Michael Lukianoff, CEO of SignalFlare, joins this episode of Give an Ovation to talk about how restaurant leaders can use data and AI to stay competitive in a rapidly shifting landscape. With decades of experience in analytics and hospitality, Michael breaks down what the numbers are really saying, how local dynamics impact performance, and why smarter strategy starts with sharper insights. He offers practical advice on using micro-targeting, avoiding data traps, and adapting to structural changes in the market.

The Industry Isn’t Shrinking—It’s Changing (02:23)

Michael explains that while same-store sales may fluctuate, the restaurant industry overall is growing. The real challenge is increased competition, not a weaker consumer.

“The consumer isn’t as weak as people say—the big change is structural.”

Population Growth vs. Restaurant Growth (04:20)

He breaks down how restaurant openings are outpacing population increases, leading to a more competitive market for each location.

“Six years ago, you might have had five competitors. Now you have ten.”

Why Local Market Knowledge Matters (10:02)

Michael stresses that operators need to know their concept, their customer, and their local dynamics to succeed.

“If you don’t understand what’s happening outside your four walls, you’re at a disadvantage.”

The Power of Micro-Targeted Marketing (13:11)

He describes how AI and data can help restaurants focus marketing efforts on specific, high-opportunity neighborhoods.

“If you target those clusters, it’s much less expensive and much more effective.”

Act Local, Strategize Smart (14:41)

Michael warns that while AI makes localization easier, restaurants still need tight brand guardrails.

“If you just leave it to AI, it can start reframing your brand for you.”

Links:

https://www.linkedin.com/in/mikelukianoff/

https://www.linkedin.com/company/signalflareai/

Transcript

00:00:00:05 – 00:00:25:04

Zack Oates

Welcome to another edition of Give and Ovation, the Restaurant guest Experience podcast. I’m your host, Scott, and each week I chat with industry experts to uncover their strategy and tactics to help you create a five star guest experience. But stay tuned because this episode is going to be slightly different. This podcast, as always, is powered by ovation, the feedback and operations platform built for multi-unit restaurants.

00:00:25:06 – 00:00:43:23

Zack Oates

Get all the insights you need to improve without an annoying long survey for your guests. Learn more at Ovation up.com. And today I am excited. And this is a little bit of a different podcast because we have Mike Lukyanov here with us today. He is the CEO of Signal Flare, and he’s been all over the industry. He is a data guy.

00:00:44:04 – 00:01:06:04

Zack Oates

He’s been around for I mean decades and data and hospitality. And so Mike gave an incredible keynote at Mag, which is the conference right before NRA because NRA isn’t long enough. And after that, I was like, Mike, we got to get you on the podcast. And I’d love to just talk about where you think the industry is headed.

00:01:06:09 – 00:01:15:18

Zack Oates

And so first of all, thank you for joining us on the podcast. And second of all, tell us a little about Signal Flare to give some context to our conversation today.

00:01:15:20 – 00:01:39:22

Michael Lukianoff

Yeah. Well, first, thanks a lot for having me on. Excited to be here. And for our conversation as a signal flare as a decision intelligence company. So we specialize in price optimization, market optimization. And we’re taking really large data sets mobile phone data, credit card panel data, local economic data, all of the government data access, plus our customers point of sale data.

00:01:39:22 – 00:01:58:06

Michael Lukianoff

And we bring it all together and we build sophisticated models to understand what the right prices are, what the right marketing strategies are, what the right expansion strategies are, and so forth. And we’re doing it with AI agents, which in the background are pulling together the data and creating all the optimizations.

00:01:58:08 – 00:02:23:11

Zack Oates

And just to kind of give you some ideas, when you go to LinkedIn and I look you up, Mike and it says more profile similar to Mike, the CEO of snowflake is there. So just to kind of show you that Mike knows his data stuff. So based on what you’re seeing, Mike, should restaurants be excited or depressed about the future?

00:02:23:13 – 00:02:51:21

Michael Lukianoff

I think they should be strategic. I think that if you like a challenge, then, the future is for you. What we’re seeing in the data, you know, and I think what I talked about it, that Meg is maybe a slightly different point of view, where I think the industry measures itself on same store sales. And so it’s always, how do we do versus last year, and how do we take the same comparative set this year and compare it to the same group stores last year?

00:02:51:23 – 00:03:12:19

Michael Lukianoff

So we end up tracking these metrics that say, okay, well, we’re down this much or we’re up this much versus the same period in the prior year. But if you look at just aggregate growth, the industry is growing. You know, it has been really almost uninterrupted, a little bit of an interruption in 2020.

00:03:12:21 – 00:03:15:02

Zack Oates

Oh, why? What happened?

