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Mobile Loyalty Apps Make their Mark in Hospitality

By  Julie Ritzer Ross, Contributing Editor, VSR — May 03, 2010

New food items aren't the only thing restaurateurs are adding to their menus in an effort to eat up more of consumers' dining dollar. Players in the QSR, fast-casual and fine-dining segments alike also continue to implement a wide variety of solutions aimed at cultivating repeat business and stronger relationships with customers, improving operating efficiencies and more.

Among technology deployment trends in hospitality, rapid migration to digital marketing platforms tops the list. Elements of such platforms include digital menu boards and signage, as well as loyalty applications linked to users' cell phone numbers, email accounts and social networking sites. Operators leverage digital menu boards and signage to spotlight different bills of fare during individual dayparts, as well as to convey promotional messages and bolster revenue by featuring advertisements for products (e.g., branded beverages) served in their establishments, explains Steve Ingle, channel marketing specialist, PAR PixelPoint.

Digital loyalty applications, meanwhile, are being used to extend operators' connections with customers beyond restaurants' four walls, "an essential step given the emergence, from the economic meltdown, of a very different consumer with more discerning habits and a tendency to be most loyal to those (establishments) with which they have a personal link," says Peter Wolf, PARTech's CMO.

David J. Gosman, CEO, pcAmerica, corroborates Wolf's comments, adding that social media is also changing the face of the hospitality vertical-and thus, fueling digital solutions implementation-by yielding operators the ability to go one step further, marketing to the friends, fans and followers of their customers. The ISV's Restaurant Pro Express POS software solution is coupled with the customer loyalty program utilized by the Tasti-D-Lite frozen dessert chain. Members of the program can sign in online and connect their Twitter, Facebook and Foursquare accounts to their account. Every time customers use their Tasti-D-Lite "TreatCard" when making a purchase, Restaurant Pro Express posts an automatic Tweet, Facebook notification and/or Foursquare check-in indicating that they have earned reward points.

Digital Marketing Bundles
While digital marketing components can be sold separately to hospitality players, Advanced Business Products, Orlando, Fla., is making its mark by also offering them in bundled fashion. The VAR further sets itself apart from the pack by integrating the digital menu board and signage pieces with end-users' POS systems. This enables price changes, menu item additions/deletions and the posting of promotional/advertising messages to be controlled and executed through those POS systems either on-site or from corporate headquarters, rather than handled by menu board design firms or other third-party entities.

"In addition to enhanced control on the digital side and the ability to obtain the entire solution from one source, operators are attracted by the price of the package as compared to the cost of a four-panel menu system," asserts Bryan Griffin, Advanced Business Products' COO. The latter alone runs approximately $20,000 to $25,000, plus monthly hosting charges-as much as the package, Griffin specifies.

Earlier this year, The Cereal Bowl, a four-unit, Coral Gables, Fla.-based chain of cereal cafes with 24 additional stores under development in the U.S., and 20 new units being opened overseas, engaged Advanced Business Products to implement the digital bundle. The solution comprises PAR hardware and PixelPoint POS software, as well as the loyalTXT automated loyalty program from Sundrop Systems, an Orlando, Fla.-based ISV.

Employees of The Cereal Bowl are trained to ask customers whether they would like to join the chain's loyalty program. Interested customers provide their cell phone number, which is entered into the POS terminal via Sundrop's software. Enrollees immediately receive a text message welcoming them to the program and requesting a reply with their email address. Customers who reply with their email address receive an email message that allows them to complete registration online.

On subsequent visits to The Cereal Bowl, customers again share their mobile number or email address, which is used for tracking purposes. After each visit, program members get a text or email message updating them on their status in the operator's loyalty program; once a reward has been earned, an expiring coupon is automatically issued via the same channels. loyalTXT is also integrated with Facebook and Twitter, allowing The Cereal Bowl and its customers to "follow" each other and enabling the operator to use social networking as another platform for keeping both the operator and the loyalty program fresh in customers' minds, says Travis Priest, Sundrop Systems' CEO.

