Is This the Best Kept Secret in Restaurant Marketing? (Ep 187)

publication date: Mar 9, 2023
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author/source: Jaime Oikle with Dave Fink
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this-the-best-kept-secret-restaurant-marketing

 

In this episode,  Jaime Oikle of RunningRestaurants.com speaks with Dave Fink, the Founder and CEO of Postie. After the conversation with Dave, it's clear that direct mail is no longer what it used to be. A quote on the Postie website says, "Shhh... Direct mail is the best kept secret in marketing." This intriguing reversal of modern digital marketing thinking leads Dave and Jaime to discuss:

 

Be sure to check out the episode. Find out more at Postie and Running Restaurants.

Thanks to episode sponsor Zinch.

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Is This the Best Kept Secret in Restaurant Marketing?

 

We've got a great episode for you with Dave Fink, CEO and Cofounder at Postie. Welcome, Dave, let's start with what you guys do and then we'll dig in from there, what you got?

Overview Of Posty: Direct Mail Marketing

The way we like to think about things in the broadest way is we help businesses take control of their growth and more effectively source customers and build value from the customers they've worked hard to acquire. We do that solely by focusing on how to leverage the direct mail marketing channel. Actual physical mail through the US Postal Service and reaching people in their households through their mailboxes.

The reason that this is what we've been dedicating our focus on the last six years has been because we grew up in the digital era and an age of internet marketing and the ability to build direct relationships with prospects and customers and understand how to target those customers and capture insights from that direct relationship. There are a lot of amazing things. We all rode the coattails of Facebook, YouTube, and Google. Fast forward like anything, it became the 10,000-pound gorillas controlling the ad ecosystem. It became expensive, very competitive, and hard to solely rely on digital for your growth.

When it became time to think about how we apply almost two and a half years or two and a half decades of quantitative, predictable, and controlled growth strategies in the digital world. How we go beyond that to diversify our marketing stack again, but not give up on all those amazing things like targeting and use of data and measurement, insights, and testing optimization.

We fell back into direct mail, which allows for all of those components and attributes. There just wasn't a technology layer. Postie brings that technology layer to get the direct mail channel to behave like our favorite digital channels, making it possible to apply what we've worked hard on over the last couple of decades to our omnichannel marketing.

Postie brings the technology layer to get the direct channels to behave like our favorite digital channels.

There was a quote that I guess will go right there because you're feeding right into it on your site, which I liked that I would want to bring up. It pretty much says that direct mail is the best-kept secret in marketing. I thought that was funny because obviously, it has moved away from being a primary method. Whereas, if we were to reset 20 years ago, it was definitely. I echo that because I thought for a second when I read this, when was the last time I got a postcard from a restaurant in the mail, which is what we talked about? Tell me what you think.

I think you're spot on. When I think back to 1999 or 2000 when I made my foray into my first tech job, which was at a marketing technology company, many of the smartest executives in that company and just in the industry on the buy side and the sell side came from direct mail or direct response. It was the original channel that could leverage data for prediction, you could measure, and there were very smart quantitative marketers doing A testing on creative and offers and segmentation.

It was just an analog execution process. See a vendor's many employees necessary to do everything from sourcing paper and print to procuring data and building models and then running measurement off of spreadsheets and all the campaign management off of PowerPoint and a bit of like white scratch paper, and the internet came along and showed us that.

Technology could accelerate the sophistication and the ability to test and learn. There were ad servers like DoubleClick and Atlas that came on the scene. That gave way to programmatic like the trade desk, DB 360, and data zoo. Just the acceleration of capabilities and the results that you could capture, leveraging technology and all these direct response tactics that originally started in direct mail.

It motivated us as marketers to go deeper into digital. We were okay with moving away from some of these more analog traditional channels because the efficiency wasn't there. It was hard. It was not as tech-enabled, we didn't have the same level of insights and speed to optimize and predict. When you look at all of those capabilities, they do fall into three different buckets in how digital and programmatic and search and social have armed us with becoming better marketers.

It’s the targeting automated execution and its clean measurement. When you put those three things together, there aren't that many offline channels that you can apply all three of them to, but direct mail is one of them. For us, it was a question of, whether it's not possible to keep scaling Facebook, and do it profitably or socially profitably.

Its search is as competitive as anything. We can do a great job at a certain scale level, but eventually, you hit a ceiling. When we looked offline and back to direct mail, it was this little secret. Twenty years down the road, most people had never, marketers who were in positions of power and authority had never played with direct mail.

