Darden Restaurants, which includes the brands Olive Garden, Red Lobster, and Yard House, has committed $200 million toward improving the way it connects with and attracts customers; through customer relationship management systems and new web technology, it intends to stay on top of market trends and continue its growth as an organization (Boulton, 2012). Darden’s eagerness to embrace technology will likely enable them to adapt to an uncertain economy and evolving customer desires, strengthening their position in a competitive market.
Customer Relationship Management Systems
Customer Relationship Management (CRM) collects and analyzes data that can provide the information to develop a holistic approach at maximizing the value of each customer relationship through loyalty programs, product cross selling, and up selling (Turban, Volonino, Sipior, & Wood, 2011). An important goal with CRM is to acquire and maintain customers by building and nurturing long-term relationships (Ahuja & Medury, 2010). A multichannel approach to CRM allows an organization to build databases of customer information and analyze that data to increase customer knowledge and improve the organization’s quality of service (Turban, Volonino, Sipior, & Wood, 2011). Continually implementing new methods of collecting data will provide the opportunity for strong customer loyalty and brand recognition while also providing a better picture of the market as a whole.
Darden Restaurants and CRM
Darden Restaurants is focused on collecting customer data from the web and other electronic means to “better understand…specific guest behaviors,” which will enable them to customize their approach for individual customers (Boulton, 2012). As sales at their three largest brands have decreased, Darden understands they must appeal to a broad economic base, leading them to focus on expanding specialty brands while treating their more recognized brands as high-volume loss leaders (Dostal, 2013). Market information shows that two of these three brands, Olive Garden and Red Lobster, tend to cater to an older crowd; Darden can broaden that customer base by connecting “younger customers…[who] have a higher propensity to dine out” through newer channels, like social media (Ruggless, 2013). Darden is even considering ways to implement gaming platforms where users can earn coupons and discounts (Boulton, 2012).
Data Mining
To help build brand loyalty with its current customer base, Darden intends to implement data mining that will allow them to tailor the restaurant experience to their customers by adapting their menus to guest’s desires and customizing coupons and specials for specific guests (Boulton, 2012). The ultimate results of data mining are decisions that enable an organization to stay competitive and alert to market changes and guest’s desires, and the more data that can be collected from more channels will lead to a clearer picture of how their restaurants can improve each guest’s experience.
Social Media
CRM requires as much engagement of the customer as possible; the use of social media to communicate to people as a brand enables customers to interact and develop a relationship while increasing that customer’s value to the organization (Ahuja & Medury, 2010). Each Darden concept has their own Facebook page, keeping guests updated on news, promotions, and specials. These pages not only afford Darden the opportunity to reach out and connect to current customers, but to get the attention of prospective customers as well as curious web browsers. Customers that interact with particular brands through social media “begin to perceive the value related to the brand” (Ahuja & Medury, 2010).
Conclusion
Applying a holistic approach to Customer Relationship Management that includes the use of technology will strengthen an organization’s competitive edge in their market while also building relationships with both current and potential customers. Through the collecting of customer information and mining of data, an organization can tailor their business model to meet the needs of an ever-evolving market and customer desires. Darden Restaurants has made technology and information systems a cornerstone of its growth and has, thus far, experienced success in doing so.
References
Ahuja, V., & Medury, Y. (2010). Corporate blogs as e-CRM tools – Building consumer engagement through content management. Database Marketing & Customer Strategy Management, 17(2), 91-105.
Boulton, C. (2012, October 13). Red Lobster Learns How to Fish. Retrieved from http://mobile.blogs.wsj.com/cio/2012/10/13/red-lobster-learns-how-to-fish-2/
Dostal, E. (2013, March 22). Same-store sales at Olive Garden, Red Lobster, and LongHorn decline as forecasted. Retrieved from http://nrn.com/latest-headlines/darden-specialty-group-outperforms-flagship-brands-3q
Ruggless, R. (2013, March 9). Darden begins multimillion-dollar tech overhaul. Retrieved from http://nrn.com/archive/darden-begins-multimillion-dollar-tech-overhaul
Turban, E., Volonino, L., Sipior, J., & Wood, G. (2011). Information Technology and Management (8th ed.). Hoboken, NJ: John Wiley & Sons, Inc..
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