"Taking the loyalty program digital works for us on so many levels," notes Michael Glassman, COO of The Cereal Bowl. "Building our offering around this kind of communication (dovetails) well with the fact that pretty much everyone has a cell phone, and most people don't like to carry around multiple loyalty cards. We don't have to bother customers or hold up transactions by using pen-and-paper program sign-up forms. We're building a database of actionable information for use in future menu development and other initiatives. We won't have the expense of changing card designs to suit different marketing campaigns. It's just a tighter connection all around, which is what we're trying to achieve in the first place." More than 300 patrons of The Cereal Bowl signed up for the program within the first six to eight weeks of its inception, and enrollment is moving forward at a rapid clip, Glassman reports.

The operator also utilizes digital menu boards that are interfaced with its POS system. Panel content alternates every 45 to 50 seconds between the menu and advertisements. Twelve-inch customer-facing displays showcase in-store promotions and advertising as well as tout the loyalty program.

Going Mobile
Mobile applications are also gaining ground in the hospitality arena. Jimmy Fortuna, vice president, product development for Radiant Systems' hospitality division, attributes heightened operator interest in mobile applications to benefits reaped as payment acceptance capabilities are incorporated into hand-held devices. Examples encompass labor savings, faster service and eliminating the need for credit cards to leave diners' sight. "Restaurant operators have become increasingly aware of the dangers and costs associated with breaches and frauds that occur due to a lack of PCI compliance and payment protection measures," Fortuna asserts. Hospitality solutions development will continue to reflect this concern."

Even more significant for VARs is the evolution of these solutions, from adoption and technological standpoints alike. On the adoption front, more restaurateurs that offer delivery now equip drivers with wireless payment acceptance devices. "The advantages for these operators are fewer chargebacks and a better interchange rate than is available when customers read their credit card numbers over the telephone when ordering," observes Drew Soinski, vice president, business development, Hypercom.

Similarly, demand for line-busting and wireless ordering/payment applications is extending beyond traditional dining establishments to encompass venues as movie theaters, some of which utilize hand-held devices.

"Movie theaters and stadiums are just the tip of the iceberg in terms of new 'fringe' hospitality technology avenues now open to VARs," observes Andre Nataf, senior business development manager, Digital Dining /Menusoft Systems.

Not long ago, Leebro Systems POS, a New York City-based VAR, capitalized on the opportunity Nataf describes by configuring a mobile ordering and payment solution for Brooklyn Bowl. Located in the Williamsburg section of Brooklyn, the venue has 25,000 square feet of space, including 16 lanes of bowling, a full-service restaurant with about 70 seats and a large concert area. "On any given weekend, 1,500 people visit Brooklyn Bowl within the span of a few hours," explains Jason Lee, Leebro Systems' managing partner. "The client wanted a flexible solution that would provide guests with a seamless experience and improve customer service and efficiencies."

To this end, Lee and his team configured a system comprising Digital Dining POS software and Motorola MC50 hand-held computers fitted with magnetic stripe readers for remote credit card acceptance. Staff uses the hand-helds to take guests' food and beverage orders and transmit them to the kitchen, whether from restaurant tables or the bowling lanes.

"Ordering remotely from the bowling lanes makes things run more smoothly because guests aren't stopping play to go get drinks or food, which can create a backlog of people waiting," Lee says. "It also speeds up service in the restaurant. And transferring checks around the facility is not only a convenience for guests; it saves the staff a significant amount of time."

Moreover, ISVs are starting to develop mobile applications for more inexpensive devices, such as Apple iTouch. These solutions will allow orders to be transmitted from diners' cell phones to restaurant kitchens, as well as for payment to be accepted at the table via cell phone rather than through operators' own hand-held devices, says Jeff Riley, CEO, Dinerware. "VARs can expect to see a host of very targeted solutions going forward," he says.

Travis Young, CEO, OnePOS Inc., an Orlando, Fla.-based ISV, would also agree. "Now that operators can get two hand-helds for about the cost of a single, fixed terminal, they can consider the merits of the technology, and not the price, when selecting solutions for their restaurants," Young says.

Young also mentions another advantage related to hand-helds, specifically new Windows CE-based devices that are set to come out. "These are dramatically less expensive than those operators could get even a year ago," he says. "For the same cost as devices that can accept payment at the table, operators can implement these hand-helds, allowing them to operate a full POS terminal that can be used for all types of transactions."

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