12 Reasons Why a Restaurant needs a Mobile App?
If you were able to capture an additional 16% of your gross revenue via a mobile app, would you be interested in learning more? How about, if you were able to garnish $1.6B, yes billion dollars using a mobile app, would you be interested in having a mobile app built?
What does 16% and $1.6B have in common? Those figures represent the success of Starbucks mobile app. You may be thinking “yeah, Starbucks has brand recognition, loyal followers, plus great coffee and food”, but those qualities don’t always breed success or determine the success of a mobile app, but for Starbucks their mobile app is a key contributing factor to Starbucks success.
I have been in the mobility space for many years. I have seen this space become saturated with mobile application developers. Many are specialized. Many claim to be specialized. Many fly by the seat of their pants. I have written a blog about seeking out the best mobile application developers. In this blog, I am going to provide at least 10 reasons or more why you should consider building a mobile application and ways to possibly increase traffic into your restaurant.
Whether you are a food service company catering to sports stadiums, convention centers, or a business owner of a single restaurant or own an enterprise of restaurants, Beacon technology has become the “de facto” technology for providing on demand requests. Beacon technology is used to track customers, via GPS technology, to follow and understand user behavior.
Beacon Usage Scenario 1: How to increase food sales? Let’s say you are offering a food promotion within a stadium setting – say football. Hypothetically speaking, let’s assume season ticket holders have already downloaded, installed, and enabled push notification on their mobile application. You decide it’s time for an end of the game special. You push out a food promotion offering a 20% discount for purchases during the 4th quarter. It’s your last effort to increase food sales before the end of the game.
Beacon Usage Scenario 2: Food Service Delivery. Another example would be using the customers GPS proximity to deliver food or beverages to their location, instead of the customer leaving their seat during a playoff game.
As a concessionaire, your motive is to drive revenue. Location based technology provides a vehicle to attract prospective customers into your establishment by offers incentives or motivation that ultimately drives results.
Bookatable out of the UK has 119 restaurants. They started using iBeacon technology to send push notification to anyone within a 150 feet radius of their restaurant. The user receives the notification — only after the app is installed and Bluetooth enabled. By using push notification, you remove the decision-making process, “where should we go for lunch/dinner?” to “hey, I just received a coupon for a free appetizer with the purchase of a main course”, thus influencing the user to take action.
Loyalty and Referral Programs
Are you looking for a low cost strategy that produces a ROI of 780%? That is exactly what Pizza Ranch based in Orange City, IA. did when they ran a promotion on Black Friday, November 27, 2015. They own, operate and have 119 franchises in 13 states. In 1991, they created a rewards program called Ranch Rewards. Today they have 650,000 members. Pizza Ranch mission was to create a promotion to increase same store sales. The promotion they offered was to double their customer’s dining points on Black Friday. The net result of the promotion increased revenue 67% compared to other operating business days. It was a success.
Loyalty programs are not only redeemed for free items. Did you know that 65% of consumers will download your app if you offer them a reward? Checkout this research. Further research reveals that 80% would frequent your restaurant if you offered additional incentives to return even though they might have to continue to purchase additional items.
Reward programs don’t have to be complex or difficult to get started. For example, they can be as simple as a dollar for dollar reward or dollar for points. Consumers love visual aids. As the consumer continues to earn rewards, why not incorporate a visual display showing their current point status followed by a metric indicating their next achievement goal – thus creating a motivation to revisit.
Referral programs are typically winners with most businesses. As marketers, it’s one form of vehicle used to get a user’s email address. For example, we all have experienced those annoying pop-ups on websites. Yeah, I know, you hate them – so do I, but they work. How many times have you seen this one “for every friend you refer, we will give you and your friend $10 or a 10% discount off your first purchase”? Incentivizing people to take action is the simplest promotion to garnish new customers. Check out “7 Customer Loyalty programs that actually offer value” to learn more about loyalty programs. Did you know that “current customers spend 67% more than new customers”? Sure you did, if not, you can read more here. Here is a list of “Top 20 Loyalty rewards programs for small business. Did you also realize that it costs more money to acquire a new customer than keeping your existing one happy? If you are interested in learning about customer acquisition, read here
Order Fulfillment Efficiency
Now that you have a little understanding of push notification and loyalty options, your next challenges are keeping up with order fulfillment. Customers hate waiting. Millennials dislike waiting even more — even if it’s only 5 minutes. 5 minutes seems like an eternity when you are under a time constraint. If you ask a customer how long they waited to place their order, pay, and wait for their food, do you think they would have any idea how long they waited? To some people, a 2-minute wait to too long.
