Why it's Time to Jump on the Big-Data Bandwagon
For years, large restaurant chains have been getting a leg up on the competition by using data science and data management to more effectively run operations. But as mobile and cloud technology become more widely available and affordable, micro-chains and even single-unit restaurants are embracing big data to take the guesswork out of management and stay competitive.
And yet, many small operators still rely on trial and error to figure out what works. But as the market has become more saturated, the stakes are higher, meaning such haphazard strategies won’t cut it for much longer.
“There’s more money spent in restaurants, sure, but there’s also a lot more seats to occupy and a short span of time to understand your relevance, capture your trade area, and build on the loyalty of your guests,” says Rom Krupp, CEO of Dallas-based data-mining software provider Marketing Vitals. How short, exactly? Krupp estimates just 90 days for brands without the capital of a restaurant group or chain behind them. “Experimentation is the most expensive thing a restaurant can do,” he says.
Unlike five years ago when the sole option was investing $100,000 in complex diagnostic systems with hefty start-up fees and requisite expert and consulting expenses, operators can now purchase turnkey packages as a subscription—requiring around $100 per month per location, with minimal upfront cost. It can take as little as a month to start understanding certain data points, such as which menu mix encourages repeat customers or appeals to the health- or budget-conscious.
“If used right, it should be more helpful to small than big chains because they’re much more nimble and can adapt to customer needs much faster,” Krupp says.
Barley Swine, Bryce Gilmore’s seasonal small plates restaurant in Austin, Texas, doesn’t just use reservation management software Resy for booking tables. The software’s business intelligence tools amass prior-year numbers to help the restaurant project staffing and set schedules. At the same time, comparative data analyzes guest volumes from week to week, month to month, and year to year.
In addition to tracking tasting menu versus a la carte orders, Resy logs menu benchmarks—from drinks down to mid-meal, last savory, first and second dessert—all of which helps both the front and back of house work smarter, says general manager Stefan Davis.
For Chris Snyder, president of three-location Taps Fish House & Brewery, the Catch, and the forthcoming Taps Brewery & Barrel Room in Southern California, big data acts like a check on his gut instincts—in surprisingly beneficial ways.
“In the restaurant business we as operators get bored,” Snyder says. “We have a dish, Calamari Provencal, that’s been on the menu since we opened. We looked at it and said, do we need to change this? Maybe guests want something new.”
Turns out, the dish comprising flash-fried calamari tossed with fresh tomatoes and green onion in Worcestershire, Tabasco, and butter sauce, was not only one of the leading items ordered, per Marketing Vitals’ mined data; it’s also one that brings repeat guests back.
“It made us ask ourselves, if we actually took off the calamari, how many guests does that impact?” Snyder says. “It’s changed the way I think and the way we run our business.”
That said, just as important as accessing said data, however, is a willingness to put oft-touchy egos aside and listen to what the numbers are saying. “It takes some bravery on your part to allow it to transcend your ego and what you think you know about your business,” Snyder says. “But now rather than being gut-driven, our team is armed with actual stats and analytics, which gives us insight we’ve never had before. It’s invaluable.”