like how just having the data and small ways of using the data can have pretty dramatic effects on driving incremental traffic driving repeat visits. Again, I'll keep harping on this, driving more
sales and making the registering because as technology operators, that's the thing we're been we're benchmarked on “Are you helping me make more money as a brand?”
I've been a proponent of let's just stick with email for a second. I've been a proponent of email marketing for 25 years. It's great. If you went back 25 years ago, it was definitely 100% the same message went to everybody. That's just how it was. I would say that I'll just make up a number because this is just me guessing, but 90% of restaurants still probably have that approach. It's one email that goes to everybody. Don't take that stat and publish it. That is just me making up a number that I feel is relatively true.
I'm starting to see more personalization hit me, “Jaime, you probably like this.” I can tell I'm getting a different message based on my past history. I like that. I know it's good. We know that's a good thing for me to get a message specific to me. The case study that you rolled through is perfect. You went from 5% to 15%, and while that's 10% increase, it's also triple. That's triple! You're tripling that, and that is a dramatic number. Talk about whether you want to call it AI or just tech behind the scenes, it's happening automatically. That part of it, like hit on that a little bit more.
Again, like we see ourselves as the source of truth for who your guests are and what they're doing. There doesn't necessarily need to be any fancy bells and whistles behind the scenes. Of course, I don't want to downplay our engineering team, but there's a lot of work of cleaning the data structure and standardizing data, etc. The operator never needs to see that, nor should the operator ever need to care about that. They just need to know that Bikky is doing it, and it works for me.
Small shifts and personalization can have really outsized impact.
The beauty of being able to match all this data across all these different sources, the credit card, the email address, the phone number is whenever someone builds those triggers for a segment in the platform, if a guest hits those triggers, we will automatically push it into that segment and then send it to the marketing provider to fire out the campaign. That is very much like you should be able to automate big parts of your guest's life cycle. New guests, lapsed guests, and that way it leaves room for things that restaurant operators are really great at, which is collecting their creative muscles to do surprise and delight campaigns and truly get closer to their guests.
The way I think about it is like, how do we basically strip away all of the process work using our platform and automate the highest leverage touch points so that operators can focus on, again, surprise and delight. Now, the thing that you mentioned, which was AI, it can be an overused buzzword. I personally think that as a data company, AI is part and parcel of what we do and where we should be pushing the industry, not for AI's sake but because we can start to push insights to the operator about what's happening inside their business.
Again, I think about my mother-in-law and, like typically, we work with brands with ten locations and up, but I've seen this at one unit, and I've seen it with our largest client, who's a thousand units. There are not enough hours in the day to do all the things that they want to do. The way I think about it is if we're sitting on all their data and we're tracking their business, what are the insights that we can start to push to them to actually pay attention about so that they can take advantage of those opportunities?
Again, focus on the highest leverage things to drive their business forward. I think that is just at a high level. That's one of the things that we're working on this year is getting better at just, “Pay attention to this.” “Revenue was down here. Here's why.” “It turns out that this menu item has above above-average churn rate. I know you just launched it. It's not really working.” Those are types of insights that we want to start to automate. Again, people can just continuously make the right decisions and operate the business to the best of their ability.
Seamless Tech Integration: Solution For Restaurants
I like that. It's like a red flag. Pay attention to this question for you about technology. Someone reading would go, “I already have this and that and this and that.” What does it look like to integrate what you do into someone's existing operation?
It depends on the tech stack, like we've gotten really good at it, where if you have a modern cloud-based POS and you're using their online ordering or using a big online ordering provider like Olo or it takes 1 to 2 weeks to get things up and running. I would say, like we have a few brands here that are 50 units, they're on Toast for POS or Square for POS. It's like point and click, and the data comes in.