As a business owner, I would ponder the question, “how can I provide a service to my customers that would increase customer satisfaction, decrease wait time while providing a benefit to my business like increasing employee productivity, sales, and managing operations more efficiently?
Solution: Why not provide an option for ordering food via a mobile app? Millennium’s are always on the go, prefer takeout and delivery service. The days of manning the phone for order takeout are becoming a thing of the past and/or becoming less frequent. Digital technology has created a way to cater to the millennial generation and reduce order inaccuracy. How many times has a phone attendant written down a food order incorrectly? Why not eliminate human error? Build a mobile app that offers a menu for quick order fulfillment, allows the option for special requests/notes, while incorporating automation to an output device – a printer. The software can direct each item to the proper station within the kitchen – salad to the cold station, hamburger to the hot station, and a summary order to the take out area to prep for pickup.
By providing a means for ordering food, creating a faster process of order fulfillment, removing the possibility of human error, you would ultimately reduce operational expenses. You ask how? The average order taker earns minimum wage? A typical order takes 5 to 7 minutes to place. Here is a typical dialogue. Now assume you remove this conversation. How much would you save in wages in a month or in a year?
Here are 6 businesses that allow customers to place an order using a mobile app – 6 Chains that do Mobile Apps Right — from Chipotle to Starbucks. Would you like your business to be on this list? I bet you would. Keep reading.
How do I receive payment? That is pretty simple. There are a number of eCommerce providers who have simplified the in-app payment process. Here are just a few payment gateways to choose from: Stripe, Braintree/Venmo Touch and PayPal. By creating a simple, but secure means for credit card payment, you eliminate the hassle involved with typing in the customer information and credit card number. With in-app commerce, you also eliminate one possible avenue for fraud – copying a customer’s credit card, read about McDonalds. Plus, one less duty for the delivery guy.
Millennials + Purchasing Power
What would you consider to be a deciding factor when determining whether or not to invest into developing a mobile application? Would it be cost? ROI? Revenue? Solving a business problem? Who is my target market? What are the demographics? We would like to assume EVERYONE is our target market, but research shows that “millennials purchasing power will soon exceed that of every other generation”. Wow! That is $170 BILLIONS each year.
According to JWTIntelligence, who conducted a survey revealed that US and UK millennials (18-34) are most interested in using their phone to make purchases if it speeds up the transaction, makes splitting the check easier, can replace cash, and helps keep track of purchases. Venmo, a favorite of the millennials because of its social element, has seen a 50% growth, $700 million, in Q2 using their payment gateway.
According to Food Tech Connect, people are increasing interested in paying for meals electronically. Of those surveyed, 40 percent say they would like to for quick service meals via a mobile or wireless device, and 55 percent say they want mobile payments. Millennials prefer to pay for their purchase within the mobile app. On average, Millennials spend $2,639 per year on burgers, pizza, and coffee compared to non-millennials of $2,386 or roughly $219/month or 10% more.
These surveys don’t lie. Millennials are a power pack. Small and large businesses need to cater to this demographic group. The results are significant and the results are impactful. Are you ready to step up yet?
I would like to Place a Reservation
How do you fill your restaurant? You build a mobile app like OpenTable. How many times have you thought about calling a restaurant to place a reservation, but you got interrupted? Once, twice, or many? All of a sudden, hours later, you realized you never placed that reservation. If you had a mobile app, you could have launched an app like OpenTable to make a reservation.
Over the last several years, companies like OpenTable who was acquired by Priceline for $2.6B and TripAdvisor acquired LaFourchette for $140M sees online reservations as a great investment. How many times have you been out of town wondering where are you going to eat? What are your options? Do you order room service, eat at the restaurant in the lobby or google local restaurants? Why not have the capability to search for a restaurant then reserve a table within the app? Simplification of a process, like reserving a table, is the easiest way to increase traffic into your business.
