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Check Please! The Next Evolution in Cash Flow Improvement
By: Mike Milan | August 5, 2019
We have all been there. It is the end of dinner; the place is packed, and your server is nowhere in sight. You sit, you wait, and finally the server makes an appearance and is running as fast as they can. It is a dilemma that plays out during the busiest times in a lot of our favorite eating establishments. It is so commonplace, that we as consumers have come to expect dinner to be a prolonged affair. Outside of the minor inconvenience it causes us as the patron; this is a huge problem for the restaurant.
The problem is that we, the patrons, are occupying a table. The table in a restaurant is one of the primary drivers of revenue in the business. Therefore, the goal of the restaurant is to generate as much revenue from this space as they can in a given hour. Since the average check per patron is relatively the same across the board, the way to maximize revenue is to have more patrons per day sit at the same table. In the industry, this is called “turning tables”. That means the best situation is to give you the best experience in the fastest manner possible.
Becoming more efficient is a process improvement exercise that breaks down the entire dining experience from seating through table reset. There are several choke points along this path. The first being the limited number of seats available, the last is having the staff to reset table for the next guest. The choke point I want to focus on today is the payment collection process. This is the one where the consumer has satisfied their dining need and is ready to leave. This is a critical time frame because a delay here hurts the restaurant in two ways. First, the customer can become easily frustrated with waiting. Second, the restaurant is hurting its own revenue per hour rate by having a time period that is not generating new or additional revenue.
That leads me my dining experience last night at BJ’s Restaurant & Brewhouse. Let me tell you, I saw a company that has leveraged technology to both the restaurant and customers advantage. I was impressed and happy with the experience. So much so, this needs to be the next evolution of dining. Here is what happened.
I wasn’t surprised by our server having a handheld device to take our order at the table. Gone are the days of memorization or handwritten orders. BJ’s system submits an order directly to the kitchen and generates the customers tab instantly. This reduces the total ticket time significantly and reduces errors. Our server took our order and promptly moved on to attending to other patrons, no trip back to the point of sale system to re-type the order. Good move number 1, but something I had seen before.
Now, prepare to be impressed. Minutes after the server left the table, we received a text message on our cell phone. The text was simple it said, “Did you know you can pay from your phone?” Just click the link when you’re ready. Serious. Before our bill arrived, we were given the ability to pay our bill. (In full disclosure, we are members of BJ's Reward Program as well.) Still, we were given the control to determine when our dining experience was over, and we could leave. We clicked the link, paid the bill, and left. It was late. I was tired and this was one of the best experiences I could have had in a restaurant at that moment.
It hit me on the drive home. They have found a way to “turn tables” faster by giving the customer control over one of the most critical components of the dining process. We didn’t linger, we didn’t feel trapped, and we felt empowered. I can only imagine that this one technological change will lead to at least one additional table turn per day. If that is true; BJ’s Restaurant & Brewhouse may have just given themselves a raise. Here is the math. If the average table check is $50, and the restaurant has 100 tables, that is an additional $5,000 per day in revenue. If they could maintain that every day for a year, they would have increased restaurant revenue by $1,825,000 without any additional fixed costs. That is a win in the cash flow game.
This is a great example of how one company leveraged the natural behavior of the consumer and our current technology to improving their cash flow. I’ll be on the lookout for more items like this to share as we can all benefit from great ideas.