News for the Hospitality Executive
|By Jennifer Alsever, The Denver Post
Knight Ridder/Tribune Business News
Feb. 22, 2004 - Panzano restaurant manager Jennifer Olson knows all about Jack Henderson the minute he walks through the door.
A computer database tells her his birthday, his wife's birthday and their anniversary. She knows he likes to eat at the chef's counter at lunch and that he's dined at the Italian restaurant more than 100 times.
Panzano, in the Hotel Monaco in downtown Denver, is one of a growing number of restaurants using computer software to identify individual preferences and customize service for patrons.
It's not just restaurants that want to know their customers better. Some major hotels employ "guest historians" to record which visitors like fluffy pillows or bottled water so they can meet those needs during the next stay.
Casinos in Las Vegas record customer activity at slot machines, restaurants and shops, storing millions of names, addresses and ages, along with details about spending and preferences.
The idea is to give rock-star treatment to customers.
"It's flattering," said Henderson, a Denver attorney and a frequent diner at many local restaurants. "It's a factor that makes us come back."
Here's how it works: When people call to make a reservation, their names and phone number are put in a database. The hostess may ask if there any special needs, such as an anniversary or dietary restrictions.
At the restaurant, the server can add observations to the data file, such as a favored wine or that a patron prefers butter instead of oil with their bread.
"It gives a more personal touch," said Olson. "I think that's what sets us apart."
Panzano sometimes takes credit-card numbers to hold reservations, but Olson said customer information is carefully guarded and protected by a computer software firewall. Olson said Panzano would never sell or share personal information. No one has opted out of being included in the system, because most patrons don't know about it.
Panzano uses software called OpenTable to keep these computerized files. The restaurant uses the same software to manage restaurant reservations and seating by referencing a computerized map of the 200-seat operation.
The personalization strategy comes amid a wave of expected competition.
At least 13 new restaurants are expected to open in metro Denver in the next nine months. Many existing eateries are changing decor, offering specials, lowering prices and adjusting portion sizes to survive, said Pete Meersman, president of the Colorado Restaurant Association.
Dozens of companies such as San Francisco-based Smart Restaurant Solutions and Greenwood Village-based DataHost Direct sell computerized management tools and online menu services to eateries. A new Denver firm called Paradine Group intends to sell software similar to OpenTable but has yet to sign up any restaurants.
So far, San Francisco-based OpenTable has taken the Denver and mountain-area restaurant market by storm.
OpenTable set up an office in Denver last spring with just a handful of chain restaurants on board. Now 31 restaurants use the $1,200 OpenTable system and software. The company will hire two more sales associates for the Denver market.
Restaurants pay $200 a month for the service, which allows customers to book reservations online at OpenTable.com or by clicking a link on a restaurant's Web page.
With OpenTable, restaurants know whether frequent diners dislike the new tuna in the tuna salad, like to sit at a booth, prefer red wine or are allergic to wheat.
"There is a dossier on every one of my guests -- dossiers in a good way," said Charlie Stauter, general manager at Capital Grille, a new steakhouse in Larimer Square. "We're doing whatever we can to build a relationship with a guest." Such tracking can raise privacy concerns.
"The place it gets sticky is taking information without their knowledge," said Jeff Jonas, founder of Systems Research & Development, a Las Vegas company that makes software to help companies manage customer data.
Many large corporations regularly share customer data with each other -- often through intermediaries -- in order to know more about their customers. It's called "marketing append," Jonas said. "I haven't seen any restaurants do this."
OpenTable spokeswoman Wendy McCarthy said the company doesn't track people or aggregate information on which restaurants people visit.
"They're not going to write down every little thing, like you got beets with your salad or information on tipping," McCarthy said. "They're looking at what is distinctive that will allow them to serve you better next time."
Charles Master, the owner of Brix, which opened recently in Cherry Creek, said he knows about the OpenTable software and likes it.
But with just 55 seats in his eatery, it doesn't make sense for Brix to invest the money to install it, Master said.
Managers at Vesta Dipping Grill use databases to remind customers about the 7-year-old Denver restaurant with e-mails on their birthdays. Vesta also takes note of special dietary requirements.
The restaurant has 12 menus for people who are allergic to everything from soy and nuts to gluten or wheat products. Managers can have them in hand when they know someone with such an allergy is coming.
"They no longer have to wait to get a chef, who may be busy, to scratch off items they cannot have," Vesta manager David Zahradnick said.
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(c) 2004, The Denver Post. Distributed by Knight Ridder/Tribune Business News. RARE,