6 Things You Need to Know Before Opening a Restaurant
Read the Post
For restaurants, your reservation system is perhaps the single most important piece of technology at your property. It’s the operational system, the heart beat of your entire front-of-house operation. That’s why it’s important to understand the differences between reservation systems and how those differences may impact your bottom line.
In this post, we’re going to walk through five important things to consider when choosing a new restaurant reservation system. We selected these items, because we’ve heard time and time again, that some restaurateurs didn’t even know to ask about these important topics.
Ok! Let’s dive in.
We’re starting with perhaps the most important point to understand. Every company is a business and that means they need to find a reliable way to make money. That’s not a bad thing. It just means that it’s important to understand exactly how a company makes money and how that might impact the service or product they are selling to you.
The first group —online reservation websites — function as marketplaces for reservations. They let restaurants list their seating inventory and offer diners the ability to search for and book tables across different restaurants in their area. These services are often sold by a vendor who also offers the second type of restaurant reservation solution: the operator-facing reservation, seating, and guest management platform. In this scenario, the online reservation service invests heavily in building out its consumer facing website and apps and then subsequently advertising to diners. The good news here is that these services are well-oiled marketing machines and can help you boost covers when you need them. But these covers come at a cost, typically charging a fee for every person in the reservation that is booked. That cost is not just money. It’s data.
The impact to you as a restaurant: The business model of platforms with consumer-facing services relies on owning the guest relationships and building loyalty to them, not your restaurant. Their primary motivation is to drive guests back to their marketplace — not your website. To do this, they link back to themselves in emails and market to your guests with their own branding. Their logo and branding is front and center on booking confirmation emails, and post-visit feedback emails, and you lose the opportunity to not only capture data on your guests, but to build further brand awareness and loyalty for your restaurant.
With an operator-focused restaurant technology provider, the platform can not only integrate with multiple marketing channels to provide guest acquisition opportunities, but has the added benefit of all development on the platform 100% focused on supporting operators. And most importantly, it means restaurants aren’t competing to own the guest relationship and guest data. These restaurant reservation systems focus on helping restaurants get direct reservations and provide them with the tools they need to be able to do that. Features like a white-labeled reservation widget for websites, and social channels and direct integrations with important online channels like Google and Instagram.
Restaurant owners agree. The ability for technology solutions to talk to each other is critical. There are two areas to keep in mind here. The first is simple. Does the reservation system you are considering offer an integration with your point of sale (POS) system? It’s a yes or no question, unless you are willing to swap out both systems at the same time, which may be a big undertaking for your front-of-house team. The second, is how closely the two systems are integrated and what specific data and functionality is offered as part of the integration?
Basic POS integrations will link a table to a check, update table status and then push the final sales tally to that reservation when the check closes.
Advanced POS integrations offer all of the above, while also syncing table orders and spend in real-time and mapping that critical data to both reservations and guest profiles.
Most restaurant owners are well versed in local health and labor laws, but there are an increasing number of federal and even international regulations that operators need to be aware of.
Here’s a quick overview of the top three that impact reservations:
PCI: The Payment Card Industry Data Security Standard is a set of security standards that requires businesses to accept, process, store and transmit credit card information in a secure environment. For restaurants, this largely means using a PCI-compliant payment provider. But what many restaurants overlook is how often restaurant staff accept credit card information over the phone or via email or fax. It’s important to make sure your reservation system offers tools that can request, store and charge credit card details without your staff ever having direct access to the credit card number.
GDPR: We’ve covered GDPR in great detail in other blog posts, so we won’t go into all those details here. What’s most important to consider when thinking about a reservation system is how that system helps you track and manage the data. You should be able to give any EU requester the data you’ve collected on them and delete all data, if requested. Any technology system that holds personal guest data on your behalf (including name, birthday, address, phone, etc.) should offer an easy way for you to export and delete this personal data on behalf of a guest.
ADA: According to the most recent census, 1 in 5 Americans live with a disability (source). That is just too large a portion of the population to ignore. The American with Disabilities Act is a regulation that requires businesses to ensure their services are available to citizens with disabilities, just as they are available to the general public. That includes your restaurant, and your website. When it comes to your reservation system, the important thing to ask is whether that system offers an ADA-compliant online booking process.This includes making sure there is enough color contrast between text and backgrounds, as well as ensuring the website is compatible with screen readers. If you want a deep dive on the topic of website accessibility, check out The World Wide Web Consortium’s (W3C) Web Content Accessibility Guidelines.
Let’s talk money. In fact, let’s talk about making lots of money. It’s not usually the number one reason people set out to open a restaurant, but it’s a top priority if you want your restaurant to thrive and prosper.
Today, restaurants are exploring creative ways to create new profit streams. According to Forbes, millennials spend 44% of their food dollars -- or $2,921 annually -- on eating out. Combine this with a recent study that found that millennials are 85% more likely to purchase an experience that is personalized, and you have a huge opportunity to leverage this trend to capture new revenue by creating custom experiences for your guests.
When it comes to your restaurant reservation system, you’ll want to understand if the system comes with specific functionality to help you increase your restaurant profit margins. For most, those features include revenue-generating tools like ways to offer reservation upgrades and pre-sell event tickets during the online booking process.
Given that 7 in 10 millennials feel and act upon a fear of missing out (FOMO), you’ll want a vendor who not only lets you organize revenue-generating events and experiences, but also help you to spread the word by email (and track results so you know which campaigns are worth investing your money and time). Does the system you’re considering empower you to easily market custom experiences? For example, you might be able to offer guests the ability to select their own seating area (think patio vs main dining room) or select a limited time tasting menu or prefix meal. These revenue-generating tools come standard in many reservation, seating and guest management tools, like SevenRooms.
If you are choosing your reservation system based only on how many covers it brings you, you may inadvertently overlook this important question. The best restaurant reservation systems help you to fit more parties given your set number of tables and their turn times. Managing the floor of a busy restaurant is hard work, especially for restaurants with walk-in seating. But with the right table management platform, your front-of-house will be humming in no time. Look for these key features
Here’s a quick list of important questions to ask the next time you demo a new restaurant reservation system.
The right restaurant technology partner really does make all the difference. Even if the products are exactly the same - which most certainly are not -- the experience working with various companies can be vastly different. Restaurants don’t fit into a “one size fits all” box, so it’s vital to find a technology partner who is flexible and willing to listen to your restaurant’s unique needs.
Good luck on your search for a new restaurant reservation system and if owning your guest relationships is an important priority for your restaurant, request a free demo of SevenRooms today.