In the era of booking reservations online, companies like OpenTable seat more than 16 million diners per month in 32,000 restaurants. Are you seeking a vehicle to get more traffic into your restaurants? If you are going to cater to the most powerful generation in decades, the Millennials are seeking convenience and easy to use mobile apps. It is time to automate the process within a mobile app, create a call-to-action (CTA) with the ability to click on the phone number for an immediate dial or allow for creating a reservation.
Creating Value-Add by Automation
Lets say, your business is in the middle of downtown Chicago or NYC. The space of your deli shop is limited. The busiest time of the day is lunch between the hours of 11:30am to 1pm. People are getting irritated because they are pressed for time. Your employees can only work so fast. The store receipts have been stagnant for months. How do you increase sales?
Follow Starbucks or Dunkin Donuts. Starbucks added a new feature to their already so popular mobile app. They added the ability to preorder and pay ahead for their purchase. As a deli owner, you could benefit as well. Your customer could place their order, set the pickup time, and prepay for the food. Your staff receives the food order, prepares and packages the food waiting for pickup. The customer walks in and out and out the door within a few minutes.
In the meantime, the rest of your customers are standing in line waiting to place their food order or possibly waiting for their food. According to PYMTS, “Starbucks has seen a 100 percent increase in unique visitor trend in a two-year period. And on the Dunkin’ Donuts side, it’s seen an astonishing 456 percent increase in the same two-year time period.” Are you getting the picture yet? The impact of having a mobile app to pre-order food, plus the ability to pay from within the app will only increase customer satisfaction and possibly gross receipts. How many times have you said “lets go to XYZ for carry out, but later decided the wait was too long?” I know I have!
Here is another statistic that you may find interesting. According to grubHub (yes, small “g”), “It takes 2 minutes to process a phone order and 45 seconds to process an on-line order — netting more time to prepare and make great food, freeing up staff members who take orders, and improving order accuracy.” Are you ready to take the challenge yet or do you need more insight? I’ll provide more insight.
Have you read the latest customer reviews on social media? We have seen them all – some positive and negative. Since you are reading this blog, I will base my opinion only on the positive aspects of a review. Building a mobile app that allows for customer reviews can increase foot traffic substantially – millennials are social creates who base their choices on customer reviews. They “value relationships and recommendations”.
How often are you at a restaurant and notice a customer taking a photo of their food? I would say very often. That photo gets shared across numerous social media platforms. At the end of the evening, everyone becomes a food critic. They begin blasting social media with positive comments about the restaurant, wait time, food service, quality of the food, and ambiance. Back in the day when consumers relied solely on food critics to decide on which restaurant to eat at are long over. Don’t get me wrong, consumers still value the professional experts. However, consumers take their advice and compare it against social media restaurant reviews when making a choice.
Take a look at mobile app Yelp and competitor Zomato. How many hundreds of thousands of reviews do they have combined? I’m pretty sure, collectively, they could make or break any establishment. Nevertheless, the impact on customer reviews could help your establishment reach its next milestone of stardom – wouldn’t you agree?
Ways to earn additional reviews
Another option to getting additional reviews would be to integrate a plugin like iRate for iOS to prompt the user to rate your restaurant or mobile app? Your pop up would direct the user to the site of your choice – like Yelp, OpenTable, Apple App Store or Google Play. If the process is streamlined and simple to navigate, the user will likely rate your product. If the process is cumbersome, your bounce rate will be very high, not likely to produce the results you are seeking.
How many times have you considered downloading an app to only find a few reviews? From my experience, if an app has only a few rating, I typically bail out of the app store – that is a topic for another post.
Another way to increase reviews would be through a loyalty program. The more reviews, the more rewards. Here are a few options: offer to share a link to your social network where everyone gets a 10% discount; offer to complete a survey to get a $25 gift certificate; run a promotion for every review posted, it will entitle you to a chance to win a free dinner. And my last recommendation, for every referral offered, the recipients receives a credit or award value. There are many options available to garnish reviews – just think outside the box.
