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Out of the Back Office
As operatiors become more sophisticated, they're demanding better reporting enterprise-wide
Not too long ago, the back office was where restaurant general managers went to disappear. In the small, cramped office, GMs slaved over their PCs accessing labor management, inventory, accounting and other so-called back-office applications.
For many GMs at multi-unit restaurant operations (though certainly not all), those days are gone for good. Now, with add-on modules to point-of-sale systems, wireless capabilities and sleek enterprise applications, restaurant managers are spending less time in the back room and more time with employees and guests.
Not only are these applications more flexible, but they are also more powerful as well. Tied to the point-of-sale, back-office apps are now supplying enterprise-level dataoften in real timeto managers in the restaurant or at the corporate headquarters. Getting actionable data on sales, food costs and labor expenditures allows restaurants to increase efficiency and improve profitability.
Modular design
Nearly every major point-of-sale software company now offers back-office modules as add-ons to the POS system. While at one time these modules may have been afterthoughts to the POS system itself, now these back-office systems have become extremely robust and functional.
One of the primary benefits of an add-on back-office module is its seamless integration with the point of sale. Increasingly, restaurant technologists point to integration issues as a primary technology concern.
At Boddie Noell, for example, having add-on modules was a significant factor in selecting its Progressive Software IRIS point of sale system (www.progressivesoftware.com). At least 40 percent of the value of these systems, explains Clint Cooke, director of store systems for the Hardees franchise group, comes from all the extra service we receive after purchasing the basic software and hardware.
Another key factor for selecting an add-on module is the ease of training. That is what spurred Firehouse Subs to move to a Radiant Systems (www.radiantsystems.com) POS and back-office. Since the systems are fully integrated, POS and back-office training reinforce each other.
Roll outs may also be simplified via the modular route. When Fuller Group selected the Micros (www.micros.com) RES 3000 suite of POS and back-office applications, notes Ian Campbell, assistant VP finance, it was the training and ease of installation that sealed the deal. It allows our restaurant operators to manage their own systems more independently now, he explains. We dont need as many staff people to handle IT and support issues, which helps us run our business more efficiently.
Best of breed
For many restaurant companies deciding on best of breed versus POS modules involves a careful calculus based on how each operation uses the systems specific functionality. During the a roundtable discussion of POS systems held earlier this year the topic of back-office systems revealed widely varying opinions.
I prefer integration in critical systems, explains Henry Hirschel, director of IT at Jamba Juice. These are systems that are required in the store such as time and attendance and labor scheduling. Food cost and inventory systems are better handled through Web-based enterprise level solution.
Jim Lux, vice president of IT at Bertuccis, had a somewhat different approach. Inventory or HRIS dont really belong in the POS, he insisted, but cash management does. Bertuccis believes in getting everything out of the POS that is possible, provided it is appropriate. The division between front of house and back-office applications has always been clear.
For Jim Gray, director of information systems at OCharleys, the choice is even clearer. For many restaurant companies managing multiple systems and multiple franchise groups, freedom is the key. We want our back-office system to be independent of
the point-of-sale, he noted, thus we are free to use multiple POS versions and vendors.
As a number of software vendors have noted, the pain and cost of changing core systems like POS, often lead operators toward best-of-breed solutions that connect with multiple systems.
A .net world
Selecting a best-of-breed back-office solution does not necessarily preclude seamless integration. The move by a few software companies toward industry standards in key systems is slowly moving the restaurant world toward tighter integration. In the back-office world, at least, Microsofts .Net has clearly become the most talked about standard, although most back-office companies have not yet released a .Net product. Currently MenuLinks BOA.net (www.menulink.net) is the only major back-office software that is completely built based on .Net.
The reason most software companies are taking a slow approach to .Net is that demand from operators has been minimal. Still, a number of back-office software companies are moving to .Net not because operators are demanding it, but rather as one back-office software vendor put it, We see it as the solution to key business problems.
George Popson, senior director of IT for la Madeleine, agrees with that conclusion. la Madeleine, which considers itself a Microsoft shop, ultimately selected Eatec (www.eatec.com) for capabilities, not its architecture. For Popson, like many restaurant CIOs selecting a back-office application is all about finding the right tools.
We keep a small IT staff, explains George Popson, so its important to have the right tools that blend into the systems we use.
Fortunately for operators, those tools are readily available. Moving to a .Net framework, one software vendor explained, will not change the look and feel of the back-office application. They wont even notice the difference, he insisted. What they will notice is a continued movement toward tighter integration with key systems, simplified user interfaces and less time in the back office.
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8 Tips to Loyalty Success
CRM technology builds profitable relationships
Afterglow. Its that warm and fuzzy feeling that guests experience after a fine evening at a great restaurant where their every need and expectation was exceeded and will hopefully be sustained long enough to get that customer to returnand recommend the restaurant to others.
But with such busy lives, that feeling often fades quickly. Moreover, the ever-increasing competition for the attention of guests means foodservice operators are suddenly finding it difficult to maintain mindshare.
