Point Of Service: Three ways that POS systems improve customer service and boost the bottom line

A point of sale (POS) system is one of the most expensive items that a restaurant can implement and consequently IT departments are charged with generating a high return on the investment, or ROI. One method for accomplishing this, particularly in the quick-serve restaurant (QSR) space, is to leverage the POS system as a means to improve customer service. If the guest experience can be improved either at or by the POS, the customer will be given a reason to return, and therein lies the ROI.

Restaurateurs have identified a number of ways that guest experience is being improved at the POS, both currently and what is expected for the future.

Line busting
The irony of going to a QSR or fast casual establishment is that at peak times, service both in-store and at the drive-thru can be anything but quick. To combat this, a technique called line or queue busting was developed in which an operator will move to the back of a long line and take orders remotely, most likely through a handheld device such as a PDA, in order to reduce wait time. This gets transactions processed quickly and can help move any unhappy customers out of line. Phone orders can also be managed through line busting.

Sometimes, though, line busting techniques can be a bit too efficient, expediting orders to the kitchen too quickly and overwhelming kitchen staff. One solution to this problem is to use the line busting environment as a way to get customer feedback.

However, not all line busting devices are PDA size. Some companies prefer a device of a similar design as the POS terminal itself that doesn't require much retraining to use, like a tablet PC. This allows the operator to ask questions of the customers in line, occupying their time with something other than a focus on wait time. This also has the added benefit of keeping revenue in the store by stopping the customer from walking away.

Line busting is expected to become more widespread now that falling prices have allowed the technology to proliferate.

"We've waited a long time for an affordable line buster, a handheld device that can be used with a printer," says Tom Janus, VP of IT at Cosi who uses Aloha by Radiant Systems for his POS ( www.alohapos.com ). "I've been fooling around with hand order takers for the last ten years. Ten years ago it just wasn't affordable, but today it is."

Cosi, however, does not currently use line busting in its stores and has no plans to implement the technology in 2007. Janus indicates that 2008 is a more likely option.

When asked about vendor prospects for the implementation, Janus makes no promises. "We'll start with Aloha, but that doesn't necessarily mean we'll end up there."

Customer display
Two POS characteristics consistently rated high on operators' must-have lists include speed and intuitiveness.
"At Dairy Queen we have a large menu and you need to be able to get to something easily," says Dale Braughler, owner of the Braughler's Dairy Queen franchise. Braughler opts for Posera's Maitre'D software ( www.maitredpos.com ) for its speed and ease of use. "You want to be able to go from screen to screen very quickly and have a large screen to work with. Speed is what I like."

Kent McCart, general manager of Taco John's in Maquoketa, Iowa, echoes Braughler's sentiments, and also uses Maitre'D to provide a fast, easy POS experience. He explains, "In an environment like this, we've got a lot of high school kids and entry level people. We have to make it easy for them."

But along with speed comes the opportunity for mistakes, which operators are always seeking to reduce. Says McCart, "Two things customers want at QSRs are accuracy and speed. You can do one, but you have to do both. It's really easy without face-to-face contact to make a mistake."

Customer facing displays can help to solve that problem, allowing customers to see what is being input into the POS and alert the operator to any changes that need to be made. While customer display boards are common inside most QSRs, especially those with drive-thrus, the technology is expected to proliferate into additional restaurant environments.

"I think you'll start seeing customer display boards in restaurants that don't have drive thrus because not only can I see the order in front of me, but it could also be an excellent marketing opportunity," says Cosi's Janus. Marketing opportunities could be both in-store promotions and revenue-generating third-party advertisements.

The POS system is quite capable of putting the operator in a suggestive selling mode by prompting the employee to offer up-sell items. When coupled with the customer displays, however, the POS could make suggestions directly to the consumer who might then be able to select from a list of items or options.

The viability of interactive dual displays remains to be seen. This and other types of self-service applications may sprout up in greater numbers as QSRs continue to upgrade their POS systems to accept credit and debit payments and further establish contactless payment environments.

This trend also affords customers safety from overcharging, identity theft, and other problems associated with electronic payment. "As the problem of identity theft continues to rise, I'd much rather be in an environment where the customer never loses possession of his or her credit card," says Janus.

Valuable data
Probably the most commonly touted aspect of POS systems by operators is their data tracking ability. "Every place I've worked, there has been about ten times more available data than you really need," says McCart.

But the abundance of data is certainly not a negative. In fact, it allows operators to track data for every inch of their operations, giving them the ability to improve guest service in countless ways.

"We use our POS as a tool to make service better," says Kyle Vincent of McRae & Associates, which manages restaurants including Wolfman Pizza and Stool Pigeons. "For instance, if sales of certain items aren't where they should be, we have the operators push those things. We use the data to help broaden our sales and offer the full menu to the customer."

Data collection was an especially motivating factor for Dairy Keen of Heber City, Utah it they made the decision to upgrade from a system of hand-written order taking to a touch-screen POS solution from Menu-Soft's Digital Dining ( www.digitaldining.com).

"When a customer's information pops up in the POS, I'm able to call them by name and it's like Cheers — where everybody knows your name," says Jan Olpin, corporate secretary of Dairy Keen. "It makes people feel like they are a part of your business and part of our success is based on them."

Increasingly, however, operators are implementing guest loyalty programs and integrating them with POS systems; by integrating, operators are saved the cost of paying for an external service to manage the loyalty program.

Loyalty programs, by their nature, allow restaurants to reward frequent customers through various means, but they also allow for collecting customer information and tracking customer trends. This is especially attractive to chain restaurants that can use such data to decide the best area to establish a new location.

When Dairy Keen was in the process of upgrading, Digital Dining suggested that it integrate a guest loyalty program. Olpin felt that a loyalty program would further enhance the community feel of Dairy Keen, while also increasing the bottom line.

Once the POS system went online, the success of the loyalty program was immediate and overwhelming. While Olpin is hesitant to tie Dairy Keen's gains directly to the POS, Dairy Keen's success is hard to deny. "We have been experiencing an average of 25 percent growth every year for the last ten years. However, our community is growing very fast, so I can't say the only reason we're growing is because of a frequent diner program."

The same data that can make loyalty programs successful can also be used to make marketing efforts more effective, a setup that is becoming essential to marketing practices for restaurateurs, indicates Ed McCammon, senior vice president, The Winning Team, Inc., a franchisor of Arby's restaurants. The Winning Team relies on a POS solution from Wand Corporation ( www.wand corp.com) for its marketing data. "Data generated by the POS allows me to gear marketing toward what I'm selling," says McCammon.

Overall industry beliefs support the notion that advertising dollars are better spent marketing to people who already frequent a particular restaurant. This makes frequency data generated through loyalty programs and their integration into the POS even more crucial to success.

Of the 30,000 people that would receive a Dairy Keen coupon in the local newspaper, perhaps five would redeem them over the course of a campaign, Olpin indicates. Of 4,000 mailings sent to members of the frequent diner program, she says she can expect approximately 1,000 redemptions. "I'm giving the same offer as in the newspaper, but my return is so much greater. My marketing dollars are definitely going a lot further."

McCammon also feels that his marketing budget is much better spent. "Rather than spending $20,000 on radio advertising and TV spots — the 'shotgun approach' — I can use data from the POS to pinpoint my marketing dollars," he says.