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Business Week e.biz -- Strategies
The Net is helping restaurateurs decide who gets a corner table on Saturday night
As a customer strolls into Manhattan's elegant Bellini restaurant, owner Donatella Arpia looks up from her reservations desk to greet him. Then, glancing down at a computer screen, she notes the highlight over his name. "Purple means he's a VIP,"she says as the customer is seated. "When he comes in I know to pour on the charm."
Forget the little black book hidden in the vest pocket of a guy in a tuxedo. Thanks to the Internet, today's restaurant owners are beginning to get a better sense of who their customers are--and exactly which ones are buttering the house's bread. More than 1,000 restaurateurs nationwide have signed up with services such as New York-based Foodline.com Inc. and San Francisco's OpenTable.com Inc. to offer online reservations and--more important--develop profiles of their clients.
The payoff? In the dog-eat-dog rivalry for customer's stomachs, such data can help track diners' likes and dislikes to provide more personalized service and targeted marketing. Sure, diners go out for the food and atmosphere. But it's often the smile, personal greeting, or free dessert from the maitre d' that keeps customers coming back for more. "People measure value by the experience they've had," says Arlene Spiegel, a food and beverage consultant at PricewaterhouseCoopers. Besides, why bring a free dessert if Mr. Big is allergic to chocolate?
At Bellini, Arpia enters phone reservations or walk-ins into her computer system, while online bookings pop up automatically. Any tidbits she picks up--phone numbers, say, or birthdays, or favorite dishes--are noted as well. One client tagged "purple" is a friend of another VIP, with a note to offer him a free appetizer. Another regular customer--highlighted in orange, one notch below purple--doesn't like corner tables. In the file of a third, Arpia has written, "Needs attention." She hasn't spent enough time chatting him up recently. "Extra attention makes a world of difference," says Arpia, a 28-year-old former attorney who quit practicing law two-and-a-half-years ago to open her restaurant.
That's not unlike what a good maitre d' does with brain power, pen, and paper. What the Net does is make sure good intentions are followed up. And, by yearend, reservation systems will be linked to the sales data in cash registers, which in most U.S. restaurants have long been computerized. With that link, restaurateurs will know who comes in most often and who spends the most. Say someone asks for an 8 p.m. reservation on a Saturday. The manager could instantly see if the customer is a skinflint. If so, no luck. The table might instead be held for a big spender who bought a $200 bottle of wine recently.
Is that fair? Maybe not, but get used to it. Everyone from supermarkets to airlines is gathering data to find their most profitable customers. If it leaves everyone else with table scraps, hey, that's what Mickey D's is for. "If I spend more at the restaurant, I should get a better table," says Phil Hoffman, a marketing exec who eats at Bellini weekly.
That's the kind of attitude that companies selling the reservation systems are banking on. Foodline, OpenTable, and a half-dozen or so smaller outfits offering such services believe restaurants and customers alike will benefit from programs similar to frequent-flier miles and yield management--the demand-based pricing common in the airline industry. And it doesn't take a lot of dough. Foodline rents a terminal with a high-speed connection to the Net as well as database software for $200 per month, and reservations cost restaurants $1 per person. OpenTable charges about half that. While the software runs on the Net, databases are built up and stored in the computer system at each restaurant.
So far, online reservations aren't exactly being gobbled up: Bellini only books about a dozen tables per month via the Net. Still, restaurant owners say the systems are worth the fees just for the ability to profile their customers. "This lets us give that little extra touch and keeps people coming back," says George Knowles, manager of San Francisco's Campton Place Restaurant, which uses OpenTable.
As the trend grows, expect more restaurants to use profiling. If you've got money to burn, that's great. If not, take heart: The maitre d' may not be shunting you off to the table next to the kitchen door just because he doesn't like your suit. Soon, you could end up in restaurant Siberia because he knows you don't spend enough to matter.For a look at Foodline.com, see the July 18 Company Closeup on ebiz.businessweek.comBy David RocksReturn to top