Your Channel or Your Broker?
A restaurant manager once told me that they were getting so many reservations from OpenTable, the service was becoming too expensive. I was reminded of the old Yogi Berra line, "Nobody goes there anymore. It's too crowded".
Huh. OpenTable charges a fixed monthly fee for their CRM software and a variable fee based on the number of covers booked through their marketing network. This fixed/variable pricing model is common with technical restaurant marketing services. So at first glance it seems crazy to say OT is too expensive. Every dollar of variable cost is linked directly to a seated diner.
But look deeper. The restaurant operator was (inarticulately) saying that more and more of his customers are coming through OpenTable. OpenTable is in position to guide customers to specific restaurants. As this happens, OpenTable shifts from being an channel for restaurants to being a broker of restaurants. A channel works for you; a broker works for the customer.
This is a real problem but restaurants are too quick to blame OpenTable (or Seamlessweb, Grubhub, Groupon or other marketing partners). The issue is reliance. When restaurants guide too much of their business to marketing partners they risk losing control of their customer base: Customers start to associate more closely with the marketing partner and less with the restaurant.
The OpenTables of the world are not to blame. They only get this power when restaurant give it to them. It is the restaurant's job to ensure customers walk out remembering the restaurant, as a special experience, not just the service that brought them there.
- Be cautious and thoughtful with your use of marketing intermediaries. Only use them when they provide unique value you cannot replicate yourself.
- Be aggressive in converting new customers received from the marketing service to loyal customer for you. Know who these customers are, and engage them directly when they walk through your door.
- Be engaged with your service. If you ever feel their mission is to control the flow of customers rather than enable it, run. You and your fellow restauranteurs need to be in control.
To be clear, I have zero problem with marketing partnerships. But I have a big problem with restaurants who let their channels become their broker.