An open table
There’s been a lot of talk about OpebTable, the wildly popular online reservation service which helps optimize table traffic and server productivity. It all started with a blog post by Mark Pastore, a restaurant owner in San Francisco, who claimed that the costs for the reservation service, which focuses on using consumer-friendly ways to fill empty seats in 13,000 restaurants across the US, may not be worth it.
I read the post carefully and must confess that while he made some compelling arguments, he seemed to just be complaining about the fact that it was yet another mega-corporation making its money off the backs of the hard-working restaurateur. I have a friend at OpenTable, so I reached out to her in order to get her perspective.
I’ll start by saying that OpenTable’s one of those tech’s that theoretically totally inline with the idea of Symbiotek: a user can pop in what time they want to eat, along with where they are, and voila, a list of nearby eateries pop onto the screen, allowing the user to make a real reservation– without having to pick up the phone/use minutes/ or do anything really but tap or click their way to a dinner date.
Locate where you are, and it does the rest for your (Courtesy of Arstechica)
Pastore’s article speaks of OpenTable’s meteoric rise to a $1.5 Billion market cap and how, via his informal, non-scientific survey, he determined that the service is problematic at best. The problem is– he’s never used OpenTable himself. A further problem is that TechCrunch picked up the story in the form of a ‘something’s not right here’ complaint from Sarah Lacy, a confessed OpenTable detractor.
From a marketing perspective Open Table seems to be fundamentally sound– the people who run fine dining establishments are working 80 hours weeks to keep the ship running, they have little time for promotion (when was the last time you saw a great restaurant website?
OpenTable’s designed around bringing in customers and getting paid on a CPA or Cost Per Action basis. The action’s different for different companies. Some drive leads, membership sign-ups or sales. They get paid on those actions and those alone– delivering something to the client which the client can then work their magic on. After the OpenTable’s of the world get the consumer in the door of the restaurant, it’s the proprietor’s responsibility to get the most out of the new consumer. In the case of a restaurant the wait staff should be trained on the up-sell, whether that’s the bottle of wine or wine pairing over a single glass or carafe, or caressing the consumer into appetisers or desserts, etc.
But OpenTable is much more than that. The service provides its restaurant members with software and tools that allow them to track both the productivity of the tables (are there two people at a 4-top?) and the productivity of their wait-staff (in which sections are desserts and the other entre add-ons I mentioned above being sold the most?). There’s even a video site designed to get people new to the platform started.
OpenTable's Mobile App (Thanks to LarryFire.Wordpress.com)
Given the focus of the original article and it’s Techcrunch spin-off, it’s clear that these complaints are not coming from people are using the full functionality of the software. If they were, we’d be hearing complaints about how it doesn’t or is too hard to make work, has fundamental algorithmic problems and so on. But they’re not mentioning anything that substantive at all, which leads me to believe that they are either ignorant of this functionality, or are purposefully ignoring it for the sake of a well-publicized rant.
Truthfully, these owners should be clamouring for a chance to partner more deeply with OpenTable in order to drop the customers CRM (Customer Relationship Management) offers in an effort to make those people into return customers. Perhaps OpenTable can begin to license the database of similar customers of restaurant X to restaurant X for the purpose of targeted but limited promotions, which would allow the restaurant owner the user-access these people are complaining about.
OpenTable may not be perfect, but it’s clear that like all CPA business models, it’s designed to be an opportunity engine, one which can produce more growth by how well a restaurant owner chooses to wield it.
Ivan
1 year ago
I read Mark’s original article, Tech Crunch’s spin on it and also an opposing article by a restaurant who has taken the time to learn how to use the software and finds it considerably more valuable than Mark. I work with Reservation Genie and know the ins and outs of the issues revolving around Open Table and their client perception. Open Table’s number crunching is much more elaborate than ours and our clients rarely take the time to use the reporting feature we offer. The problem is that most restaurant owners don’t have the time or patience to get to all the features. I was setting up a client in NYC that uses Open Table with our system this week and he called ours the “best reservation system ever” While I appreciated the comment, I know what he probably meant is that it’s the easiest reservation system ever. The issue Open Table faces is that it costs too much for people that don’t want to hassle with all of their features. For those customers, a model like ours that costs $49 per month does the main job very well and saves them money. All the number crunching value is really reserved for a small percentage of restaurants that are full every night and trying to optimize every seat’s return.