The Challenge
A quick-service restaurant chain was seeing declining transactions and needed to understand why. The timing was complicated: the decline coincided with both macroeconomic pressures (inflation, cost-of-living concerns) and changes to their loyalty program. Leadership needed to know which factor was driving the drop — the answer would determine whether to adjust pricing strategy or revisit the loyalty program changes.
The Approach
I built competing models to isolate the effects:
- Model 1 — Loyalty indicators: Included variables capturing the loyalty program changes and customer engagement metrics
- Model 2 — Macroeconomic indicators: Used CPI, unemployment rates, and other economic signals
By comparing model performance and coefficient significance, I could assess the relative contribution of each factor to the transaction decline.
Additionally, I supported: - Price optimization: Similar to other hospitality engagements - Site re-banding: Clustering locations for appropriate pricing tiers
The Outcome
The analysis provided clarity on the drivers of transaction decline, allowing the business to make informed decisions about both pricing and loyalty program strategy.
Key Insight
When multiple things change at once, you can’t just look at the trend and pick your favorite explanation. Structured model comparison helps separate signal from narrative.