Oracle Hospitality

Analytics, loyalty and payment will be top focuses for restaurant technology in 2017, according to a group of restaurant and technology leaders that gathered at Hospitality Technology’s 2016 Restaurant Executive Summit. During an interactive workshop titled, “Customer Engagement Strategies of Today and Tomorrow to Grow Market Share & Drive Loyalty,” attendees had the opportunity to share struggles, solutions and potential strategies for how to better engage guests and improve customer experience and satisfaction.

Following presentations of data from HT’s 2016 Customer Engagement Technology Study and insights from an Oracle study into consumer loyalty program habits, attendees split into small groups to work through issues that were impacting them.

Big data, big benefits

A common theme that emerged was the fact that an engaged customer is a satisfied, loyal customer. In order to win deeper engagement, however, deeper data and analytics are needed in order to create the personalized experiences that guests are demanding.

Word cloud - Technology related words

Customer experience management strategies are a top priority for restaurants. One attendee admitted to struggling with how to integrate customer-facing technology into his casual dining model without sacrificing personal interaction with staff. As full-service restaurants are losing traffic to fast casual and QSR models, the executive recognized the importance of finding ways to leverage technology to increase great service.

Dr. Dan Connolly, Professor of Business Administration, Portland University and co-author of the 2016 Customer Engagement Technology Study, noted in response. “Often you need to give customers a choice and let them define the service they want. You need to discern what fits their persona and their needs at that moment. It’s not one size fits all.”

Compiling guest data to make those smart technology decisions will be key, but while restaurants have lots of touchpoints from which to glean data, analyzing that data to make it actionable, is often a struggle. Operators agreed that they did not have the infrastructure in place in terms of personnel to consistently do data analytics. Charles Banks, Senior Director of Business Intelligence, for Uncle Julio's Corporation, admitted that he will do some analytics on his own, but a more sustainable method of analyzing data and communicating it to the proper parties is needed.

Restaurateurs concurred that great programs are available and they all have data in them, but they struggled to find ways to do anything with that data to identify ideal customers or who to target for repeat or new business. “People are looking at historical data to establish baselines, but nothing predictive,” one executive noted. “We are collecting data but not analyzing it.”

There was a general consensus among the operators that unless companies hired analysts to scrutinize data, nothing is being done with it because most restaurants don’t have the bandwidth.

Leveraging loyalty programs to glean customer insights

Among tech initiatives for 2017, loyalty will continue to be a hot topic for restaurants. During the workshop one group of executives shared details of a dialogue that included discussion of ROI as well as what was entailed in deploying technology programs for loyalty over and above paper and punch card programs. The decision to launch loyalty programs that live inside or outside an app was one that restaurateurs admitted came down to identifying what their customers’ expectations are.

While operators admitted that traditional paper-based loyalty programs can work, the major benefit of digitizing traditional loyalty programs was identified as being able to gain customer insights and then using that data to improve overall experience.

According to executives, the return on investment quandary for loyalty is that ROI for programs is built on the “third phase” – customers returning. One executive noted that for companies that find themselves stuck between paper and digital loyalty programs – that ROI often never manifests itself.

Payments & ordering go mobile and online

Another top technology initiative for 2017 encompasses payments and enabling customers to be able to do settle bills how and when they want to. This discussion also included conversations about ordering and the importance of an omni-channel experience in restaurants. Executives explained that mobility was a major point for those who are shopping for new POS systems – in as much that being able to integrate with online ordering and mobile strategies is a key component. Several executives also noted that being able to have systems that are capable of doing both ordering and loyalty would be beneficial.

Restaurants that have implemented online ordering shared that they were seeing fewer orders over the phone because customers preferred ordering online. This results in those restaurants seeing labor savings, simply for not having staff needed to man phones and manually input orders.

With rising labor costs, finding ways to save on workforce overhead are a key concern for restaurants. In addition to pushing orders online, many restaurants are migrating to kiosk solutions. One executive noted that customers will spend twice as long ordering on a kiosk versus ordering through a cashier. So while there might not be a time saving, the willingness and preference of guests to use the technology opens an avenue for fewer staff needed to man registers. Another benefit of kiosks that executives noted is seeing an increase in incremental sales. It was stated that “kiosks will always do the proper upsell.” While employees might not want to “intrude” on a customer’s order, a kiosk will yield higher tickets because of instant upselling programming that doesn’t impeded on the customer’s seamless experience.

Mobility will be important for restaurants moving into 2017 for both employee- and customer-facing sides of the enterprise. For the POS, operators noted that even if they weren’t enabling mobile payment or mobile ordering strategies at this time, they needed to be poised to enable it in the near future with technology that has the capability. “There has to be an understanding that even if mobile POS is not an immediate need for your business, it will be in the future and you don’t want to lock yourself into a bad place,” Todd Michaud, founder of Power Thinking, says.

Another sentiment that was shared around mobile ordering was the importance of testing. Rather than focusing on the outcome of a technology rollout in an “it might/it could” scenario, it’s important for operators to be able to say “we know/we tested/we saw.” With budgets and time being limited, there isn’t room to fail and operators agreed that there are many initiatives that need to be tested to see if it’s a fit for a particular business. For example, will pay at the table work for your business? Will it improve table turns or increase ticket sales? A pilot can help to establish better expectations for a wider rollout before a larger investment is made that won’t yield ROI.

With rising consumer expectations, restaurants anticipate big challenges. There are many advantages to conveniences such as online or mobile ordering, however if a simple glitch in the system ruins the customer’s experience, they might never return. For example, one executive called out the benefit of customers being able to customize their online and mobile orders, but then the restaurants system has to accurately capture any and all modifiers. Order accuracy is of utmost importance otherwise the technology has created a friction point where it was meant to eradicate one.

Being an innovator and the first to market with a technology can have a lot of advantages – especially if the innovator gets it right. One executive pointed out how Starbucks’ mobile app is what many in the industry try to emulate. “If you get out in front of the curve, you can be that much more agile and nimble in developing things and that becomes important in this day and age,” Dr. Connolly points out. “If you miss the bus, sometimes it’s a long wait before the next bus comes. The stakes are greater, and there’s more catchup to do.”