12 July, 2020

Technology – a blessing or a curse for the hospitality industry? – A view from a tech company.

By Embargo Editorial Team

“Then there was the tie-ins with voucher schemes, such as Groupon, which attracted fickle bargain hunters, and didn't inspire loyalty or regular customers“ This is a comment from Lucy who worked at Jamie’s for 5 years.

Does this mean that all technology solutions or mobile apps promising footfall and new customers are bad to establish a sustainable business model? In my view, there is no clear YES or NO answer, but what we definitely know is that a restaurant, bar or coffee shop, or in short venue, does not need all the apps on the market to run a successful business. Neither can it rely on footfall and new customers only.

I am sure you are being pitched by different apps every week and it is difficult to assess which ones provide value to your business. Every venue has its own challenges, however, we should ask ourselves 3 main questions:

1) What is the foundation of building-up and running a successful venue?

2) Why is tech important these days?

3) How to use tech to run a successful business

1) What is the foundation of building-up and running a successful venue?

The answer to this question seems simple: Customers.

However, up to 60% of restaurants don’t survive the first three years in the industry based on recent studies. There are many reasons such as low start-up capital, wrong location, poor restaurant promotion and bad quality food, but I want to focus on customers in this blog.

Returning customers are the lifeblood of your venue!

Venue operators know that you can fill a venue with new customers for some time but not forever. There are many tools and platforms to drive footfall which is essential for your business, but at one point you will run out of new customers or money for expensive marketing / discounts and you need to make customers return (which is significantly cheaper than acquiring a new customer).

Having a busy venue can give you a false sense of security, but what do you do if customer don’t return? How do you even realise that customers don’t return? Can you reach out to them? Or if those customers do come back, do you have a system in place to reward them regardless to your staff changes?

(If you are interested how Embargo solves and answers those questions for 450+ venues in London drop us a line join@embargoapp.com

Keep in mind, technology platforms can definitely help to solve this issue, but technology cannot and should never replace personal relationships with your customers.

2) Why is tech so important for the industry today?

I remember growing up that the reason why I would usually visit particular restaurants was word of mouth and recommendations from my friends and family. Unfortunately in today’s world of digital information word of mouth works weaker and weaker, simply because people don’t talk too much between each other anymore and spend more time on their phones. On the other side, the social media platforms bombard us with information every day and it is difficult to distinguish between relevant and irrelevant information.

Specialised technology platforms significantly influence the decision making of customers in today’s world. It is a herculean task to get customers through the door without digital promotion.. But given the flood of information it is important to use the right tools in the right moments to the maximum value for yourself which also means measure if customers return and drive loyalty after the initial visit.

Keep in mind, technology can help and support your business to be successful and prosperous, but you should always be the main beneficiary.

3) How to use tech to run a successful business

Your venue should have two ultimate goals, get new customers and make customers come back. Driving footfall is essential for any venue but in order to establish a sustainable business for many years it is even more important to make customers come back. There are countless tech and app solutions on the market, but you should ask yourself if this is a short term boost or a long term solution.

In order to build-up a returning customer base you first need to have customers and then know your customers. The next step is to reward them for their loyalty and make sure this is in place regardless of staff changes or other factors. Even with a good loyalty rewards scheme, some people might stop coming back. In this case it is key to realise when loyal customers drop and be able to communicate with them in order to make them come back.

Coming from the hospitality industry, we at Embargo understand the challenges. Our aim has been to build a solution for the industry by the industry. We drive business to your venue with the main focus on building and keeping a loyal customer base and help you run long-lasting restaurants, bars and cafes.

Keep in mind, loyal customer are the lifeblood of your business and Embargo helps you to manage these relationships saving your time and money so that you can focus on what you are best at – providing an excellent dining and drinking experience.