In short, the goal is to get the message out – old school, word of mouth. Today, word of mouth is using the vehicle of social media or social proof. As Aileen Lee, a social blogger from Social Media Today said, “Think of it as building the foundation for massively scalable word-of-mouth.”. One example and the impact of “celebrity social proof” endorsement: Jessica Simpson and aesthetician Nerida Joy helped Beautymint attract 500,000 visitors on day one of its launch. Getting customer to review your product will only pay dividends in the long run while boosting your business reputation.
If you would like to read more about the “Impact of Responding to Reviews on Reputation and Revenue”. Read this article.
Here are a few highlights:
- Responding to reviews leads to increase in sales and revenue
- Failure to respond to all reviews are costly
- Don’t overdue responses to review – focus only on the negative
- While responding to negative reviews is critical, perhaps repeating simple thank you’s for positive reviews might be detrimental
What else can a mobile app do for my restaurant?
How much would you pay to have one of your slowest nights of the week become a high grossing night? I would utilize a common feature set that most mobile app developers can enable — push notification. I am pretty sure all of you well-educated smart phone users have received a push notification or two. If not, raise your hand! It looks like I don’t see any hands going up.
Why not plant the seed with your subscriber base about an upcoming promotion? Begin sending out push notification a few days ahead of time to inform your customers that you are offering a “Special” on a specific day. That is exactly what San Francisco based Tacolicious did, and the results,
“We could not be happier with customer response from the Tacolicious app…Margarita Monday happy hour push notification filled the house, and a 62% increase in mobile app orders, new customers through mobile phone recommendation”.
How is that for a significant ROI on push notification?
Here is another statistic. According to I’m in Marketer, “98% of all push notifications and text messages are opened, relevant, immediate, free, and are displayed at the right time”. Now go out there and start sending your push notifications to increase your foot traffic into your businesses.
Are you a visual person? Do you base your decisions upon the visual aspect – color, shape, or size of an item? Did you know that 62% of customers are less likely to stop into your restaurant if they can’t see your menu on their mobile — according to ConstantContact? As you are having your UI/UX designed, it is critical that your pictures are of professional quality, not pixelated. There are a number of apps specifically designed for taking photos of food, like Foodie. According the Line Corporation, “Its 24 types of food filters are sure to make foods such as “Meats,” “Sushi,” “Cakes,” and other cuisines look delicious. Since the app’s “best angle” feature lets the user know through color when the camera is positioned horizontally above the subject, it’s a snap to take trendy flat lays like you’d see in a gourmet magazine. Now there is no reason to have pictures that are of poor quality. Start shooting now! Engage your prospects and convert them to customers.
Now that you understand the some of the benefits of having a mobile app, we continue down the path of simplifying every step of the way. Next on the automation list is Click-to-Call.
Do you have a pencil? I need to write down this number
This is the last thing a mobile user want to think about. I need a piece of paper and pencil to write down a number. At this point, you just lost your opportunity to convert them into a customer. I wish I built automation into my app. If only……yes, if only I have a feature that allowed the feature click-to-dial. Using Cordova Call Number plugin by Github allows for instant dialing capability. You never know when you are going to have to anticipate a customer calling your restaurant because they have a question about your restaurant, location, special requests, or even wanting to plan an event during the holidays. Enabling this minor feature, a simple press of a button, goes a long way to simplification.
Should I invest in a coupon promotion to attract mobile users?
In a report published by Koupon Media title The State of the Coupon Industry points to a growing trend that:
- 43% of mobile users have used a mobile coupon
- 39% of customers spend more if they receive a personalized coupon
- 60% of customers would adopt more mobile payment if it offered coupons
Does this mean that coupons will not benefit the restaurant industry? Absolutely not. Furthermore, according to the same research, 65% of the consumers redeem the coupon within 5 minutes.
Are you aware of the first company to use coupons? Back in 1887 Coca-Cola used a paper coupon to offer a free glass of Coca-Cola to promote its brand.
Coke was selling for 5 cents a glass. An estimate of 8.5M people received a glass of coke or one-in-nine Americans had a glass. The days of clipping coupons may not be over, but promoting your brand utilizing digital media is sure one way to get coupons into the hands of your customers for coupon redemption, thus driving in more traffic into your establishment. Coupons work. It’s up to you to determine the right strategy. Here is one way you can start. Read “How to Develop a Successful Digital Coupon Campaign” by Convince and Convert.