It just had been many years since it was a dominant channel, but when you look at the size and scale of the channel, even though it may be used by fewer advertisers at scale right now, it’s still a $50 billion-a-year space sector here in the US alone. It is incredibly powerful. It never went away. It just became that companies that were built in a digital era did not think to go to direct mail first and didn't have that skill set.

The idea of it being a hidden little secret is true for me. It is all about being able to engage your addressable audiences with the right message at the right time and the right frequency. All of a sudden now, with some innovation in the tools to make it execute more similarly to how you set in front of an email server or an ad server, a programmatic platform, brings it back to life.

Engage your addressable audiences with the right message at the right time and the right frequency.

Targeting And Use Cases For Direct Mail

I was writing down some notes there. I want to talk about targeting for a second and then I want to go to a use case for a restaurant. You can walk through an example of how it could work, whether it's a local Indie or it could be a small franchise, whatever you want to go to. You can do them separately. You can attack either one if you want. I was thinking of targeting and use case, take it where you want.

When you think about targeting, there are two core components to it. One is, how do you know who you want to target? We're in an age where there's more knowledge at the advertiser brand level on an insight center about who your best customers are than ever before. There are CRMs, CDPs, POSs, and every acronym you can think about that's helping you capture data.

That's liquid gold. Back in the pre-digital age, if you had a good hostess, or a good host, or a good set of servers, you had them engaging with your customers and building rapport and asking questions and understanding them anecdotally. All that data is available by using some technology that most companies are getting savvy about.

When you start with having all this data and understanding who your customers are, and who your prospects are, that gives you a tremendous amount of advantage. Then it becomes a question of, what are the marketing strategies and channels that you can leverage to find more customers or prospects that look like your best customers? What are the channels that can help you reactivate your CRM and your existing customers who may not be thinking about you and your brand as frequently as you wish they would? That takes addressability.

On the targeting side, it is a matter of saying, let's capture all these insights, make sure that we can capture as much data as possible and understand who our customers are, understand their behaviors, and then let's bring that data and activate that, whether it's building lookalikes on Facebook or building lookalikes in direct mail.

Whether that's running remarketing campaigns through your email or a digital retargeting company or whether that's running the same strategies through direct mail, whether that's reactivating and staying in touch with your customer base through email and SMS or an app, or doing so through their mailbox and speaking to them through direct mail. All those use cases are available in addressable channels and we're used to them in digital.

That's where we spent most of our time, but let's not forget that there are other channels out there that can leverage the insights we're capturing on our first-party data or knowledge on our customers and activate those through media channels.

Do me a favor and just define lookalike audiences a little bit more. Folks have either heard it, are very familiar with it, or not familiar with that term. How do you describe it?

It's one of those rare marketing terms. We like to complicate things and create amazing names and terms and acronyms and sound very smart, but lookalikes are just that. It's the idea of taking a segment of your customer base that you've identified as high value. It could be high average order value customers or it could be high frequent diners, it can be customers that have engaged in a loyalty or VIP program.

You're identifying and putting some boundaries around that portion of your CRM and saying, these are valuable customers. How do I go out and market to more people who look just like these customers, hence lookalikes? The digital platforms, but Postie as well for direct mail, allow you to take those audiences, and integrate them with an ads platform. That ads platform has all sorts of data and insights on the general US population and can find similarities between that CRM segment that you've identified as your best customer and those individuals in the US that look most similar to those customers.

Now you have an audience that you feel confident, doesn't necessarily mean that they will convert, but it does mean that it's probably worth spending time and marketing budget trying to engage these individuals because when you do get them to convert, they should behave, the data suggests they'll behave more similarly to the customers that you're using as a training model, training set for that target.

Strategies For Reactivating Customers

The other word that I want to come back to, and I do want to go back to examples in a second, but reactivate. To me, a restaurant, that's a very powerful thing. The customer's been in, “I feel like they've been here once or twice a month for so long, but haven't seen them.” Reactivating someone to come back is a big deal and a big opportunity.

Reactivating customers who haven’t visited in a while is a big opportunity. Engage them with a postcard offer in their mailbox.

I think about that quite a bit. How do you guys do it for, in this case, restaurants? Is it a date? You can get in as many specifics as you want, but at the end of the day, you're finding out who they are, realizing they haven't been, reactivating through a postcard that's landing in their messages and their mailbox with an offer. Talk more about it.

