The restaurant industry has a listening problem. Tech fixes it.
You’re going out for dinner. You pick up your smartphone and book a table at a new restaurant, a few hours later you do the same to hail a cab. You stop off at a bar and use another app to pay for your drink before it’s even arrived. This is nearly the norm for most city-living, tech savvy consumers.
But at the restaurant, it starts to go wrong. The menu is long, descriptions short and following a brief conversation in which you might ask what’s good, you place your bet with the waiter and hope for the best. If you love your food, you may upload shots of your dishes to instagram, with plenty of filters and relatively little feedback on the food itself.
At the end of the evening you leave feeling a little flat. The soup was bland, sea bass a little overcooked, but you’ll admit your dessert was some kind of chocolate laced heaven. You are asked that dreaded question “how was your food?” and you lazily pick the safe option: “fine”.
Unfortunately, even if you are one of relatively few people that will leave a review on Tripadvisor, who genuinely fall into either camp of love or hate, the chefs and owners of this restaurant will never know how you truly felt about the food that evening and so, it’s likely it won’t improve.
That’s because, despite the radical shifts in how consumers are using technology to share information about their lives and engage with brands, the restaurant industry has been slow on the uptake. It has forgotten to listen.
The feedback loop is broken
This is a major problem. This single event of a nonplussed customer never to return has a direct hit on profits restaurants make more than any other. Simply put, increasing customer retention rates by 5% can increase profits by up to 95%, and food, above location or atmosphere, is the most significant influence on customer retention.
So restaurants are missing a trick by not tapping into the gold-mine of data available to them. As business people and as consumers we feel today more than ever, that we have the right to be heard. We know and understand the tradeoff between sharing our information and getting a better deal in the end so we are happy to publish, moan and celebrate online.
Current feedback systems are flawed and outdated. TripAdvisor has more than 150 million reviews and opinions on its site. Yelp has more than 57 million. Mired in controversy, they are still influential to an extent (57% of diners rely on them before setting foot in a restaurant) but even if the reviews are not fake (Yelp have estimated a quarter of their reviews are false) they are crude, unspecific and inaccurate. Crucially, they don’t help consumers or businesses engage in a meaningful way.
So to date, restaurants have failed to access the wealth of information that their guests want to share because they do not know how to listen. Follow up surveys and requests for feedback are commonplace but they do not work and a recent Deloitte study showed that over half customers do not want to be contacted in this way. That is not only a waste of resource, it is actually damaging to the relationship.
We are seeing the impact in the sector where even the most established brands in the casual restaurant-dining sector can fall. Only last week Frankie & Benny's announced they were closing down due to 'unsuccessful menu development'.
As part of my own personal journey to look how best to fix this problem I have worked in every aspect of a restaurant's service in recent months. Whilst everyone is completely aligned to serving the best food they can - the dialogue between the people at the dinner table, the waiter and the chef in the kitchen is broken. And that is where the gold-dust is - in the insights, knowledge and data that we can gather from simply listening.
We need a new model, based on real data and genuine insights, which actually works to improve the relationship between a diner and restaurant.
But we also know that listening isn’t enough. ‘Big data’, and small data alike, is largely useless unless analysed and turned into action. This new age of consumers, desperate to share their opinions, should be seen as the greatest opportunity of the moment for the restaurant industry, but they must learn to listen and respond.
At Yumpingo, we have built a platform that allows this - where customers can share real-time feedback on every part of a meal. This is hugely valuable for the restaurant who can not only enter into that conversation to be as helpful as possible (sharing insights and feedback from the kitchen) but to learn from mistakes and make rapid improvements on products directly related to customer insights. We call this lean menu development. If you were ever a fan of waterfall development in the software industry, it is probably not for you.
It’s also a game changer for the diner, because the more a restaurant understands about what they are thinking and feeling, the better food they can deliver and the better service they can give.
The most important ingredient to ensuring a happy returning customer is the customer themselves. Restaurants should have always listened, and the good ones do, but technology has the potential to fix the broken feedback loop, and improve the casual dining experience beyond recognition.
We would love to hear your comments and feedback on what we are building. You can reach me at firstname.lastname@example.org or follow us on twitter @yumpingo.