One significant benefit to the mobile user Is not having to cut out the paper coupon. Just show the waiter the coupon, the waiter scans the barcode that tracks the person redeeming the coupon, and the restaurant uses the data to track the coupon campaign. A success in the making. You may not be as successful as Coca-Cola, but doing nothing creates no ROI. Would you agree?
Do you say keep coming with those referrals?
So far I have discussed creating rewards programs, requesting and prompting customers to write reviews and sharing reviews on social media, the next logical step is combining these tactics and creating a marketing campaign to boost those referrals. How do you do that? You create a referral program that rewards and offer an incentive to your patrons. If your customers experience was positive, they enjoyed the food, the service was outstanding, and the ambiance was pleasant, the likelihood of them returning is greater. Why not offer them an incentive to continue coming back – like a discount on their next visit. Train the server to ask questions. Is this your first time visiting? Were you referred by some one? If they were, get their contact information. Send them a “thank you” for referring a friend. This will entice the referring part to continue referring friends, family, and possibly co-workers.
Another approached to getting referrals is by developing a partnership with another local business. Establish a program that benefits both parties. For each referral received, the referring business would receive a gift certificate redeemable for a dinner for two for a predefined value.
I love statistics. According to Referrizer, only 83% of your patrons would refer your restaurant to their friends, but only 29% actually do. Why is that? Wouldn’t you think those figures would be higher? We know that if a person has a bad experience they are likely to tell between 9-15 people of their poor experience.
What do you do to increase the referral rate? In today’s world people are lazy. If you ask for a favor, like a referral, you better offer an incentive. Without an incentive, a positive reinforcement, the likelihood of your patron sending out a SMS messages to their social circle or on social media will fall into that 29%. However, the ROI on a 10% or 20% gift certificate could provide very rewarding.
Are referrals as impactful as you would think? According to the poll conducted by Harris Poll of behalf of Ambassador, referrals are more influential than We think:
And the right Incentive Makes a World of Difference
The last section of “Why your Restaurant Needs a Mobile App” is all about enticing the mobile user to make a reservation. How? You add high quality photo’s within your mobile app, but you said earlier “take high quality images of your food” – correct! Those are menu selection items. Enticing a user is to create a story by using a picture. Its becomes integrated throughout the UI/UX. Design. As the user enjoys the mobile experience (UX), the user is presented with photos of selected items (e.g. filet of salmon, a meaty filet, shrimp cocktail, or a cobb salad). Here you are subconsciously wetting their appetite, prompting desire, preparing them to click-to-call for a reservation or enabling them to schedule a reservation online.
As I review the restaurant industry mobile application, I notice another common thread. Each company uses a different approach to their photo selection.
In closing, the question you have to ask yourself. Would a mobile application benefit my company? Can I justify the cost? Can I calculate the ROI? How soon will my balance sheet be affected by the positive growth? Will I increase customer acquisition? What happens if I do nothing? Can doing nothing be measured? Should I cater to the millennials? Are these statistics realistic and does the millennials have the purchasing power of $170 Billion dollars?
One last statistic: Did you know that last year 95% of independent restaurants did not have a mobile site and only 16% of restaurants have a mobile app? Lets say, this year only, that 75% of restaurants still don’t have a mobile food service app. And you decide this year you are going to invest in to a mobile solution, do you realize you would be part of the 25% of business owners who realize the business benefit, the positive image your business would have on millennials, and provide a competitive advantage over other local restaurants? Is this a position you would like to be in?
Lets Examine the Financial Impact of a 10% Growth
If you were able to increase restaurant receipts 10% daily, would it be worth the investment? Sample equation: daily receipts: $10,000, multiply by 10% = $1,000, multiply by 7 days = $7,000, assume you are open 7 days a week. $7,000 (week) x 52 weeks = $364,000 additional earned revenue by having a mobile app. I believe the $10,000 in daily receipts are a very conservative number for restaurants in any metropolitan city like Chicago or NYC — adjust accordingly to your geographical area.
If you are interested in discussing the idea of having a mobile application built for your restaurant or stadium, I would be happy to discuss your idea. I can be reached at 630-375-9700 or via my Twitter account: @jeffreybuskey or be found on LinkedIn.
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