The Pros and Cons of Using an Online Reservation System

Michael Maxwell – Partner, Blue Orbit Restaurant Consulting

 

 

Traditionally the rule has been, upscale and fine dining restaurants take reservations and chains and casual dining do not.  Due to evolution, all humans are now born with a smart phone in their hand, so restaurant reservations automatically evolved to online apps to accommodate that new “biology.” But, in the last few years, everything has changed.

No longer can you define a restaurant by tablecloth or no tablecloth, chef or no chef.  The lines are blurred and things like “chef-driven, but order from the counter” make it impossible to lump restaurants into categories anymore.  Add to that a multitude of options for online reservations, and you leave restaurant owners and operators with a tough decision answering the ‘should I even take reservations, much less use an online system?” question.

I always like to start with the positive.

So, here are some advantages of using an online reservation system for your restaurant:

  • Customer Data. Online reservations gather information about your guests and give you the option to sort and digest it in a number of different reports.  You can glean insights and start to answer important questions like:
    • How often do your guests dine with you?
    • Who else do they dine with regularly?
    • Are they local or tourists, where do they come from?
    • What do they normally order in your restaurant?
    • How much money do they spend per visit?
    • When are the special occasions in their life like birthdays and anniversaries?
    • What did they like and dislike about dining with you?
  • Free Marketing. Most online platforms allow you to market things like holiday menus, catering, and happy hour specials.  They also group you into guest voted categories like best patio and best place for group dining.  These platforms often do regular email blasts and alerts to their data base about these specials and reminding them to make holiday reservations early. They can drive people who were not planning on dining out to your doors by simply reminding them that they should dine out.
  • Knowing What to Plan For. What is the restaurant manager’s favorite question?  “Mirror, Mirror, on the wall, will I be busy tonight?” Online reservations allow you to know days in advance what a meal period will be like.  Very rarely do days fill up at the last minute, and if they do start filling up quickly, it should alert you to investigate why. Perhaps you forgot that it is a Monday holiday, or maybe the Pharmacists Convention that’s in town somehow skipped your radar.
  • Open 24/7. With online reservations there is always someone there to take your reservation. You are never put on hold and never driven to another restaurant simply because you couldn’t get in touch with someone.  This 24-hour digital reservationist also makes daily operations easier for your staff.  They are not tied up at the phone taking reservations and answering questions when they should be welcoming and seating guests.

And now for the negative; here are some potential disadvantages for using an online reservation system for your restaurant:

  • Money. Online reservations cost the owner money.  There is typically a one-time set up fee, a monthly charge and sometimes a charge per reservation.  We are talking thousands of dollars yearly. Sometimes there is an additional charge for phone apps, special placement in marketing, menu visibility, etc.
  • Loyalty to Platform.  Most online services run promotions to drive reservations.  Many offer points for dining at restaurants during certain time periods or on certain days of the week.  At first glance this seems like a win for the restaurant, giving them the ability to help drive people through their doors during down times.  But in the long run it operates much like couponing. It does not build loyalty to your restaurant but instead loyalty to the next deal, wherever that may be.
  • Empty Seats.  The entire world wants to dine between 7 and 8.  These reservations fill up quickly.  Few guests know that restaurants usually hold a few tables during this time for walk-ins, or that people no show, or that there is seating available at the bar. If a restaurateur can talk to you, they can lead you to other options that are equally appealing and sometimes they can see a space to “squeeze” you in.  If you rely on an online system, it is easy to give up before you even try. It is also crucial for managers to update reservation sheets regularly.  Early tables may turn faster in the summer and slower in the winter.  Valentine’s Day might move twice as fast as Thanksgiving Day.  And this year’s patterns may not match last year’s patterns. Poorly crafted reservation sheets also mean empty seats.
  • Where’s the Buzz?  Lines can be a good thing.  They send the message that there is something special about that place. A well-trained staff can keep people happy and excited while they are waiting, and it almost always increases alcohol sales.  Whether they are sitting in the bar or waiting in the lobby there is always a way to get a drink into someone’s hand.

All the above pros and cons considered, I believe the strongest factor dictating the use of online reservations is your neighborhood.  If everyone in your neighborhood takes reservations, you probably should to.  If it is a mixed neighborhood, weigh out the pros and cons and make the decision best for your restaurant business.

 

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