As I said, within two weeks, like they have insights on, it's not just from the time you integrate forward, but we get all the historical data as well. We're going back 2 or 3 years, and you're getting insight on decisions you made last year, like you're thinking about relaunching this burrito LTO. It turns out you launched it last year. How did it actually do last year? It doesn't just because sales went up, doesn't mean it's necessarily the right thing to launch every single year.
Again, a couple of weeks up and running on the outside for people with maybe a legacy point of sale that's not in the cloud or an older system, it can take a couple of months. I still think that a couple of months, probably pretty good, because most brands when they think about POS robots, are integrating something there. We generally hear was like, “I thought I was going to take like twice as much time.” As I said, this is our bread and butter and something we live and breathe every day. We've gotten pretty good at doing it in a reasonable amount of time.
Again, you'll take a time machine, go back 10 or 15 years in time. The stuff you're talking about would take years to pull all the pieces together, and it would cost zillions of dollars. That's just not the case, which is great.
For us, restaurants should not have to build their own data stacks. Again, you should be in the business of making food, serving food, and marketing food. That is the superpower of the operator. That is the thing that they are great at. The technology behind it, how do I get the data? How do I build the dashboards? We're trying to abstract away all of that because we want you to understand how good you are at those three things, making, serving, and marketing food. We want you to make better decisions. You can keep getting even better at those three things. That's really the mandate from our side.
Restaurant should not have to build their own data stacks. You should be in the business of making food, serving food, and marketing food.
We covered a lot. I want to ask you some personal stuff, and we'll close with some more business stuff. What's a book that you recommend, or something you're reading now? What do you think?
I only read fiction. Usually, I feel like my life is real enough. I typically stick with fiction because it also activates part of my brain that I don't get to use as much in my daily life. I would say one of my favorite books, definitely my top three, is called The Dispossessed by Ursula K. Le Guin. It's a science fiction novel. I think it gives something that I grew up as a child of immigrants, and I came to this country when I was three years old, and in the late ‘80s.
When you come here, especially with immigrant parents, they have a big vision for your life and for your future. It can often be very prescriptive. You're going to do this. You're going to go to school. You're going to become a doctor. You're going to do this. You're going to be a school. You're going to become a lawyer. That's the fault of their own. That's like that's the reason they moved to this country in the first place was to afford me that opportunity.
I read this book in high school and it shattered my thinking a little bit on like life is long and there are many ways to do right by your family and do your and do your duty by your family and make your family proud while also doing the things that you love and doing the things that you believe in and are passionate about. It was a great way for me to square the ambitions and expectations of my family while also granting me that little bit. I would say the beginning of my journey and personal freedom of just understanding, like I can square these two things together.
It doesn't have to be prescribed. It doesn't have to be dictated to me. I can figure out how to do this while also satisfying my own ambitions and my own vision for who I want to be as a person. I think that was just a really great lesson to learn at that time because I try to bring that into how I am as a husband, how I am as a dad, how I am as a brother, how I am as a friend. I'd say that one book, when I read it when I was sixteen, unlocked a lot.
Sounds like it hit you hit you at the right time, is what it sounds like. Let's stick there other life wisdom. Any quotes that you love that you go to - any thoughts or sayings or mantras that you use in meetings? Anything stand out?
I'll tell you, I don't necessarily know if it's like one of my favorites, but I'll tell you something I said to my nine-year-old son over the weekend, which was, “Everyone has a plan until they get punched in the face.” I think the point is that planning is necessary. When I think about my most successful or I would say like happiest moments, it's like I did spend a little bit of time just sitting and thinking and planning them out.
Even if things didn't go according to plan, like I thought about the opportunity enough, where I was like, “If things don't go according to plan, how do I react in that situation?” This is like five minutes of thinking about a situation. Like this show, I sat down, I thought about it. What are the questions going to be? How do I want to approach this? How do I want to answer it? This one has gone according to plan more or less from my perspective, I would say. That's credit to you as an interviewer.
