The Next Generation of Restaurant Customer Interaction. Strategies and Technologies for Meeting the Evolving Needs of Restaurant Guests

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1 The Next Generation of Restaurant Customer Interaction Strategies and Technologies for Meeting the Evolving Needs of Restaurant Guests

2 The Next Generation of Restaurant Customer Interaction Strategies and Technologies for Meeting the Evolving Needs of Restaurant Guests Industry analysts agree: the U.S. restaurant sector is undergoing change of an unprecedented degree and pace. Demographic shifts have seen an industry fueled for decades by revenues from 18 to 34-year-olds tilt back toward an even distribution of diners above and below age 50. Sites like Yelp and Urbanspoon have turned every diner into a restaurant critic, and every table into a potential Net Promoter. Mobile technology has transformed evening-out planning into an on-the-go exercise. From pop-up restaurants to the fast-casualization of increasing numbers of cuisine options to the role of social media in the dining experience, the industry is undergoing nothing short of a full-scale revolution. Restaurant guests are becoming more mobile, more social, more empowered, and more demanding at the same time and the combination of these trends is transforming what it means to operate a restaurant chain. Mobile consumers want more than food on the go they want information accessibility from their handsets, too, and mobile data is becoming an increasingly important tool in restaurant selection. One in every eight pageviews is seen on a mobile device, according to ComScore data from December of But within the restaurant industry, fully 30 percent of all restaurant searches take place on a mobile device. Moreover, 70 percent of mobile searchers act within an hour of their search, and that figure is higher than 80 percent for restaurant searches. The message is clear: restaurants that are mobile Internet-ready, with easy-to-use push-to-talk capability, mobile reservations and takeout ordering services, and rapid response capabilities like SMS messaging when tables are available are poised to outperform their less mobile-savvy competitors in terms of revenue, margin, and guest loyalty. Multiple Aspects, One Goal Restaurant guests are becoming more mobile, more social, more empowered, and more demanding at the same time and the combination of these trends is transforming what it means to operate a restaurant chain. Restaurant customers rely more heavily on social media, too. Nearly half (49 percent) of consumers use social media to research restaurants, according to the National Restaurant Association, and that figure, too, is growing quickly. So, too, are the number and variety of sites and apps that assist restaurant guests in accessing social information on restaurants. Since Yelp launched in 2004, new competitors like Urbanspoon and Dine.com have sprung up and are attracting millions of users. The net result is that a customer s experience with a restaurant is propagating outward in the social mediaverse in real time so a customer choosing to walk in the door of a particular restaurant may even be making that decision based on input from a customer who just walked out after a meal. When customers cannot easily reach restaurants to schedule reservations or place takeout orders, they are increasingly unwilling to wait, especially when competing restaurants offer more convenience. 2

3 The rapid growth of fast-casual options in formats as diverse as sushi, Greek fare, Korean barbecue, hot dogs, and taquerias has produced a generation of consumers empowered by unprecedented choice. Where consumers even ten years ago had limited options for a hamburger for lunch, today s restaurant guest can choose from Five Guys, Smashburger, Burger21, and a host of local and regional options. That has demanded more in terms of competitive differentiation from everyone serving in each format, since the alternative is perceptual gridlock among potential diners. As more restaurants push the same general service package fresh ingredients, cooked on-site, modern urban décor the need for a defensible source of competitive differentiation becomes even more significant. While customer service has traditionally formed the basis of that differentiated offering, the new guest experience begins with the first contact made with the restaurant which is often made by mobile call, text, or app interaction. Centralizing that contact and making it consistent across channels is the first important step in achieving that level of differentiation. The need for competitive differentiation is becoming critical, too, based on the fact that the impact of the Great Recession has made guests more demanding as well. While more Americans are dining out, recent Harris Poll data shows that consumers have changed their demand pattern for restaurant outings, opting for lower-cost options, seeking out special offers, and demanding more of the restaurant experience in exchange for their hard-earned pay. In the wake of the Great Recession, guests are consolidating their restaurant outings in two categories: local casual dining restaurants and casual-dining chains. These formats saw the smallest Harris Poll figures for plan to eat out less frequently (20 percent for local casual-dining locations and 24 percent for casual-dining chains) and the largest figures for plan to eat out more frequently (14 percent and 11 percent, respectively). With local restaurants ramping up their efforts to compete with chains on service, value, and community intimacy, chains have their work cut out for them in closing the purchasing intent gap with increasingly choosy diners. The new guest experience begins with the first contact made with the restaurant. The intersection of these trends mobility, social media, empowerment, and demand has produced a competitive environment the likes of which the restaurant sector has never seen before. That environment is creating parallel challenges in the form of multichannel mobile interaction, contact centralization, data aggregation, and cost reduction in the interaction function. By addressing each of these challenges head-on, restaurant chains are becoming more agile, engaging, and responsive guest experience providers and in doing so, positioning themselves to attract more loyal guests, maximize the revenue and margin potential of every meal, and create sustainable competitive differentiation. A transformational era requires transformational thinking and tools. The era of incremental improvement in the restaurant sector is over. The level of promotional and customer interaction activity in the industry is such that the overall volume for the consumer is very high, and small improvements and incremental changes tend to get lost in the noise. In addition, most of the efficiency gains possible through such changes have already been realized across the highlycompetitive restaurant industry. Years of process optimization have maximized the yield of existing chain restaurant operation models, and the industry is seeing diminishing returns from continued efforts to fine-tune those models. 3

