Franchise Update Magazine Issue II, 2014 | Page 44
Grow Market Lead
Consumer
data
BY TOM EPSTEIN
Going Mobile
Help your customers spend with mobile apps
A
ccording to the National
Restaurant Association:
• 13 percent of all Americans have made a reservation using a smartphone or tablet in
the past 30 days;
• 46 percent said they would do
it if the establishment offered it; and
• 41 percent said they have used a
menu to view what’s available.
Consumers are engaged. They see
mobile as a way to make life easier for
them. With that in mind, when looking to launch a mobile solution don’t
just try to make it cool-looking or all
about the branding (though that is
important), and keep your customer
in mind, remembering what they are
looking for.
Most surveys show that consumers
rank making an order, tracking loyalty
points, making a payment, and finding
locations as the order of importance
to them. Make each of these components as easy as possible to use and you
will find the adoption of your mobile
strategy much higher.
Mobile can be used to place orders
for takeout, but it can also be used in
the store for line-busting. During peak
times, patrons can order their meals
while they are waiting in line. And if
you enable a payment feature, they can
pay by showing a QR code on their
smartphone or by making a direct payment from their account on the app,
significantly reducing their wait time.
Unintended benefits
If you meet the customer needs described above, you will achieve the benefits you intended of increasing brand
awareness, locking that customer into
your brand as a loyal customer, and
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Franchiseupdate ISS U E II, 2 0 1 4
increasing your share of their spend.
If you also include the ability to earn
and redeem loyalty points by integrating that into the app, you will see ticket
lifts (we have seen as high as 17 percent) and increased frequency of visits
(we have seen as much as 50 percent).
When looking
to launch a
mobile solution
don’t just try
to make it
cool-looking
or all about
the branding,
and keep your
customer in
mind.
If you do not include the loyalty program, you will be alienating customers
you have worked hard to engage and
who have joined the program, forcing
them to not use your mobile program
if they want to earn points.
Here’s one idea that could end up
paying for your mobile program: include a payment option where customers can register their preferred
payment type and pay for the order
through that account (think Starbucks
Card). QSR operators remember when
the Durbin Amendment passed and
the card networks basically doubled
the cost of a debit transaction. If you
provide incentives for customers to
pay with the app, you can bypass the
impact and lower your total cost of
transactions.
For example, if you have an average
transaction of $8 (and 70 percent of all
of those smaller transactions are done
with a debit card), your cost for that
transaction will be around 27 to 28
cents (debit interchange is .05 percent
+ 22 cents + whatever your processor
charges). In the prepaid model, where
you “top off” a customer’s card to $50
when their balance drops to a certain
level, you are paying for that transaction only once instead of six times. A
$50 transaction on a debit card will
cost you around 50 cents, but if the
customer paid for six transactions
separately those same transactions will
cost you more than $1.60. If yours is a
concept where your customers come
in fairly frequently, this could add up
to substantial savings over time.
Geofencing
We’ve discussed geofencing before
in this column. Basically you set up a
“fence” around a geographic location,
and when one of your customers enters that area a notification will push
to their phone with an offer of some
sort to drive them in. A new use for
this technology is being explored as
a means to better serve your current
customers. How many times have you
ordered takeout from a restaurant and
when you got there either the order
was not ready, or worse, it had been
sitting there getting cold for some
time? In the not-too-distant future
you will be able to order your meal
and the kitchen will know when you
are getting close by using geofencing
technology. Your order will be fresh,
warm, and ready to go as you pull into
the parking lot or drive-through. n
Tom Epstein is CEO and
founder of Franchise Payments Network, an electronic payments processing
company dedicated to helping franchisors and their franchisees improve system performance, increase revenue, and reduce expenses. Contact him
at [email protected] or
866-420-4613 x1103.