Success in today’s competitive quick-service market requires companies to open more restaurants, faster and in the optimal locations. That’s all while trying to minimize sales cannibalization between restaurants and constantly evaluating which restaurants to close and which to renovate. For a franchise system to grow and improve its business, it needs to have control of the complicated relationship between sales performance and customers. By utilizing demographic data, together with research and modeling, quick-serves can develop a sound strategy for smart growth.
Understanding Your Customers
How well do you know your customers? The answer can be confusing because knowing the customers usually means different things to different departments—even within the same organization.
One of the best ways to know customers is to understand their preferences and purchasing behaviors. There are a variety of consumer research methods, both quantitative and qualitative, that offer answers and feedback from customers regarding likes and dislikes, purchasing patterns, satisfaction with merchandising, pricing, service issues, and competitive patronage. Quick-serves that learn the details of their entire customer base can make more informed decisions rather than relying simply on gut feelings.
As a first step toward franchising, chains can work with an analytics team to conduct primary and secondary research to develop the restaurant’s customer profile. This research helped capture a clear picture of the target customer.
Using Demographics, Research, and Modeling as Tools
The use of demographic (census data), psychographic, competitive and shopping center data, together with a brand’s own sales and site-related data enable operators to better understand the dynamics affecting unit-sales performance. In general, quick-serves have fairly-compact trade areas that are largely based on convenience. While residential-based sales typically provide the majority of profits for these units, the contribution of other sales (worker, shopping, and other generators) should not be overlooked.
Demographics and Research
By utilizing demographic information, along with sales data, brands can make more strategic decisions regarding real estate, operational, marketing, and merchandising questions. Areas to consider include:
Site modeling enables organizations to synthesize reality and determine the success of a certain location. The best models have a strong predictive capability, while being grounded in intuitive statistical relationships. By bringing together sales, demographics, psychographics, competition, and site characteristics, a quick-serve can use these predictive capabilities in a modeling environment.
In the end, the benefits of using site-selection tools (demographics, research, and models) are immense. From smaller companies that have a single unit to those that have thousands, all can benefit from the use of demographics and site-selection research. Poor real estate decisions can be lessened with an upfront investment in site or market knowledge. Avoiding bad real estate decisions only strengthens the long-term profitability of a company.
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