Appreciation for New Restaurant Tech
A new tech solution for my restaurant enters the market every day. And with the flood of new products hitting my inbox I need a system to help me evaluate their claims.
I love it when I find one product that helps me with many different aspects of my business. But I need to weigh every component in a new product in order to characterize its value for my business. I ask myself, does the new product cut my costs, grow my revenue, or increase my productivity?
Once I understand the value the product is offering to my restaurant, I consider the offer to see if it is worth my time and money. I ask if the product is priced fairly for my needs, if it will work for my business, and if I have time to adopt the product now.
So when a new tech product shows up in my inbox, these are the kinds of things I think about before I decide to reply:
Products That Address Cost Drivers are Valued on Comparison
New technologies that address cost drivers can be the most attractive for both restauranteurs and start-ups. Restaurants like these products because their value is easy to see. Start-ups like these products because they are often able to fetch the highest prices.
I did the math for OpenTable a long time ago. It is expensive, true. But it is about the same price as I was paying to have someone come in early, call back reservation requests, and build a floor map from a simple spreadsheet of names. I save a little bit in payroll costs and I get an optimizing reservation system that operates 24 hours a day and never needs the week off to go to Burning Man.
From a start-up perspective, a product with a cost-cutting feature is all about Value-Based Selling. As Josh Kaufman put it in The Personal MBA, “the Value Comparison method is often the best way to get the highest price for your offer.” This is because the same value the restaurant puts on cutting the cost can be nearly equal with the price for the new product.
Today there are products like Orderly that attempt to offer savings for my Cost of Goods. These products keep a price history from all of my vendors so it is easy to tell who has the best price for things like produce, which hasn’t been tracked well in the past.
For example, say before the app I paid $100 a month for vegetables for my menu. With the app I pay $75 to run the same menu because this new product allows me to source the cheapest products. I would expect that the price for this product would start to creep toward $25 per month. But if the price is over that or if I cannot easily track the savings, it’s tough to sell me.
So I know that if I am evaluating a product that claims to make one of my key costs way lower, I can expect the price to make up a lot of that difference. That is why I keep my eyes peeled for new products that show promise but may not be perfected. Maybe I can get an early contract with lower rates locked in. Likewise, a company might be willing to partner with a restaurant in an early stage to get feedback on development and to get social proof that other restaurants are benefiting from the product.
Products That Grow Revenue Need to Align with My Brand
According to Kaufman again, there are four ways to increase revenue: increase the number of customers, increase the size of each transaction, increase the frequency of transactions, and the dreaded raise prices. When I employ a product that attempts to market our restaurant I need to make sure that product doesn’t confuse or diminish our brand.
Increasing customers with promotions that put parameters on guest behavior, like Groupon, are a thing of the past. Now products like TryCaviar make it possible for us to deliver to more customers while keeping tables inside the restaurant open for dine-in guests. It is easy for us to get the most out of this service during the slower period at the beginning of the evening and we can turn it off if the kitchen gets too busy. Also, we are not discounting our product so the customer isn’t confused about the value we offer.
When it comes to increasing the size or frequency of our transactions, a simple loyalty product like the one Valutec offers can work. It doesn’t put parameters on the guest’s experience so they choose when to come in and how much to spend. And we are free to pull out all the stops to make sure the food and hospitality we offer keeps them coming back to try new things.
I also like a simple product like Merchant Centric that puts all of my peer reviews in one spot, my inbox, so that I can quickly notice and respond to them. This is the best way to get the personal attention of some of our most vocal guests. And I am in control of the message and offer I extend.
I have heard of products like Table8 which effectively raise prices by charging a premium for reservations booked at peak times. But that is not really in keeping with our brand. My restaurant is a neighborhood joint that I hope has a certain authentic, global appeal. If I were to see that other restaurants like mine were adopting a tech product like this, I may be more likely to join. In this case, I would need some social proof that the industry was headed this direction. But I would still be skeptical.
Products that Streamline Systems Need Time and Attention to Implement
The truth is, almost any new product will require time and attention to implement. But when it comes to instituting a new technology that a number of my employees will come in contact with, the need for orientation and training can be demanding.
InVine is a product that helps keep track of wine inventory and keeps a lot of wine education information in one place. And for the relatively tech-savvy front of the house staff, this is an easy product to implement.
But what about the kitchen? A productivity tool shouldn’t just work for decision-makers. It should also be appealing to those who are going to use it: craftsmen who work with their hands and immigrant labor for whom technology and, even English, are not something they grew up with. As much as I am interested in productivity solutions for the kitchen, they are harder to implement.
New kitchen apps like Sous need to have an easy-to-use platform that the whole staff is comfortable with. Since our menu is not laminated, the platform needs to be easily updated so that kitchen staff doesn’t fall back into old habits when the menu changes. And if it can toggle between languages, even better.
The tech company and I both need to do some Education-Based Selling to get staff behind the adoption of a new product that changes how things get done. And if the tech company can’t help me in this process, I may not be interested. I look for things like a decent trial period, help with the system set-up, and onsite tutoring with key members of the team.
Are You Taking Control of Your Restaurant Technology Solutions?
With so many new tech companies focused on the restaurant industry, it is easy to see how some owners are overwhelmed by the number of pitches in their inboxes. But it would be a mistake to ignore all of the new products trying to make the restaurant business a little more profitable and fun. With the right value, a brand strategy, and good timing there is the potential for both restaurants and start-ups to benefit.