Every business is slightly different, but there are a series of different marketing strategies that you can leverage to accomplish different goals. I think you need to look inside, introspectively first and say, who are our customers, what type of restaurant are we, why do diners choose to eat with us or why are they staying away?

Then are there different reasons, meaning that not every diner is there for the same reason, and you may be a restaurant that has a segment that comes because you have a specialty dish. You may be an ethnic restaurant and there's a segment that comes because it is the flavors of their home. They remind them of where they are, and their background.

You could be a place that's higher-end and caters to celebrations, birthdays, anniversaries, et cetera. Once you understand why your customers are engaging with you, that's an important and good place to start. Then you can start asking yourself questions like in each of these segments, what's an ideal frequency?

Maybe there's a segment of customers that you think should be coming back twice a month or weekly. It should just be more ritualistic. There might be a segment that it's a once-a-year or twice-a-year special experience for them. If you can gain insights into those different segments and start thinking about what are the data points that you have, and the knowledge points that you have to help those customers form habits, then you can start mapping that to specific use cases.

Segment your customers and map their habits to specific use cases for better marketing results.

We could be here for hours talking about lots of different use cases, but a couple of examples, I think in restaurants in particular, if you're somewhere where there's a segment of your audience or your customer base that it's about special occasions. If you're capturing, when they dine, what we call anniversary campaigns are powerful.

Every year, the month leading up to that last time they dined, that’s probably, a good guess that it was for a birthday or an anniversary or a holiday or some celebration. Why not remind them of that and help them start thinking about your restaurant's part of their ritual? If it's a customer segment that lives, within a mile and you're one of the most convenient locations for them, maybe that's a segment you need to think about, turning a ritual, those habits into a monthly dining habit or multiple times a month dining habit.

Once you understand what the game plan and what your goal is, then you can start thinking about whether you should be leveraging offers. Should you be using more content and informative newsletters but staying away from offers, introducing seasonal fare, or new menu items? Scarcity works well as well. When there's a seasonal option, the fact that it's available for a limited time can help motivate someone to activate, pick up the phone, make a reservation, or go on your website.

The tactics go on and on, but one thing I can tell you that we see from literally tens of thousands of reactivation campaigns is that if you're trying to reactivate someone or you're trying to change their behavior, get them to build a habit, and change the frequency with which they engage with you, you have to cut through the noise, and you have to fight to get some of their time.

Digital ads serve a place, high frequency, low cost. That's great, but with the flick of a thumb, you're past a newsfeed ad. It is rough out there on digital and mobile ads, but direct mail pieces are something that feel very personal. There's certainly less clutter out there at this point. It's a bit of a higher price point to reach each individual through mail, but the impact and the conversion rate greatly offset that cost, making it an ROI-positive channel. The number one factor is that a well-thought-out, well-designed, personalized experience, that reaches someone in their own home, that's hard to replace.

Direct Mail's Personal Touch And Longevity

As you were talking there, the one thing that hit my mind in our world is I have a high school senior and a high school sophomore. Colleges have not lost the idea of hitting you in the mailbox. It's been fascinating to get a lot of mail incoming for our two students. It is a lot more powerful because we know these colleges exist, but you need to go find them and wade through that sea.

It's the same thing with restaurants. We know you exist, but how do you remind me? When you send a beautiful brochure or postcard with a call to action and a headline and things like this, it does jar and I don't have anything sitting here other than a thing from my Subarus, a nice postcard. They do this. They cut through, they pause you. We find it interesting to go to the mailbox these days. For a long time, you hated it, but now, what is in my mailbox? You pay attention to it.

A couple of thoughts there. One, there's this idea of intent-based marketing, which Google's cornered the market. If I'm in the market for something, I'm going to end up on Google. I'll probably end up on Amazon. I'm going to do some searching. I'm going to look for product reviews. I'm going to look for content. I'll end up on YouTube if it's a passion category, a hobby of the day, and spend lots of time watching videos and reviewing videos and whatnot.

Most brands don't have the luxury of growing just from intent, waiting for someone to come and seek you out. You have to go and invest in demand gen. That's what those colleges are doing. They have a captivated audience for a very specific, probably six-month period with which they can acquire an application from that student.

If they're not out actively leveraging data, targeting the right households with the right prospective incoming students with differentiated content, speaking probably to different buckets of students. The student-athlete versus the prospect engineering student versus the prospect comp lit student.

Then they're going to have a smaller bucket of students to choose from that potentially dilutes the quality of the workforce that they're putting out, which in turn cyclically affects the type of students that are interested in that university. All businesses are no different. In a restaurant, if you work hard to have people show up on a Wednesday at 07:00 PM and the restaurant's half empty, that's bad.

