News Briefs

Shake Shack CEO Randy Garutti has announced his intent to retire after 24 years with the company.

"...I know it’s time for the Company to benefit from its next generation of leaders. Our current leadership team is an incredible group and is well positioned to drive the Company forward to even greater heights. For the better part of the last two decades, Shake Shack has been my life’s work and I’ve never been more optimistic about our team, our leaders and what’s ahead for this Company," according to a statement from Garutti.

Garutti recalled Shake Shack's origins: "In 2004, Danny (Meyer, Union Square Hospitality Group's Founder and Executive Chairman)  envisioned a permanent kiosk in the Park, quickly scratched a pencil sketch of the menu, and we opened our very first Shake Shack. All the while, our teams were busy leading fine-dining restaurants, but I kept finding myself drawn to, and most comfortable, when I was in the Shack spinning shakes and cooking ShackBurgers with the team. But in those days the Shack was a one-off project - meant to activate and raise money for Madison Square Park - and none of us imagined we'd ever have a second Shack, never mind a global family."

Today, there are more than 500 Shacks in 33 states, and 18 countries.

Lou Malnati's Pizzeria, a renowned Chicago-based pizza company, is revolutionizing its marketing approach through sophisticated data analysis. In a partnership with DataDelivers. a provider of data-driven tools and services in the restaurant industry, Lou Malnati’s has implemented  strategies to optimize sales, enhance customer engagement, and drive traffic to their restaurants.

“We’ve taken a data-driven path to better understand our customers and how they use our brand,” said Bob Nygren, CFO at Lou Malnati’s. “Leaning into analytics has helped refine our approach and the results are following.”

Lou Malnati's has adopted a customer-centric marketing approach, delving deep into customer demographics, psychographics, and preferences. By stratifying customers into frequency cohorts, the company can effectively activate specific groups with targeted messages. The process involves gathering extensive data and building a robust database structure, followed by leveraging advanced analytics capabilities to refine marketing strategies.

To accomplish this, Lou Malnati's has partnered with DataDelivers to manage their database and optimize customer information. Using the Customer Management Platform Lou Malnati’s successfully completed the data collection and advanced analytics phases in just 60 days, ultimately leading to the enhancement of their marketing strategies. This partnership enabled Lou Malnati's to streamline message delivery, enhance campaign effectiveness, and identify the most responsive and unresponsive customer segments that are categorized as heavy users, frequent users, at risk and lapsed users. By tailoring messages to each cohort, Lou Malnati's has seen remarkable results, experiencing incremental improvements in sales ROI with every campaign.

Nygren emphasizes two key elements to their data-driven strategy – innovation and measurable success. The company employs data analysis to uncover actionable insights, combining innovative thinking to explore uncharted territories and progressive methods to refine their approach continually. Through the use of hold-out groups and control groups, Lou Malnati's assesses the effectiveness of their marketing campaigns objectively. The approach, which replaces gut feelings with real data, has provided a new perspective and valuable insights into customer behavior.

As Lou Malnati's progresses, the company plans to further refine their strategies based on response rates and customer feedback. This test-and-learn approach, facilitated by DataDelivers, ensures that the company can adapt swiftly to changing market dynamics and customer preferences.

"We've transitioned from gut feelings to real numbers. DataDelivers has been instrumental in helping us understand our customers better, enabling us to tailor our messages and offerings effectively. Our partnership is a testament to the power of innovative thinking and actionable data analysis," added Nygren.

SOCi Inc. today – in line with the holiday travel season – released a comprehensive review and ranking of the leading hotel brands in the U.S. based on their local visibility score for reputation score. Each reputation score was carefully calculated based on five key parameters, evaluating overall hotel location performance across top social and business listings platforms: Google, Yelp, and Facebook. 

SOCi analyzed velocity, the rate of new reviews each month and whether it was increasing or decreasing; volume, the average number of reviews per location, tracking upward or downward trends; variety, the mix of positive and negative reviews; response, how quickly and how often a company responds to positive and negative reviews; and ratings: the average score a company receives on each platform across all locations. In total, SOCi analyzed over 100 signals measuring local visibility performance and engagement, including reviews, questions, and rankings across online listings for thousands of hotel locations. 

"In an industry as customer-centric as hospitality, satisfaction and referrals hold paramount importance," said Monica Ho, CMO of SOCi. "The digital footprint of a hotel is increasingly becoming the cornerstone of decision-making for travelers."

Key takeaways from the ranking include:
 

• Both Hyatt and Hilton Garden Inn clinched the top spot with a score of 69 out of 100 possible points. Close behind the top spot were Marriott and InterContinental Hotels & Resorts, each scoring 68.
• The bottom three were Baymont by Wyndham (44), Econo Lodge (33), and Super 8 (39).
• The average score for the hotel brands in the study was around 59, indicating potential for improvement in local reputation management.

The analysis applied rigorous selection criteria, considering only chains with hundreds or thousands of locations, leading annual sales figures, broad geographic or global presence, strong brand recognition, and a track record of success over time. 

