A Successful Restaurant Isn’t Just About Good Food and Service…An On Line Reservation System has become a condition precedent to bottom line success
By: Tom Brown, Principal, The Redux Group
Most would agree that to qualify as a great restaurant to customers, an establishment must serve excellent food and have a professional front of the house. However, a successful restaurant also measures itself through its financial reports. Is it making money or losing money? To succeed financially, a restaurant must first get both enough customers and the right customers in the door to generate a profit. Profit in the restaurant business can be an elusive target.
A local restaurant that I find decent, but not great has been a mystery to me. Whenever I drive by, the parking lot is full and often there are people waiting outside. Why is this? The food is “decent” the service and ambience are “OK”. I have decided there are two major reasons for this restaurant’s success: advertising and an on line booking system. In fact, they advertise all the time, even during peak season when one could argue that they might not need to spend the money. They also utilize their on line reservation system for much more than reservations. The system is an amazing, on line marketing data base and built-in marketing guru, which produces offers, specials, birthday reminders, and many other invaluable marketing tools and information.
One can’t argue with advertising and how it can contribute to your success, but, on-line reservations systems have gone full circle. They were born during the technology boom of the nineties, consolidated and went of out business, and now have reemerged, and at least one is stronger, bigger and better.
If you are not using a reservation system currently, you are missing the boat
. America’s top restaurants have adopted the concept, and now they wonder how they lived without it. One restaurateur told the following story. When he announced to the staff he was installing a reservation system, his “front of the house” staff said it was unnecessary. They insisted that they knew their most important and most frequent customers, and felt this system could undermine their ability to manage the flow of traffic. The owner asked them to name the ten most important customers and estimate how frequently they visited the restaurant.
He noted this information in a file and checked it after the on line system had been up and running for six months. The result: his front of the house staff wasn’t nearly as good at capturing data as the system, or his best customers had dramatically changed their dining habits. Here is what he learned. Only three of the top ten customers the staff named made the owners top ten list generated by the system. The others failed for a variety of reasons, e.g., they did not frequent the restaurant nearly as often as the staff thought they did, their average per check charge fell below the target or they consistently made reservations but failed to keep the reservation, sometimes without the courtesy of a cancellation call.
Conversely, there were seven customers on the new top ten list that the staff hardly knew or did not know at all. They generally represented regular customers who were quiet, not demanding and dined regularly, but were almost invisible to the staff. Their per check charge was nearly always above the target, they were under the radar and simply did not draw attention to themselves.
The lesson to be learned…our recollections or opinions can’t begin to compete with the data gleaned by an automated system. Add to that the fact that the system does much more than booking tables and gathering information, and we readily see the value it can add to developing profitable business. Smart businesses use the data over and over for promotional pieces to touch their customers again and again via newsletters, notices of specials, invitations, birthday and holiday reminders and much more.
There are three notable systems available today. They are OpenTable.com (the survivor from the tech bubble), SavvyDiner.com, DinnerBroker.com and I guess we also should name a fourth, Restaurant.com
Simply stated, the oldest and in our opinion most reliable is OpenTable.com. It makes reservations (for a modest charge to the restaurant) and offers some valuable data to mine while assisting with a variety of marketing tools such as emails, newsletters, etc. Ten years ago, one Florida City I’m familiar with had exactly two restaurants on OpenTable.com, today there are thirty-nine, virtually every decent restaurant in town.
The installation and use of a reservation system with a robust data base and marketing features is a must. You should not think about operating a fine dining restaurant without the system. If you don’t have one, it should be your next important decision.