Restaurant Marketing Vet Weighs in on Build vs. Buy Debate
Catherine Tabor, founder and CEO of Sparkfly and a recipient of HT’s Top Women in Restaurant Technology Innovator award, sat down with Jeff Hingher, a former marketing executive who spent his career with companies including O’Charley’s, Mars Petcare and General Mills. The in-depth discussion features Hingher’s thoughts on the state of digital readiness and best practices in the QSR/Fast Casual space.
Catherine Tabor: Thank you for your time, Jeff. I would say your energy and passion set you apart. What large transformation projects have you either championed or implemented directly?
Jeff Hingher: In my most recent role at O’Charley’s, we implemented a new online ordering platform across all restaurant locations. We leveraged an external partner to aid in the implementation, and I was both the internal project team lead as well as the owner of all the marketing specific aspects of the implementation. This new platform replaced a legacy online ordering platform that was developed in-house and custom to our brand.
There were several key learnings that came out of this:
- Buy vs Build: Going with an ‘off-the-shelf’ solution can dramatically speed up the implementation of a new digital platform. And, unless you are doing something unique, going with an industry standard could be the way to go. In our case, there were also additional plug-ins that we could easily leverage to expand our capabilities. For example, some delivery companies plugged right into our online platform with no custom programming.
- Support: Senior level buy-in is key. Any sort of transformation, by definition, means change. And we all know people tend to resist change. For a project that touched the entire organization (Operations, Marketing, Finance, Accounting, Customer Service…), it was critical that senior leadership continually reinforced both the importance of the project as well as the ‘why.’ That buy-in was critical not only in pushing through challenges but also in getting proactive cooperation in creating the best guest experience.
- Impact and ‘non-digital’ aspects: We were charged with implementing a new online ordering system and it would have been easy to just focus on the delivery of the system and install the platform. Does it technically work to get a guest’s order to the restaurant? Yes. But that’s not reality. Reality is that the entire organization was affected: operations needed new procedures to fill orders; accounting had to develop online payment procedures; the tech team needed to ensure the new platform could interface directly with our POS; marketing had to generate awareness; and, facilities needed to design a pick-up area for curbside renovations. It impacted the whole organization. What made this transformation successful is that we looked at the broader implications to the organization and then included all affected functions in the process from the very start.
Tabor: If you could grade the overall state of QSR and Fast Casual digital maturity, what score would you give it and why?
Hingher: Overall, probably a B-minus. Most brands (especially QSR and fast casual….with casual lagging a bit) have some sort of digital platform when it comes to online ordering. Beyond that, it really depends on the brand. Brands like Panera and Chipotle have really invested in digital transformation and it shows. I’m a heavy Panera app user and it’s truly a great experience. Their online ordering is easy and intuitive and their in-restaurant pick-up system is set up for the to-go customer to get in and out in an easy manner. And their loyalty program is well-designed with frequent surprise rewards that are designed to win one more trip.
I think the upside for a lot of brands in this space is the development of a loyalty program. Such programs deliver the right offer, to the right person, at the right time… I also believe that by learning about your guests, you can drive trips without discounts. For example, you observe that a guest comes in and always orders a burger. For that guest, shoot them an email when you add a new burger to the menu or share news when you are named ‘best burger for under $10,’ or suggest ‘the best beer pairing for our famous burger.’ Guests want value,and value isn’t always a discount. Relevant, helpful messaging has value.
Tabor: Do you think the pandemic has accelerated the need for QSRs to adopt digital transformation projects?
Hingher: Definitely. I think the most obvious examples are the forced shifts from dine-In to off-premise such as drive-thru, pickup and delivery, and the desire for safe, touchless transactions. Brands that have not already implemented the digital platforms necessary to facilitate these off-premise occasions are struggling even worse. The reality is, in this world, orders are no longer being done face-to-face. The digital process has to be easy and seamless for the guest. If it’s not, the guest will quickly find another brand that delivers on that.
Tabor: What is the biggest piece of advice you could give to QSR/Fast Casual marketers who are looking to undertake a digital transformation project? Where and how should they start?
Hingher: Clearly articulate the strategic objective – the “why” behind what you are doing. Don’t start with the tactic and then work backward. For example, don’t start with ‘We need an online ordering platform.’ It’s better to start with something like, “With trends showing a shift away from dine-in and more toward off-premise, we need to deliver an off-premise guest experience that not only meets guest needs but drives additional trips”.
That statement is broader than just “add online ordering”. It’s more than just that one tactic. And, it needs to be given that there are broader implications for operations, staffing and payments.
Understand what the basic guest expectations are. The guest expectation is that all restaurants offer online ordering and delivery. If you don’t offer that, you need to quickly start working on it. Beyond that, start exploring things like loyalty programs and CRM.
Tabor: What non-technological changes do restaurants need to implement to turn their physical locations into fulfillment centers?
Hingher: Some of the best practices I’ve seen all revolve around the acknowledgment that the off-premise business is now at a scale and importance that it needs to be treated almost as a separate business, albeit one operating out of the same physical location. And that requires dedicated resources not only at the restaurant but potentially in the home office as well. Yes, the food you are providing is largely the same. But once the food is prepared, things start to diverge. How is the food staged in the kitchen? What packaging will you use to ensure the food is presented in a way that fits your brand but is also highly functional.
Here’s more to consider:
- Separate entrance and waiting area for to-go orders to minimize disruption to the dine-in guests while also making it easy to come in and out for the to-go guest and delivery drivers.
- A curbside option where food is brought out to the guest (This leads to dedicated parking spaces, security cameras, headsets, and even the need for handheld credit card scanners.)
- Dedicated staff for off-premise. Someone needs to own the to-go station. Quality control on the orders. Watch for curbside guests to pull up, etc. This will typically be a server. Servers make their money on tips and tips tend to be less on to-go orders; worse, they are non-existent on delivery orders as the drivers get tipped. You need to take this into account when compensating the to-go specialists. It likely means a higher per-hour rate or no one will want to do the job.
- Promote your to-go and delivery business. Make existing dine-in guests aware of the to-go and delivery options. Advertise outside your four walls to potentially win new guests that would never be a dine-in guest, and if you are going to go big with delivery, you have to pay to play with the big delivery providers (GrubHub, UberEats, etc). And while that trip might be less profitable than your dine-in trips, it is certainly more profitable than NO trip.
Tabor: In a post Covid-19 world, what do you think the future for restaurants look like?
Hingher: Off-premise will continue to be a growing share of the overall business. The physical layout of the restaurant of the future will be different. Dine-in and off-premise will most likely still share a kitchen, but otherwise be very separate or include walled-off spaces with dedicated parking, staff, waiting areas, etc. As more business shifts to off-premise, the square feet dedicated to dine-in will also likely decline. In addition, future locations should take into account not only dine-in guest traffic but also where to locate the restaurant to maximize the to-go/delivery potential - locations near office buildings, hospitals, apartment complexes, and colleges will start to look better and better.
Staffing restaurants has been a challenge for years now. I think that fact coupled with the COVID-19 implications (i.e. less face-to-face interaction) will accelerate the shift to digital ordering and things like order ahead; kiosk ordering; tabletop ordering; and order and pay on the phone while at a table.
Hygiene signaling will be even more important for the next several years. Guests now don’t just expect cleanliness, they demand it. Make sure the steps you are taking are visible to the guest. That includes posting procedures and being very visible with the cleaning steps you are taking like wiping down tables and seating and clean bathrooms. Let them see your employees actively doing the cleaning.