00:03:15:04 – 00:03:17:13

Michael Lukianoff

There was some, some of that. I think you slept through it.

00:03:17:15 – 00:03:18:21

Zack Oates

Okay. I must have missed it.

00:03:19:01 – 00:03:39:16

Michael Lukianoff

But. But even with that, there were a lot of closures. But then there were also a lot of opens. And I think that’s what shifted a lot of the dynamics and restaurant industry, because a lot of the Full-Service restaurants ended up closing. But if you had a drive thru, it was boom times. So lots of limited service restaurants got funded.

00:03:39:18 – 00:04:20:23

Michael Lukianoff

So what’s happening now is that restaurants are growing at a faster pace than population growth, and population growth is really starting to slow down. And that doesn’t even include potential effects of decreasing immigration and so forth. Right. Just our natural growth in population. So what we’re seeing right now is that if you were just to go back six years and compare the population that supports each restaurant, if you’re a limited service, you’re about six points lower than you are in terms of the number of customers per restaurant in the nation.

00:04:21:00 – 00:04:25:19

Zack Oates

So you’re saying ticket counts are down even though same store sales might be up?

00:04:25:21 – 00:04:38:11

Michael Lukianoff

Well, not ticket count. So total restaurant traffic in aggregate is growing, right? We went from like 800 billion to we’ll end this year at 1.5 trillion as an industry. Right.

00:04:38:11 – 00:04:44:13

Zack Oates

So but in terms of like the actual people walking into an individual location, right. If you look.

00:04:44:15 – 00:04:57:03

Michael Lukianoff

Into an individual location. Right. That’s where the issue happens. Because six years ago you might have only had five competitors around you. Now you might have six, seven, eight, nine, ten.

00:04:57:05 – 00:05:01:16

Zack Oates

And another five dark kitchens or, you know, delivery only options, right?

00:05:01:17 – 00:05:16:09

Michael Lukianoff

That’s right. And convening is really upping their game. So really it’s about the consumer isn’t I think, as weak as people say the consumer is, it’s more the big structural change is like you say, the options are. Can you say.

00:05:16:09 – 00:05:20:13

Zack Oates

That in an Austrian accent, please? The consumer is not weak.

00:05:20:15 – 00:05:23:14

Michael Lukianoff

The consumer is not weak.

00:05:23:16 – 00:05:36:01

Zack Oates

If we go the opposite. So it’s just the fact that when people are saying, oh man, like things are tough for restaurants, it’s more of a supply and demand problem than it is a people willing to spend money problem.

00:05:36:03 – 00:06:00:19

Michael Lukianoff

It is. And it’s not that there is no issue with some consumer weakness. And that’s what we would call a cyclical thing. Right? That sort of comes and goes. But what we’re talking about with population growth and the restaurants that are growing simultaneously, that’s structural, right. So as we get through maybe some patches of uncertainty or even go through another recession, possibly.

00:06:00:19 – 00:06:32:05

Michael Lukianoff

Right. A lot of people are thinking that’s what’s coming up toward the end of the year. If that happens, then in some ways it’s the double whammy. There’s some structural challenges because getting your message across as a marketer, competing against more units that are out there, the consumer has more options than if they’re simultaneously getting weaker than when we talk about same store sales and scrapping to get your share of a growing market, but of a market where your competitors and the options are growing, too.

00:06:32:07 – 00:06:55:11

Zack Oates

Are you seeing signs that a recession is coming up? Because, I mean, like I think of the recession as fully autonomous vehicles, where it’s been something that is coming in the next year for the last 11 years. Now, is there going to be a recession or is this just kind of like, will they won’t they? I feel like Ross and Rachel here of the recession for a long time.

00:06:55:15 – 00:07:00:13

Zack Oates

Are you seeing anything in the data to suggest that it might be coming or it might not be?

00:07:00:15 – 00:07:14:10

Michael Lukianoff

Yeah. I think that one of the places that you tend to look is the bond market. You know, and I think that’s where back in about a month ago when the tariffs were announced and then they got, I don’t know if they were rolled back or if they were postponed. Right.

00:07:14:13 – 00:07:16:21

Zack Oates

Either way, it was a big victory.

00:07:16:23 – 00:07:43:11

Michael Lukianoff

Huge because huge. Yes. But what end. What changed that what delayed those tariffs wasn’t the trade war. It was because the bond market started to go in the wrong direction, because instead of the market saying, okay, well, we’re going to reduce yields because we might be going into a recession. There became some questions about the structural integrity of U.S. debt.

00:07:43:11 – 00:08:10:03

Michael Lukianoff

So that’s when the bond market started going a little bit crazy. So that’s what you really need to watch, because that’s what changes the availability of liquidity and borrowing costs and so forth. So that’ll be sort of the final word on whether we’re going toward a recession. We might not, but I think that low growth and more inflation can sometimes be even more miserable than just negative growth on the economy for a shorter period of time.

