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Today, as CEO of Foodline.com, Lightfoot aims to change that. Foodline is a leader among a handful of companies that help restaurant owners use the Internet to track their customers' tastes -- and decide which diners will yield fatter profits (see BW Online, Mar. 30, 2000, "Why the Chef May Be Snooping as You Sup"). Armed with data showing who the heavy eaters and drinkers are, they can decide which customers they want to come back and then direct staff to dish out attentive smiles, small favors, and marketing pitches to them. "This isn't unlike what airlines and hotels have been doing for 10 years," Lightfoot says. Restaurants are finally catching up. Foodline for now is an online-reservations service that replaces the big datebook, pencil, and lots of erasers at the reception desk. But that's only the beginning. By yearend, Lightfoot's software will allow restaurants to link the e-reservations to their cash registers. Then, owners will know not only who comes in most often but what they like to eat and how much they spend as well. "This is a great way to store a lot of information and access it table-side," says John Cantwell, general manager of Match Uptown, a popular Manhattan eatery that uses Foodline's system. PREFERRED CUSTOMERS. For believers like Cantwell, Foodline is more than a data-cruncher. It's a godsend. For instance, if Cantwell knows that a generous customer is unusually demanding, he might assign an especially attentive waiter to serve him and ward off potential disasters. Or say someone calls asking for an 8 p.m. reservation on a Saturday evening two weeks hence -- when the restaurant is likely to be full. The manager could look at the customer's previous checks. If it's someone who dropped only $30 on dinner for two, he might hold the table in the hope that a big spender who recently sprang for a $200 bottle of wine might stop by. When not fussing with tables, restaurateurs can use the system to target their marketing. By tracking customer visits, they might notice that a one-time regular has become less so. That could prompt a thoughtful e-mail to ask if everything is O.K., or perhaps whether the service or the food have offended or disappointed the customer. Others send messages offering birthday freebies or discounts to customers willing to come in early or late -- times when restaurants typically have open tables. The system is also relieving the stress on hard-working owners. With Foodline, they can share the customer quirks they've learned over years of service with newer, less-discerning employees. "I've really been a prisoner of the restaurant, but now my hostess can also give personalized service," says Donatella Arpia, a Foodline customer and owner of Bellini restaurant in Manhattan. DATA TIPS. What's Foodline's meal ticket? It charges restaurants a fee of $200 per month for online reservations, plus $1 per person in each party. The restaurant receives a terminal with a high-speed connection to the Net. Online bookings pop up automatically, while staffers enter phone or walk-in reservations into the computer. With 300 customers nationwide so far, Foodline is far short of breaking even, and Lightfoot declines to say when the company might turn a profit. The online-reservation numbers are still small -- most restaurants book fewer than a dozen tables a month via the Net. But restaurant owners say the systems are worth the fees just for the ability to profile their customers. Reservations made online come in with at least an e-mail address and often a phone number attached. Hostesses and waiters enter other information from business cards they collect, and add special requests about birthdays or anniversaries, or notes about diners' favorite dishes and preferred tables. Lightfoot founded Foodline two years ago, after he quit his job as an attorney at Cadwaller, Wickerson and Taft, a big Manhattan law firm. He and his friend Bob Thomas -- the chef at Shelby, the Upper East Side restaurant where Lightfoot tended bar during law school -- came up with the idea while reminiscing about their days in the food-service business. The two raised about $1 million in early financing from friends, family, and angel investors. Last fall, they added $8 million from Ticketmaster Online/Citysearch, American Express, and Zagat Restaurant Surveys. Lightfoot says he hopes to raise several times that in a third round of financing that should close by the end of the summer. He plans to use the new cash to double his sales team to 100 and, he hopes, expand his reach to 50,000 high-end eateries within five years. HIGH-END RESISTANCE. He's not the only one chasing the market. At least a half-dozen competitors already offer online reservations. The leaders so far have been OpenTable.com, with 700 restaurants signed up, and Foodline. Analysts say the contest is too early to call. And with so many players, there's likely to be consolidation soon, says Mark D. Kalinowski, a restaurant analyst with Salomon Smith Barney. "It's a fairly crowded market now, but Foodline and OpenTable have distinguished themselves from the others," with aggressive selling and good management, he says. Both players may run into resistance, even at the high end of the market. Some restaurants that pride themselves on top-notch customer service prefer to do it themselves, thank you. Sirio Maccioni, owner of New York's tony Le Cirque restaurant, says he answers the phone most of the day by himself so he can get to know diners even before they walk in the door. Doing it electronically would take away from the ambience that makes his restaurant special. "People who come here expect personal service, so it would be silly to use a computer," he says. Still, ever more restaurateurs are likely to use customer profiles to make service more personal. "Restaurants that build customer intimacy offer a better experience," says Arlene Spiegel, director of the food and beverage practice at consultants PricewaterhouseCoopers. And it may well help restaurateurs discover new ways to plump profits. Rocks covers technology for Business Week in New York |
