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Press Release

From Reservations to Tableside Ordering, Dining Goes High Tech

May 1, 2001
Service is faster, more personalized; operating costs are lower.

People love visiting places where everybody knows their name. But in today's world of high employee turnover, it's difficult enough to execute the basics, much less remember a patron's preferences. Now, new technologies can not only ensure that regulars have a great customer experience, but also leverage information about the customer into marketing concepts that leave the host smiling.

"'Faster, cheaper, better: choose any two' is a classic business axiom that restaurateurs, like executives in any industry, have had to contend with," says Gary Cooke, industry manager for hospitality & food service at Microsoft. "But today, forward-thinking restaurateurs are beginning to use technology as a way to choose all three: faster service, improved operating costs, and a more attentive, personalized dining experience."

Cost recovery for such systems is achieved through several revenue streams, notes Keith McNally, vice president of business development for San Diego-based Ameranth. "On the ticketing side, the driving force is that when you use only a voice-based system, you can operate only while people are on duty," he explains. In many clubs and restaurants, three or four people may be devoted to dealing with reservations and explaining the upcoming entertainment offerings. If half of the venue's business can be generated from the Web site, then that allows half of these employees to focus on other duties—or saves those staffing costs altogether during those hours. The Web reservations also work 24 hours a day, McNally continues. "There are a number of customers who will do business after hours, when they get home from a long day. They like to see bios and pictures of the upcoming performers and go at their own pace. The ability to offer 24x7 access with fewer people while increasing sales is a compelling combination."

But the savings don't stop there. Relieving servers of taking initial food—allows now placed through the Web site—allows the staff to focus on selling revenue-generating drinks and desserts while improving service. The system's database also generates reports to evaluate the popularity of menu offerings and other trend data that typically are lost in a paper system.

Information Served Here
"Leveraging online systems in restaurants makes sense, given the Internet's pervasiveness in the commercial and consumer worlds today," Microsoft's Cooke says. "But steady improvements in computing power and affordability are also creating opportunities for restaurateurs to analyze their businesses more deeply, know their customers better, and reach out to them in more personalized ways."

The advantages of online reservations are becoming clearer to many restaurants, but they are only a small part of the driving force for the success of OpenTable Inc., a leading provider of Internet-enabled customer relationship management solutions. The company allows diners to make reservations at more than 1,100 restaurants through the OpenTable Web site as well as via a variety of online distribution and content partners. The convenience and accuracy are significant, but restaurateurs gain much more from this system, explains Regan Daniels, director of communications for the San Francisco company.

"We believe the trend is to provide more personalized service, especially for regulars," she says. "People appreciate the perks of regular patronage, whether that comes through their usual drink, waiter, or table. They like being recognized for their continued business. Our systems provide that recognition, offering both customer loyalty benefits and additional ways to generate revenues with expanded marketing options."

Through the OpenTable reservation database, key information and requests are tracked for each guest and remembered for later visits. The system also collects marketing-related information, such as addresses, saving time and reducing errors that were caused by gathering the information from business cards and then re-keying it for marketing use. A customer's reservation history is also maintained, including the number of reservations, cancellations, and no-shows. "It allows restaurants to discover which customers have visited them frequently, say three times in two months, so that they may acknowledge that repeat business," says Daniels. That, in turn, encourages more repeat business.

Direct-Marketing Possibilities
In addition to better customer service, the database can be mined for specific demographics provided by customers, allowing restaurants to aim direct-marketing pieces to wine lovers or vegetarians, for example. It also allows the restaurant to track business trends-forecasting traffic on different days and time periods along with menu-item usage and wine consumption. It even can track recommendations from hotel concierges to learn which are best at directing diners to the venue.

"The system offers paybacks through the operations costs that are saved, by reducing the number of people needed to take reservations and seat people; but it also creates many ways for the restaurant to expand its marketing efforts and enhance revenue," says Daniels. "So it both cuts costs and adds profits."

Online Dining Rewards
Recently enhanced with an online Dining Rewards program similar to plans offered by hotels and airlines, diners can earn points for frequent visits, she notes. OpenTable, not the restaurant, handles the loyalty program. This avoids giving the eatery a "discount" image. This allows restaurants to provide incentives that direct customers to less busy periods or to other actions that make better use of the restaurant's resources. For instance, pre-theater dining locations can offer more points to diners who make reservations after theater times, which otherwise would be dead. The system is now being offered in San Francisco and New York, and soon will be expanded to other markets.

"High-end 'tablecloth' restaurants aren't looking to turn tables or offer discounts, but they do want to provide the best customer relationships they can create," Daniels says. "Currently, many of them don't know how often their customers come in or what their preferences are. This system will allow them to make meal or drink recommendations based on past preferences and make their customers feel recognized."

"Intelligently deployed technology can help restaurateurs trim costs and boost revenue any number of ways, including reduced server staff requirements, lower server turnover, additional guest traffic, better distribution of business across dayparts, improved guest loyalty, and incremental revenue from personalized marketing programs," notes Microsoft's Cooke. "When restaurateurs quantify these benefits, the technology investment can look pretty attractive."

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