00:08:10:05 – 00:08:24:21

Zack Oates

So is the solution, then, to tell people to stop opening restaurants like, like or or is it for to tell bad restaurants to just close your doors, stop taking the bottom of the barrel people. You’ve seen a lot of.

00:08:24:21 – 00:08:49:12

Michael Lukianoff

Record bankruptcies, lots of store closures, and I think that’s probably the way it’s going to get resolved. Right? There’s as you know, you know, most of the industry now is owned by either some large chains, but most of it’s really owned by the, you know, the big private equity companies. And they have plans on all of these brands for X number of unit growth over a certain amount of time.

00:08:49:14 – 00:09:13:09

Michael Lukianoff

I think that because we’re driven by franchising, that’s an important model. You have to grow in order to stay, not just relevant, but remain a good investment. I think we’re going to continue to see the unit growth. I think that to your point, there are a lot of sort of zombie concepts, right? There are concepts out there that probably should have closed down closed doors in 93, and they’re still hanging on.

00:09:13:11 – 00:09:18:06

Michael Lukianoff

You know, it’s like Howard Johnson’s what, you know, 50 years to finally say they closed their last unit.

00:09:18:06 – 00:09:26:02

Zack Oates

But that’s because Jack Papon, you know what I mean? Like any close of the Jack Papon is touch and yeah, that’s right.

00:09:26:07 – 00:09:29:09

Michael Lukianoff

We’re nostalgic. Right. Well, hold on to the original no matter what.

00:09:29:10 – 00:09:37:19

Zack Oates

Yeah, well, look, I mean, Cracker Barrel still lets people camp overnight in their RVs. They’re staying around forever.

00:09:37:21 – 00:10:00:04

Zack Oates

But as you’re thinking about this, Mike, you said in the beginning, kind of cheekily, that if you like a challenge, the maybe get into restaurants as restaurants are facing these challenges ahead, what advice do you have for them? How should they be thinking about their menu, their marketing? Getting new people in retention, like all of these levers and buzzwords, are getting flown around at every trade show.

00:10:00:06 – 00:10:02:20

Zack Oates

What should I be focused on as a restaurant owner?

00:10:02:22 – 00:10:08:20

Michael Lukianoff

No. Your concept? No. Your customer, and no your local market dynamics.

00:10:08:22 – 00:10:19:07

Zack Oates

Now, the last one’s really tricky. The first two, it’s like, okay, I get that, I get that which are by the way, those first two are hard enough as it is. So talk to you about what do you mean by local market dynamics.

00:10:19:09 – 00:10:44:16

Michael Lukianoff

So it’s never been more important to be able to understand what’s happening in your local trade area and even defining what that trade area is. It’s sort of shocking how so many of the chain restaurants don’t necessarily understand what’s going on right outside their four walls in each trade area. And this is an industry, especially at the chain level, that that likes to they almost drive it like a giant tanker, right.

00:10:44:19 – 00:11:05:24

Michael Lukianoff

So like, okay, well, here’s the simplified rules for how we run our restaurants and how we think about our marketing. But if you’re a 500 unit restaurant chain, you’re running 500 businesses, right? Yeah, 500 local businesses. And you need to understand that you need to know who your competition is. You need to know how far your customers are coming.

00:11:06:01 – 00:11:21:15

Michael Lukianoff

If you don’t understand these fundamentals, you’re at a disadvantage. And I is a bit of a buzzword right now, but the true application is starting to surface, and understanding that information locally and granularly is now possible.

00:11:21:17 – 00:11:39:03

Zack Oates

What kind of information can help me make a better decision and how do I leverage that? So for example, you had mentioned, did you talk about whether or was that something I talked to Tammy about before about like, you know, what’s going on, the local environment, what’s going on, the local community? Where are your people coming from? What’s the weather that day?

00:11:39:05 – 00:11:43:18

Zack Oates

How do you actually leverage this data in a practical way?

00:11:43:20 – 00:12:04:18

Michael Lukianoff

People think that you have to have a CDP or a loyalty program to understand who your customers, but with the mobile data sets and with credit card sampling data and weather data, local economic data, all of these things help to really identify why your sales are what they are. It doesn’t need to be this big mystery anymore, right?

00:12:04:20 – 00:12:25:23

Michael Lukianoff

If you’re actually tracking, where am I marketing? How much am I spending here, and so forth? For us, there’s a lot of companies that will sell the mobile device data or sell us, you know, credit card sampling data. For us, it’s an input. Right. So we’re ingesting that to then understand okay, well where are these pockets of customers that you should be targeting.