Someone comes in and then immediately, at least I know with me, the first thing that I think is this restaurant probably isn't very good if it's half empty. That's constant pressure to generate demand. That's why you and I talked before we got on air, but, I spent a lot of time in LA and Hollywood's mastered the red velvet ropes.

When I was 22 years old and trying to figure out how to get into the fancy clubs, I had to go early. There'd be a line around the corner at this club and then you finally get in and it would be half empty because they just wanted that line out in front of the club to make it seem like they were the hot club. Maybe by midnight, it was packed.

It just puts a ton of pressure on us as marketers or business owners. I think the beauty of direct mail is there was a time when it was a less expensive channel and there was a whole bunch of probably non-targeted, non-quality designed ads that were coming at you, but those days are long over. Part of it's just, that the cost-effects shooting direct mail have gone up.

You would think that would be a deterrent, but if you take a step back, what that's doing is that A, that's forcing us as marketers to be more invested in the design, the targeting, the messaging, the segmentation, and the way we're talking uniquely a different consumer or prospect segments. Putting up quality content is always a winning strategy.

Doesn't mean every individual and every touch point is going to be perfect, but that investment is always a winning strategy, just like investing in the decor and the theme of your restaurant, and location is, returns its value so does an investment in the content. The other thing that I learned very early on when lunch, after lunch in Postie is that the unique value of a well-designed direct mail ad is that it lives in your home oftentimes for as many as six or eight weeks.

I saw this, it wasn't a restaurant. It was a meal delivery company. When I first started exploring this idea with my co-founder, I watched, my wife. She's a general consumer. She's not a marketer. I'm always suspicious and the way I interact with the average has been very different than the average consumer. I saw a postcard that she had saved from a meal delivery from a fully prepped meal company.

That postcard sat on our kitchen table for probably three weeks. What in the world is going on here? And then it ended up with a magnet on the refrigerator for a couple of weeks. Five weeks later, I got a text saying that there was going to be a delivery today. I tried this new meal delivery service. The meals need to go in the refrigerator. When they get there, please put them in the refrigerator if I get home before she does.

I just watched it. It was an expensive order. She probably spent like $500 on this initial month of meal deliveries. That direct mail ad probably got a thousand impressions every time we walked in, back and forth in the kitchen, how many fingerprints were on it from picking it up and saying, “Wait, what is this again?” That we don't get from a digital ad that we don't get from a search ad. We search, and we hit a search engine results page. Maybe we clicked around a link. Maybe we don't.

The Importance Of Quality Content In Direct Mail

Certainly, we might watch a YouTube video one time, we might see the same ad four or five times as we're scrolling through an Instagram ad or TikTok feed or whatnot. To have a media channel that actually can reach the right people and have a long shelf life that eventually results in a meaningful conversion means that we have a shot to not just drive that conversion. Chances are that customers are high-quality customers once they do convert because it's taken them some time and they've ruminated over that purchase decision.

That consideration factor. I don't save many digital ads that I come across on the internet. I don't hit save and put them somewhere and go relook at them later. Let's do this because there is a lot more to talk about. I want to bring you back a couple of months in the future and talk, I wrote down some stuff to follow up on, strategy stuff, design, and messaging. There's much more to talk about. I want to bring you back and do that. In the meantime, I want you to send folks to the website, to your social, where can they find out more about you guys, and what you got?

We work hard to publish great content on our website, lots of case studies, use cases, and information. That's Postie.com. It's honestly the best way to engage with us and see if you think that we might be worth engaging with and then if so, we make it easy to request a conversation with our team right there.

I think I saw a book there too. Is it a download? Is that something people can grab?

There are some ebooks. There's a restaurant vertical-specific eBook.

Send me the link. We can put it on the notes. We'll be sure to do that.

Absolutely. It's like these seven tactics that all restaurant marketers should consider. We put a lot of time and energy into our storytelling content research. Hopefully, we can help you expand the way you're thinking about, “Putting butts in seats,” as they say.

In the restaurants, that's what it's about, getting folks in and getting them back. I appreciate it, Dave. Good stuff. Folks, that was Dave Fink of Postie. You can find them on the web at Postie.com. For more great restaurant marketing and service and people and tech tips, stay tuned to us here at RunningRestaurants.com. We'll see you next time. Thanks, Dave.

Thanks for having me.

 

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