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Turn Data Into Dollars

By Christy Simo 

Rich Chey. Photo by Sarah Newman

Whether it’s cloud-based POS systems, mobile loyalty apps or iPad POS systems, Georgia’s restaurants are continuing to integrate technology into their business model – and taking advantage of the data collected in the process.  

One such restaurant owner who is benefiting from using more technology is Rich Chey, who operates Osteria 83 Pasta & Pizza, Dragon Bowl and two Doc Chey’s Noodle House restaurants in Atlanta along with a third Doc Chey’s in Asheville, N.C. 

For many years, his company, HomeGrown Restaurant Concepts, used a loyalty card designed much like a credit card – customers showed the card when dining and got discounts and deals, and servers swiped the cards to keep it current. A few years ago, however, the company switched to a mobile loyalty app. Now, Chey says, there’s a lot of information at his fingertips.  

“We’re able to track their spending history – how much they spend, what they like to order. It’s pretty detailed, a lot of information on our customers’ spending habits,” he says. “We use it a lot for marketing, either through text messaging or through email, and communicating with these guests.” 

Chey can also use the data to thank regular or high-spending customers with customized rewards.  

“We segment our customers based on their spending habits,” he says. For instance, the company offers a birthday reward to all of its Karma Club members, but the amount’s not the same across the board. “It really depends on what your spending habits are and what your frequency of service is, the level of your gift,” he says. “So if someone only comes in once a year or a couple times a year, their birthday reward is going to be very different than someone who comes in every week.  

 

Tracking Trends

Chey’s switch from a physical loyalty card to an app tracks a larger trend in the restaurant industry. As people continue to rely on apps and smartphones to manage their lives, they’re expecting restaurants to do the same – and to interact with them that way, too.  

 “There’s this whole movement toward engagement and the dining experience. Having the guests involved in what we’re doing and the decision-making gets them more invested in what we’re doing. It helps with their brand loyalty.”  

According to Technomic, a research and marketing firm for the foodservice industry, that trend is impacting several aspects of how restaurants do business. Yes, guests think tech is important, especially at limited-service restaurants (LSRs) like the fast-casual segment and those restaurants that offer take out and delivery. At these types of places, 38 percent of respondents think technology amenities are very important – that number is even higher with the millennials (between the ages of 18 and 34), 50 percent of whom think it is very important.  

People also want to read menus on their phone, with 44 percent wanting restaurant websites to be mobile-friendly. Nearly half of 18-34 year olds also want to be able to place orders online or through their phones.  

Guest interaction with technology is not confined to quick-serve or fast-casual restaurants, however. In full-service restaurants, some 26 percent of consumers have used a tabletop tablet, with 38 percent of 18- to 34-year-olds doing so.  

“Customers ordering for themselves is going to definitely become more common,” Chey says. “All of our concepts are fast-casual at lunch, and table service in the evening. At lunch I could see having self-serving kiosks where people just order [for] themselves.”  

And while retail businesses have been mining data for years, it’s only recently that the restaurant world is getting in on the game. While several years ago there may have been only a few main players when it came to software for inventory management, seating diners or scheduling employees, now there are dozens of companies intent on helping you run your business better through technology. (See page 14 for more on some of these popular apps.)  

Many of the apps and cloud-based software, which typically run on iPads and smartphones, collect information on customer preferences – what time they came in to eat, how long they stayed, what they ordered, etc.  As more restaurants continue to incorporate the technology into their business, however, it’s led to another asset that was once overlooked – all that data that accumulates, both about your customers and your business.   

“Big data” – the big buzzword in the business world – is the huge amounts of information stored within those apps and software that can be analyzed to reveal patterns, trends and associations about human behavior and interactions. From what your customers order and how long they stayed to their drink preferences and whether they prefer to sit inside or out, it’s information that restaurant owners used to have to rely on their instincts and observations for but is now almost instantaneously at their fingertips.  

 

What That Data Can Do

So now that you have all this information, what do you do with it all? While the sheer volume of data generated can seem daunting, it is immensely helpful, especially since many of today’s cloud-based software and apps include ways to analyze the data it provides. Here’s just a few ways you can use big data to your advantage: 

Test specials and get immediate feedback. Chey often asks Karma Club members to provide feedback on menu specials.“We tend to use the feedback with the new menu items or with specials,” Chey says. “We always have our idea of what the customer will like, and sometimes we’re right on, and sometimes we’re way off. So it’s usually better to get a little feedback on that first before we actually roll it out.” 

Streamline your product inventory. No more clunky excel files and stacks of paper invoices. Today’s inventory management apps offer paperless invoicing, automated accounting and the ability to see price trends and track inventory turns. So you can determine why, exactly, your food costs went up one month to the next, or even week to week or day to day. 

Know whats up with your employees. You can get more accurate information on the number of sick days, vacation or hours works per week for each of your staff, how often they’re working at each of your locations, working opening or closing shifts, and more.   

Provide precisely tailored products or services to different types of diners. You can narrowly segment your customers based on anything from how often they eat at your restaurant to whether they order vegetarian dishes to how often they order take-out.  

“We can segment those guests based on what their frequency is or their spending levels are,” Chey says. “We can get a better idea of what our really regular guests feel about what we’re doing, as well as just the occasional visitor.”  

Create a more effective menu. Figuring out which items are big sellers and which ones aren’t – and why – used to take time to figure out at best, and was a guessing game at worst. Some apps provide information to help you price menu items more effectively, promote specials and to which group of diners, and determine which ones are too costly to keep on the menu.  

Boost employee performance and loyaltyEspecially with younger employees, managing their shifts or communicating with managers via an app makes life easier for them, too.  

“With the millennials, they’re definitely more comfortable with this kind of management tool. … They’re comfortable with the interface and the fact that we can communicate with them fairly seamlessly and as frequently as we want to,” Chey says. “It’s a really good thing. The whole excuse of ‘I didn’t know I was working today’ just goes away.” 

Some apps even can tell you how often you’re selling appetizers and dessert and which employees successfully upset more frequently than others. Not only could this help boost server performance, it can also show managers where more training may be needed.  

As restaurant owners become more comfortable with using these apps and software, many predict the industry will start to change as a result. Restaurants will eventually start customizing their offerings to suit individual guests through everything from menu offerings to server behavior. And these types of technology are not just for the big chains or big-city restaurants. In fact, according to industry research firm SMB Group, 18 percent of small and 57 percent of medium-sized businesses of all kinds are already using what it calls “business intelligence and analytics solutions.”    

For Rich Chey, who also uses 7shifts for scheduling employees and Aireus, a cloud-based POS system, it’s not only helped the bottom line, it’s allowed him to free up his time to focus on building his business, not doing the busy work.  

“We all kind of look at this administrative stuff as being necessary evils. We don’t really enjoy doing it, but we have to do them,” he says. “A lot of these tasks that aren’t making any money, you’re spending less time on those, and you can actually spend more time on tasks that either improve your customers experience or increase sales.”

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