Additional findings from SOCi’s analysis include: 

• Dominance of Upper Echelon: The mean score for premium hotel chains like Hyatt, Hilton Garden Inn, InterContinental, Marriott, and Westin is 67.4. These hotels have posted high scores (within the 68 to 69 range), underscoring their dedication to superior service and potent online reputation management.
• Struggles in the Value Segment: The mean score for value segment hotels, namely Super 8, Econo Lodge, Motel 6, and Days Inn, stands at 45.5. This score, contrasted with the premium hotels' average of 67.4, indicates a significant difference. It suggests that economy brands in the value segment have difficulties in effectively managing their local reputation when compared to their premium counterparts.
• Mixed Performance of Wyndham: The Wyndham group presents varied results across its brands. La Quinta by Wyndham posts a somewhat respectable score of 56, while Wyndham Hotels & Resorts and Baymont by Wyndham trail with scores of 55 and 44 respectively. Within the Wyndham group, Motel 6 and Days Inn, both categorized in the value segment, scored 52 and 41, respectively. This discrepancy within the same group underscores the necessity of bespoke local visibility management strategies for diverse brands.
• Performance of Midscale Chains: Midscale chains, exemplified by Holiday Inn Express, Radisson, and Comfort Inn & Suites, have achieved decent scores, ranging from the mid-sixties to the low fifties. This implies that these brands, in addition to certain premium chains, have exerted efforts to manage their local reputation successfully, eliciting positive customer feedback.
• Improvement Opportunities: A noticeable gap exists between the top-rated premium hotel chains (average score of 67.4) and the lower-ranked chains in the value segment (average score of 45.5). This substantial gap reveals a considerable opportunity for improvement among value segment chains like Super 8, Econo Lodge, Motel 6, and Days Inn. They should work to enhance their local reputation management strategies and practices.

“In our analysis, we found that hotel brands with lower scores often fall into the ‘ghosting’ trap, ignoring local feedback, and thereby eroding their digital reputations,” said Ho. “Tackling the issue of ghosting could be a game-changer for value segment hotels, in particular, offering them a chance to elevate their scores and stand out in an otherwise commoditized sector. At the end of the day, engaging with customers online and addressing their concerns promptly isn't just a reputation management strategy – it's a way to differentiate from the competition and build lasting relationships."

The overall average reputation score for hotel chains can provide a benchmark for individual hotels to aim for in their local visibility management efforts. With the highest-scoring hotels nearing the 70 mark, there's clear evidence that local visibility is achievable within this industry.

The results of this analysis highlight the substantial role online reputation plays in bolstering local visibility for hotel chains. In the era of digital booking and online reviews, maintaining a strong online presence and proactively engaging with customers can significantly enhance a hotel brand's local visibility and competitiveness in the industry.

"Local visibility and online reputation are inextricably linked," added Ho. "Our research underscores that a hotel chain's proactive and positive engagement with its online audience directly contributes to heightened local visibility and ultimately, operational success. Hotel brands that understand and leverage this connection gain a significant competitive advantage. They not only showcase their dedication to their guests but also expand their reach within their local markets."

To further explore how online reputation impacts local visibility, and to understand the strategies adopted by high-performing hotel chains, visit the interactive LVI dashboard or download the "The High Cost of Invisibility for Multi-Location Enterprises."

Honeywell announced plans to enhance and strengthen its building automation capabilities with the acquisition of Carrier Global Corporation’s Global Access Solutions business for $4.95 billion, in an all-cash transaction. This acquisition will enable Honeywell to become a leading provider of security solutions for the digital age. 

The acquisition, which includes both hardware and software solutions, further supports Honeywell’s recently announced plans to align its portfolio to three compelling megatrends: automation, the future of aviation and energy transition, underpinned by robust digitalization capabilities and solutions. The Global Access Solutions business will enhance Honeywell Building Technologies’ business model of leading with high-value products that are critical for buildings.

The business brings an attractive growth and margin profile that will be accretive to Honeywell with valuable software content, resilient business model and strong sources of recurring revenue. The acquisition will add three respected brands to Honeywell’s portfolio with a focus on life safety and digital access solutions, including:

• LenelS2, a leading business for over 25 years in commercial and enterprise access solutions, including well-known offerings OnGuard and NetBox, used by numerous Fortune 100 customers.
• Onity, which offers electronic locks, including hospitality access, mobile credentials, and self-storage access. Nine of the ten top hotel chains are customers.
• Supra’s cloud-based electronic real estate lockboxes offer mobile credentials and access management, as well as a leading digital platform to optimize scheduling for property showings.

When the deal closes, the combined company will be able to accelerate innovation, bringing products and capabilities to customers that are increasingly moving to cloud-based services and solutions.

“Honeywell’s strong track record delivering building automation products and services makes this a natural fit that will create a leading security platform with forecasted annual revenue in excess of $1 billion,” said Vimal Kapur, Chief Executive Officer, Honeywell. “By leveraging the capabilities of the combined company’s advanced security and safety systems, customers will be able to maximize their performance, efficiency and cost-effectiveness and create long-term, sustainable value.”

