Restaurants To Manage Wait Times To Improve Customer Service
June 02 2011 - 10:03AM
Dow Jones News
Restaurant operators are investing in technology to better
estimate wait times and improve the process of alerting guests when
their tables are ready, hoping to keep patrons from fleeing at the
site of long lines.
With a constant stream of chains to choose from, competition in
the casual dining sector is fierce. Some major restaurant operators
could be losing up to $1 million in sales each week as guests leave
because of wait-time frustrations. When it comes to investing in
new technology, wait management has become a top priority for
chains.
Red Robin Gourmet Burgers Inc. (RRGB) is trying out a new system
of texting guests when their table is ready at one of its
mall-based locations. The move will allow people to shop, or simply
browse, while they're waiting to be seated. The chain is only in
the very early stages of testing it, a spokesman said.
Table Top Media's Chief Executive Jack Baum, a restaurant
industry veteran turned technology provider, says restaurants know
they're losing guests to long lines on a busy night, but it's not
just a one-time effect. If regular patrons have a bad wait
experience once, it will likely turn them away for good. "People
will come to a casual dining restaurant more frequently if they
know they can get in and out quicker," he said.
The capital investment for a chain is relatively small,
requiring a few thousand dollars for hardware such as pagers on a
per restaurant basis. Technology providers are also now offering
some products as software on a monthly subscription basis, making
them even more affordable.
The National Restaurant Association estimates that 16% of
restaurant businesses use technology for table management, and 21%
have increased their technology budgets this year over last
year.
Heartland Payment Systems Inc.'s (HPY) Freshtxt provides text
messaging services that integrate with restaurants' current pager
systems to allow guests to roam area shopping while waiting.
Heartland's Chief Information Officer Steve Elefant said texting
systems also encourage increased frequency by allowing restaurants
to contact customers with promotional deals to bring them back
again. "You'd be surprised how popular the outbound marketing
aspect is," Elefant said. "It's pushing restaurants to take that
step to invest in the customer service technology."
Built on the premise of Southern hospitality, Texas Roadhouse
Inc. (TXRH) is in the process of reverting back to the pager
system, after switching to a cheaper alternative in which guests
are given a number and watch for their number to light up on a
larger screen in the waiting area.
"People were confined to waiting in one area inside, so they
were blocking the door," said Travis Doster, company spokesman.
"And a lot of the time, people couldn't see the screen, and we'd
have to announce their numbers on the loud speaker, and that takes
away from the atmosphere. It just wasn't worth it."
Texas Roadhouse estimates it turns away an average of 100
customers at each restaurant per weekend night due to long
waits.
A big cost with the vibrating, light-up pagers that are often
used at casual dining chains is replacing the pagers when people
walk off with them. To help combat the issue this time around,
Texas Roadhouse is trying out drop boxes for the pagers outside the
restaurants.
Darden Restaurants Inc. (DRI) recently rolled out a new table
management system at its Olive Garden chain to better detect
wait-time estimations. A spokesman for the company said the new
system has made a noticeable difference in customer
satisfaction.
Mark Kalinowski, restaurant analyst at Janney Capital Markets,
said wait time management is a critical area for restaurants.
"It can be very frustrating when you're told the wrong wait
time, and you're stuck there," Kalinowski said. "So, if restaurants
can help make that process better, that is probably a better
investment," than some of the other swanky technology out there,
like tablet ordering systems at tables.
With the recession and its aftermath leaving restaurants
strapped for cash, investments in the latest technology have been
somewhat on hold.
Hudson Riehle, senior vice president of research for the
National Restaurant Association, says tech spending is starting to
pick up again.
"The restaurant industry has typically been slow to invest in
technology because it's not a high-margin industry. Casual dining,
specifically, has lagged behind quick-service restaurants," Riehle
said. "Casual dining concepts are now implementing more technology
to enhance customer service."
Dale Carr, technology tycoon and chief executive officer of
LeadBolt, says the drawback is the risk that always comes with
technological advancements: Potential software errors crippling a
busy restaurant.
-By Annie Gasparro, Dow Jones Newswires; 212-416-2244;
annie.gasparro@dowjones.com
Texas Roadhouse (NASDAQ:TXRH)
Historical Stock Chart
From Apr 2024 to May 2024
Texas Roadhouse (NASDAQ:TXRH)
Historical Stock Chart
From May 2023 to May 2024