The Internet is serving restaurants well.
As competition intensifies to fill seats and turn more tables, both restaurant chains and independents are relying on online reservations in addition to the standard call in. They also are starting to send e-mail and direct mail more often to develop stronger bonds with frequent diners.
OpenTable.com recognizes this trend. The San Francisco company is a provider of guest and table management systems for restaurants and free online reservations to consumers. It has partnered with VerticalResponse Inc. to let member restaurants send graphically richer e-mail and mail to their customer base, with better list management tools.
“The restaurant business is notoriously difficult,” said David Cain, OpenTable's senior manager for restaurant marketing. “The number of restaurants that go out of business in the first and second years is really high, so you really need to build loyalty with your customers.”
VerticalResponse's tools are available for use by OpenTable's more than 2,200 client restaurants nationwide, including those run by Emeril Lagasse, Morton's The Steakhouse and Kimpton Group. Users select a template from the listed categories, add pertinent content, choose from their customer lists and view reporting for response to the direct overtures.
The main VerticalResponse tool that OpenTable members use is iBuilder. This Web-based solution is in use outside the restaurant business by entities such as Brookstone, Country Clutter, Silverado Vineyards, S&S Worldwide, SalesLogix and the Breast Cancer Fund. This self-service direct marketing tool also is used to send online newsletters.
“It's really a one-stop shop for small businesses [that] don't have the expertise or the resources to carry out a direct marketing campaign,” said Janine Popick, CEO of VerticalResponse, San Francisco.
IBuilder primarily serves users whose average customer list is between 2,000 and 4,000 e-mail or mail addresses. But it also works for restaurants with lists under 1,000 names. Users are charged per e-mail or postcard created using iBuilder's template.
OpenTable will promote iBuilder to all its members. Restaurants that elect to use the tool will get a discount from VerticalResponse when they run an e-mail or postcard campaign to their customers.
Founded in 1998, OpenTable's computerized reservation system gives restaurants incremental reservations, better marketing capability and operational efficiency. Client restaurants pay an installation fee, monthly subscription and a charge per head sent through www.opentable.com.
According to the company, more than half of the people reserving on the OpenTable site do not typically have a specific restaurant in mind. They use OpenTable to decide where to eat.
More than half of the OpenTable diners report they are dining at a restaurant for the first time. Nearly 30 percent of diners make reservations between 10 p.m. and 9 a.m. when restaurants usually are closed.
When customers book, they are entered into the system manually if reservations are via telephone and automatically through the Internet. Users can undertake marketing efforts based on customer preferences and dining history. All communications occur only with the customer's consent.
“We're constantly looking for the restaurant's ability to reach out to their customers,” Cain said. “OpenTable basically is a CRM tool. Repeat business is important to any business, but especially to restaurants.”