The purchase price represents approximately 13x 2023E EBITDA, inclusive of tax benefits and run-rate cost synergies. The transaction is expected to be cash-EPS accretive in the first full year of ownership.

The transaction is expected to close by the end of the third quarter of 2024, subject to customary closing conditions, including receipt of certain regulatory approvals.

Evercore Inc. is serving as financial advisor to Honeywell. Skadden, Arps Slate, Meagher & Flom, Simmons & Simmons and Womble Bond Dickinson are providing external legal counsel.

Note to editors: Carrier Global Corporation today issued a separate press release on the transaction. Click here for that announcement.  

SoundHound AI, Inc., a provider of voice artificial intelligence, announced a definitive merger agreement to acquire SYNQ3 Restaurant Solutions, a leading provider of voice AI and other technology solutions to the restaurant industry.

The deal will make SoundHound the preeminent U.S. provider of voice AI for restaurants, significantly extending its market reach by an order of magnitude to over 10,000 signed locations and accelerating the deployment of leading-edge generative AI capabilities to the industry. SYNQ3 will add large brands spanning drive thru, fast casual, casual segments, and convenience stores to SoundHound’s fast growing customer base – bringing the total to more than 25 national and multinational chains.

The highly complementary businesses will match nearly two decades of SoundHound AI innovation with decades of SYNQ3 industry expertise and established relationships. The SYNQ3 team brings deep restaurant sales, product, and customer service experience with an increasing focus on AI. Seasoned executive talent like CEO and Co-Founder Steve Bigari, a former McDonald’s operator, will strengthen SoundHound AI’s leadership as the company moves to rapidly roll out its best-in-class proprietary AI solutions to restaurants across the U.S. and beyond.

Other immediate business benefits include:

• Over 100,000 restaurant locations in the combined pipeline, and over 10,000 signed
• A broad suite of AI products to offer SYNQ3’s established customer base additional value added services, including Dynamic Interaction, Smart Answering, and Employee Assist
• Revenue synergies with SoundHound’s existing restaurant business
• Enhanced AI models using data from over 50 million interactions to strengthen product performance
• Omnichannel voice and conversational AI offerings that allow restaurants to engage across multiple touchpoints
• An acceleration of SoundHound’s monetization strategy via voice-enabled food and drink ordering in millions of cars, TVs, and IoT devices

“In joining forces, SoundHound AI and SYNQ3 will be the go-to standard for cutting-edge voice and conversational AI solutions for the restaurant industry,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound AI. “Restaurant operators are turning to technology en masse, and voice AI is now playing a key role in helping them drive sales, reduce costs, and alleviate the burden of increasing demand on their employees.”

“SoundHound AI and SYNQ3 will provide our restaurant partners with a formidable voice solution that we believe significantly surpasses the competition,” said Steve Bigari, CEO and Co-Founder of SYNQ3. “Our businesses are highly complementary, with both AI and industry expertise at the core of who we are. Together, we plan to capitalize on those synergies to provide best-in-class AI ordering methodologies backed by the largest library of restaurant AI orders in the world. This will power a rapid acceleration of our growth!”

SoundHound is expected to pay a total consideration of $25 million. Over the next three years, based on certain revenue targets being achieved, up to $4 million of additional consideration could be realized. The aggregate consideration payable to stockholders of SYNQ3 consists of approximately 20% in cash and approximately 80% in shares of SoundHound’s Class A common stock. The transaction is expected to close in the first quarter of next year. Additional details will be provided on SoundHound’s fourth quarter 2023 earnings conference call.

McDonald’s is opening the first CosMc’s location  in Bolingbrook, Illinois, this month – with 10 locations to be opened in the next year.  

CosMc’s will have “a uniquely seamless digital and drive-thru experience” with ”dynamic menu boards and cashless payment devices to breeze through the ordering and payment process, allowing for guided exploration and customization along the way,” according to a company statement. Drive-thru pickup windows are assigned once the order is ready. 

Demand for Drive-Thru

Drive-thru traffic rose 30 percent from 2019 to 2022, according to a report from the food service research firm Technomic and reportd by the New York Times. 

Brands including Chipotle, Shake Shack and Sweetgreen are among the fast-casual brands expanding their drive-thrus as consumers shy away delivery and fees and instead opt to pickup their off-prem orders.  

CosMc’s menu features specialty lemonades and teas,  blended beverages and cold coffee – think Sour Cherry Energy Slush, Tropical Spiceade and S’mores Cold Brew. Customizations are available and include popping boba, flavor syrups, energy or Vitamin C shots, and  more.

The food menu includes  Spicy Queso Sandwich, Savory Hash Brown Bites and Pretzel Bites served with dipping sauces. On the sweet side, there's a Blueberry Lemon Cookie Sundae and Caramel Fudge Brownies, to name a few. And there will be a few of the McDonald’s classics on the menu.

Visit cosmcs.com or follow CosMc’s on Instagram, TikTok and X.