00:12:25:23 – 00:12:46:19

Michael Lukianoff

What are the demographics that are growing or shrinking, and how far are people traveling to go, and what other concepts are they going to when they’re not visiting? You know, all of these things aren’t just good in rationalizing what happened last week, but it’s part of being able to then model out and understand what your strategy should be going forward.

00:12:46:20 – 00:12:56:23

Michael Lukianoff

That’s actually going to get you more than your fair share, because if you’re just getting your fair share of traffic, then on average you’re down, you know, 6.5% versus six years ago.

00:12:57:00 – 00:13:11:00

Zack Oates

So what do I do with that data when it’s like, all right, what are the restaurants do my customers eat at? What do I do with that that can help me bring in another 6.5% on top of what we did last year.

00:13:11:02 – 00:13:42:10

Michael Lukianoff

So one of the ways that we’re using that specifically for that purpose is because we know where customers live and where they work, not just for each restaurant brand, but also for the segment that they operate within. We can identify if you actually spent your marketing dollars, you know, local ad and bought this small cluster of customers in basically residences that are as low as like 500, you know, people, population and as high as 3000, right?

00:13:42:10 – 00:14:05:10

Michael Lukianoff

So it’s pretty micro targeted if you target those neighborhoods through any of the social media platforms or any digital platforms at that lower level, it’s much less expensive and much more effective. It’s been tedious, right, because it hasn’t been the easiest thing to do. There aren’t a lot of platforms been optimized for that type of a purchase, but that’s all changing very quickly.

00:14:05:10 – 00:14:17:08

Michael Lukianoff

Right? And that is on the back of AI because the micro-targeting and being very specific and automating all of that, those are the types of things that agents are going to start bringing us with more ease in the very near future.

00:14:17:10 – 00:14:41:09

Zack Oates

I mean, I had a conversation with a guy who runs a marketing agency and he was telling me he’s like, in one year, no local marketing needs to get done. Everything will get done with AI. The stuff that is getting released right now is just so good for local marketing. And I love the fact that you got to really think global, but act local.

00:14:41:09 – 00:15:01:01

Zack Oates

It’s a cliche that works because when you have these multi-location brands, you can’t think of it as just a brand, because the only reason that you’re in business is because people in that community are supporting you. And so everything needs to be local. And I think that’s a great reminder, no matter how big or how small.

00:15:01:03 – 00:15:22:17

Michael Lukianoff

That’s a really good point because because I think that it’s acting local. Right. But having the right strategy. Right. Making sure that you understand what’s appropriate for your brand. Right. What’s your brand messaging is if you just leave it, you know, 100% to I and the agents, they can start reframing your brand for you. So you need to have very tight guardrails on how you’re using these tools.

00:15:22:19 – 00:15:30:07

Michael Lukianoff

If you use them right, and you have a real big advantage, if you don’t understand quite how to use them, then you could go off the rails pretty quickly.

00:15:30:09 – 00:15:42:14

Zack Oates

Yeah, and not the data rails. You want to stay on the data rails as well. So Mike, just to wrap things up. Who is someone that we should be following who deserves an ovation in the restaurant industry?

00:15:42:16 – 00:15:44:20

Michael Lukianoff

Our friend Tammy Billings. I think.

00:15:44:20 – 00:15:45:23

Zack Oates

Her man.

00:15:45:23 – 00:15:58:18

Michael Lukianoff

Her, bite size and bossy podcast entirely for women in the industry. I think it’s about time. If you haven’t listened to her, you should, because it’s a terrific podcast and she’s always got really great guests, really talented women.

00:15:58:20 – 00:16:03:15

Zack Oates

She’s a legend. Mike, where can people go to find and follow you in signal flare.

00:16:03:17 – 00:16:22:10

Michael Lukianoff

So signal flare dot signal flare. Dot I, that’s our website and you can find out more about us there. I also have a Substack The Signal Flare. Or you can search me, Mike Lukyanov, and a lot of the stuff that I presented at Mag. And each week I’m releasing some more data and some more information.

00:16:22:12 – 00:16:48:07

Zack Oates

Awesome. Well, Mike, for giving us the data to make good decisions. Today’s ovation goes to you. Thank you for joining us on Giving Ovation. Thanks for having me. Super fun. Thanks for joining us today. If you liked this episode, leave us a review on Apple Podcasts or your favorite place to listen. We’re all about feedback here. Again, this episode was sponsored by ovation, a two question, SMS based, actionable guest feedback platform built for multi-unit restaurants.

00:16:48:09 – 00:16:54:15

Zack Oates

If you’d like to learn how we can help you measure and create a better guest experience, visit us at ovationup.com.