What I was saying to my son is like, “Look, you can plan and plan. Eventually, you just got to spend a little bit of time planning, and spend some time doing. If things don't go according to that plan, there's no need to panic. Again, you have to have that little bit of creative and personal freedom to adjust in the moment and still get to the place that you want to be.” I would say that's that's something I shared with him, just because that's the first quote that came to mind, rather because something I shared with him just a couple of days ago.
It's a good age, nine there. They can learn a lot. There could be sports or school. “I always get A's.” You just got C or D, “What the heck? I swear to God, life's going to go on. You're going to have another opportunity.” Things of that nature. Sometimes you get you have plans, but you get punched in the nose. Thankfully, not often by Mike Tyson.
That one, I don't know if I would have a plan to come back for all of this.
The better an operator can understand and run their business, the better they can understand the guests and tailor the experience of a guest.
That could ruin the day. One more thing. You're seeing trends. Where do you think the restaurant industry could be in 2 years, 3 years, 5 years down the road? What's changing?
Future Of Dining: Data-Driven & Resilient Restaurant Businesses
I will anchor on I'm a little bit biased because I dedicate my life to it, but this idea of data. I don't mean that in a more data is great type of sense. I think the thing that I am most excited about is that this industry is still largely operating with very little insight into who the guest is. Not just my business, but there are a lot of companies out there increasingly talking about the value of data and what to do with that data, and how to make it easy for operators to use that data. I think that is a wonderful thing for this industry because it just means that it's going to get better.
The better that an operator can understand and run their business, the better they can understand the guests and tailor the experience of a guest. The more that us as consumers will benefit because we will get menu items that we love and want to try. We will get experiences that are memorable. Of course, the operators benefit from that as well. It is a virtuous cycle, I would say.
That's the thing that I'm most intrigued and excited about is just who operators are getting tools that help them run their businesses better, because 25 years ago, restaurants used to be 20% margin businesses, and now they're 5% margin businesses. If you look at the brands that have had the resources and the access and the tools to leverage their data and build their businesses, the top 5 to 10 brands, Taco Bell, McDonald's, etc., they're still doing 20% plus level margins.
The thing that gets me out of bed every day and what gets me excited is how do we bring those same tools to the rest of the industry so that they can all build more resilient businesses, so that they can be more embedded in their communities and so that they can create more memorable experiences for the guests.
Good stuff. It's funny when you were talking the last one of the points you hit, I was thinking of the same time. It's a business now. You used to see folks, “Let me just start a restaurant. That'd be fun. Grandma's got a great recipe.” You really can't do that anymore. It's just a vicious business with the costs, and I'm not telling people anything they don't know, the labor, the food, etc. You have to run a business, and data and technology is a big piece of making that successful. Let's wrap with sending them to websites, socials, anything else you want to or parting thoughts?
For us, you can reach me at Abhinav@Bikky.com. Find us on LinkedIn at Bikky. That's where we're most active. Check out our website, Bikky.com. I think the only thing I would want to leave everybody with here is, I think the biggest thing that I've learned in starting this business is how incredible the restaurant community is. I go to a lot of trade shows and a lot of industry conferences.
I literally have eight conferences between now and the end of June that I'm going to. Travel and time away from my family, my kids, etc., is always tough. I think what offsets it a little bit is how generous and gracious people are with their time, with their feedback, with their advice. I think that is just such a strong testament. As you said, it is a business, but the people who are running those businesses are just wonderful human beings. I think that's the beauty and that's the magic of all this.
Good stuff, man. Well said there. Thanks Abhinav. Appreciate you joining me, folks. Abhinav Kapur of Bikky. You can find them on the web at Bikky.com. For more great restaurant marketing, service people, and tech news stay tuned to us here at RunningRestaurants.com. In the meantime, do a favor, like the episode, share, and review it wherever you're watching or listening. That stuff is really helpful, and we do appreciate that. We'll see you next time. Thanks, Abhinav.
Thank you. Take care.
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