4 But perhaps the most important reason that the restaurant sector is entering a transformational era is the fact that the tools are finally ready to support transformational strategy. Forward-thinking restaurant executives have seen the potential in mobile Internet-based interaction services, contact centralization, data aggregation, and cost reduction for some time. Yet supporting these tasks with easyto-use, commercial off-the-shelf (COTS) software has been an insurmountable challenge. Individual software components have promised to address one factor or another, but combining them into a cohesive whole has cost more in time and dollar expenditures than organizations have gained back. For the first time, one restaurant contact management solution addresses all four of these core challenges in a single, unified environment. eloyalty s icstore part of the broader icapplications suite of customer engagement products provides a complete solution for integrating restaurant chain locations, district management offices, data warehouses, and contact centers, effectively providing a single interface for the customer across all contact channels. With icstore, your organization can improve per-location revenue and turnover rate, reduce lost guest revenues, manage smart device interactions, and cut operational costs with measurable outcomes and proven ROI. eloyalty s icstore application tracks customer interactions across multiple channels, from telephone to SMS to app interaction to social CRM, and enables seamless interaction handoff from channel to channel as necessary. Interaction management across multiple smart devices, including smartphones and tablets, is built into the core icstore functionality. eloyalty s icstore technology backplane docks easily with standard mobile app development APIs, making it easy to integrate icstore s interaction routing and reporting capabilities into ios, Android, and Windows Mobile applications. From app-based reservations and takeout ordering to social media integration, icstore makes it simple to offer a robust and appealing mobile presence to prospective guests. While more Americans are dining out, recent Harris Poll data shows that consumers have changed their demand pattern for restaurant outings. icstore provides contact integration across multiple organizational areas, from restaurant locations to centralized or cloud contact centers to online interaction tools. With icstore, customers attempting to contact busy local restaurants are routed to the centralized contact center after a set number of telephone rings. icstore can seamlessly integrate the restaurant/contact center experience pulling up restaurant reservation data or specific takeout menu information, along with any local promotions or special offers, leaving the customer with the perception that he or she has been speaking with the restaurant staff the entire time. Reservation or order messaging outward from the centralized contact center to the restaurant is equally seamless, and can be designed to conform to any restaurant FOH system. By centralizing the data generated by guest interactions, icstore aggregates reporting data across all sites and interaction channels, providing a comprehensive view of guest interaction in a single reporting environment. That, in turn, can provide insights into lost turnover rate, revenue and cost control opportunities. For example, icstore reporting was instrumental in identifying an operational gap in takeout order management for one client that resulted in over $1 million in annual revenue recovery, simply by ensuring that every takeout order was answered promptly and managed efficiently. 4

5 eloyalty s icstore technology creates cost savings at every stage in the guest interaction process, from the greeting stand to the SIP trunk to the agent seat and everywhere in between. For restaurant chains seeking to smooth the expense curve of technology adoption, eloyalty offers both cloud and premise-based solutions, with monthly (OpEx) or up-front (CapEx) purchase options. Capabilities built for restaurant reservation and order systems can also be cost-efficiently expanded to cover a wider array of corporate customer interaction tasks, too, making icstore an investment with broader long-term dividends. Brought together in a single customer-facing environment, these four capabilities drive guest loyalty and Net Promoter status, improve profitability, differentiate the dining experience, and increase restaurant brand persistence. Each is vital for success as the restaurant industry undergoes its latest and most dramatic transformation. Transform your own multichannel customer management function today, with proven technologies from eloyalty and broader customer experience design, outsourcing, and analytics capabilities from TeleTech. To learn more about eloyalty s capabilities, or to discuss a customized solution for you, contact us at or n About eloyalty eloyalty LLC, a wholly-owned subsidiary of TeleTech Holdings, Inc., is recognized industry-wide for 20 years of technical expertise in transforming customer management environments for a wide variety of multinational clients. eloyalty has unparalleled experience and qualifications with on-premise multichannel contact center solutions, as well as virtual store and branch integration. Enterprises that require advanced voice and data technologies integrated with customer-focused business design turn to eloyalty for consulting services, systems integration, application development, monitoring, and managed services. Drawing on relationships with industry leaders like Cisco Systems, eloyalty blends their services with industry-leading hardware and software applications to deliver best-inclass solutions. With icstore, your organization can achieve measurable outcomes and proven ROI. Net Promoter is a registered trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld. icapplication and icstore are trademarks of eloyalty, a TeleTech Company. Cisco Systems is a registered trademark of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco s trademarks can be found at 5

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