Thats where loyalty and customer relationship management (CRM) tools come in. Technologies that aid in the subtle art of maintaining a presence and influencing behavior are assisting operators in understanding, targeting and building relationships with their most profitable customers, boosting the bottom line.
In just the past year, for example, Michaels Gourmet Group has seen average spend per customer increase 9 percent and redemption activity for its 10,270 Gulf Coast Connoisseur Club members rise about 10 percent, with half of club members making at least one purchase. By tapping a solution from Ernex Marketing Technologies (www.ernexinc.com) that has helped the group of Florida family-owned restaurants foster loyalty to the restaurants, Michaels has been able to excite guests with enticing rewards and programs, says Michael Klauber, co-proprietor.
There are, of course, many paths to retaining loyal customers. While no one solution will work for every restaurant, here are eight paths to loyalty success:
1) Have a reason to be loyal beyond coupons. Without a loyalty-fostering environment, there is no afterglow to sustain. The key to loyalty happens at the restaurant, says Dwayne Chambers, VP marketing for Colorado-based Red Robin Gourmet Burgers. Managers and servers treat people as individuals and understand their desires as well as their needs, to make the guest experience unforgettable. Red Robin employees, for example, are rewarded for unbridled acts, such as the team member who drove a family with a stalled car to a wedding in a nearby cityand back the next dayarranging a car repair in the interim.
With the most frequent guests already visiting three times a month, Chambers wanted to build on those guest relationships. So with the help of Fishbowl (www.fishbowl.com) the 200-unit chain began offering an electronic newsletter featuring occasional coupons and perhaps more importantly, soliciting feedback from guests. Already 2,000 to 3,000 guests per restaurant have signed up.
2) Know what you want the program to do. For Red Robin, re-search was a key goal, so the program focuses on a mechanism to make feedback and communication simple. In addition, since acknowledging loyalty and increasing frequency were goals, Red Robin offered a card-based redemption program.
Chevys Fresh Mex, a St. Louis-based, restaurant chain, wanted to target its customer base, increase their frequency and spend money on discounts rather than media. By implementing a solution from Lochinvar Software (www.lochinvarsoftware.com), We are able to be specific and precise with our marketing efforts, says Esam El-Qunni, managing partner, such as pinning offers to birthdays or guests who havent visited in a while. Lochinvar has allowed us to learn the eating habits of our customers, the time and days that they frequent our restaurants. We are even able to track the entrees that they orderwhich in return allows us to invite them with discounts on days they would not normally go out for dinner. Chevys expects to recoup its investment within two years.
3) Dont target all guests, just the right ones. We dont want 30,000 people to sign up for our program. We want people who find value in our program, says Andrea Kulach, director of the frequent dining program for Lettuce Entertain You Enterprises, a Chicago-based restaurant group operating 28 widely varying formats. We dont want someone who only goes out once or twice a year. Lettuce Entertain You accomplishes this by offering a card-based loyalty program through Givex (www.givex.com) that includes an enrollment fee, which can be earned back with frequency.
Similarly, the Clubhouse wanted to target a specific demographic within a geographic radius of each of its three restaurants. Through a Clever Ideas (www.cleverideas.com) direct mail piece featuring a $20 promotional gift card, the chain attracted more than 600 new customers in six weeks.
4) Sustain the program and keep it fresh. The five Piccolos Italian/Mexican restaurants in the Denver area earned dismal returns from mass couponing, so management launched an e-mail newsletter from Exact Target (www.exacttarget.com). General Manager Mike Erb sends one or two e-mails a month to the 10,000-name database, and has found it takes constant attention, a message that hit home when he missed a mailing or two last summer and people noticed. Part of the challenge is to keep it fresh, so Erb ties promotions to events, such as running a special until the Denver Broncos lose a game
5) Keep it simple. Simplicity, both for the customer and staff, increases the likelihood of use. Jamba Juice, for example, integrated its jambacard electronic gift card with its Aloha POS system (www.alohapos.com) in corporate locations and selected VeriFones Omni 3740 (www.verifone.com) running Atranas (www.atrana.com) MicroPortal for franchises without Aloha, simplifying infrastructure since its also used for debit and credit. A large ATM-style display prompts clerks through transactions, speeding the process.
6) Back it up with technology. Fingertip access to a database enables staff to instantly recognize and acknowledge loyal guests. Michaels plans to tie its club database to an online reservations system and will ultimately use its system to record guest preferences, rendering it a full customer relationship management application.
Without good solid technology behind the scenes its impossible to deliver the type of service the customer expects, adds Lettuce Entertain Yous Kulach.
7) Look for a financially solid vendor. Michaels had to replace a vendor in 90 days after the previous one failedas had its predecessor. Do your homework on who your data management company is going to be, Klauber advises.
8) Make changes carefully and continue to add value. Build your program carefully, one step at a time, these operators advise. Even the best program can get stale, so continue to add value with innovative offers. Lettuce Entertain Yous program has had to introduce a fee, up redemption levels, remove points for tax, etc., in its 14 years in existence, but has remained successful because each change is carefully considered and tested first, says Kulach, and value is always added at the same time something else is taken away.
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