Nov. 23, 2016

By Brian Duncan, Partner, Chowly Inc.

The recipe for a restaurant's success is simple: Keep warm bodies in the seats and the rest of your problems take care of themselves. A steady flow of clients helps your restaurant reduce food waste since food doesn't spoil when it has only been on the shelf for a day. New customers will alleviate your marketing problems, since the best public relations campaign comes from happy customers. Most importantly, a steady flow of bodies keeps cash flow consistent, allowing you to invest in new technology to help grow your brand.

But how do you choose the right technology to invest in?

We all know that the amount of investment capital flowing into the food tech space has led to a virtual saturation of new restaurant technology, bringing us everything from online ordering systems to self-monitoring ovens, and even a burger-making robot. It has become difficult, if not impossible, for restaurants to know in which technology they should invest.

Here is a three-step process to help choose which technology is right for a growing business.

Step 1. Change your way of thinking

How restaurant owners decide to spend their money is directly related to new customer acquisition. But technology does not work this way. Investing $10,000 in new technology won't necessarily increase new customer acquisition by 20 percent. Instead, restaurant tech should be viewed as a way to increase efficiencies, improve customer retention, and decrease labor costs.

Edgell Knowledge Network polled U.S. IT decision-makers whose organizations, in the aggregate, own or manage nearly 33,000 restaurant units. While 87 percent of those responding plan to invest in restaurant technology to improve process efficiency, more than half said they're doing so to improve customer engagement.

Furthermore, Edgell Knowledge Network states that 37 percent of restaurant IT decision-makers said they're investing in technology to increase employee productivity. And, 7 percent of respondents said they're investing in the technology to keep up with their competitors, while 5 percent are doing so to keep up with franchisee expectations.

So, investing in restaurant technology can save money by putting more dollars into the restaurant's bottom line.

Step 2. Understand the long-term investment

There is nothing that stops investment in restaurant tech faster than the initial installation fee. They can range from $100to as high as $25,000. Despite the price, they do need to be payed. But remember that set-up or installation fees are a classic sales tactic that companies use to keep your focus off the real revenue generator.

It's easy to get the sales rep to lower install fees, but they never budge on the ongoing support costs. Ongoing costs and maintenance fees are where tech companies make their money, and where most restaurants could get hurt in the long run. Therefore, this is where restaurants should do the heavy negotiating.

According to NCR, the number one reason that IT professionals in the restaurant industry choose one tech product over another is the cost of required upgrades, so make sure that you're getting the value you expect from services that you pay for monthly. 

That means asking specifically if upgrades are included in the service fee. Also ask if there is an extra charge for support and whether ongoing training and fixes are included in support fees. If you receive satisfactory answers to these questions, you should be out of harm's way.

Step 3. Make sure your technology speaks to your current systems

The food and beverage industry conditioned many restaurant professionals to expect very little from technology. Notebooks, three ring binders, and clipboards were common tools and the Excel spreadsheet was the greatest technological breakthrough.

But now, data companies can provide valuable customer behavior data, while scheduling software lets you make shift changes on the fly, update your staff via their personal mobile devices, and introduce millions of new customers to your food. Nonetheless, if these capabilities don't connect to your POS system, they may end up being more hindrances than helpful tools.

The POS is the brain of your restaurant — imagine trying to make a pizza if your hands weren't in sync with your brain! Having software systems that communicate seamlessly can be the catalyst your restaurant needs to outpace your competitors. So if, for instance, your employees are bogged down with inefficient and disjointed processes, it increases errors and takes time away from their more important core duties.

Important processes, such as order processing, invoicing, expense approvals and fulfillment often take longer to complete and quite often can be erroneous. Be sure to ask your sales rep for a list of software that integrates with the solution you are interested in purchasing. Also, make sure to consider third-party companies that provide integration solutions.

The bottom line is that the software landscape can be difficult to navigate, but remaining focused on improving efficiency and asking the right questions, these tools can help your restaurant flourish.


Topics: Customer Service / Experience, Franchising & Growth, Marketing / Branding / Promotion, Online / Mobile / Social, Online Ordering, Operations Management, Systems / Technology


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