To App or Not to App?

​One of the questions I am asked as a restauranteur and marketer is “Should we have our own App for our company?” Well considering I have 460 apps on my iPhone, one might think my natural answer would be “Yes!” Having your own app has tremendous upside, from improving the customer experience, to increasing customer engagement to building brand loyalty. With that said, an app will only be successful if you have the internal team or right partner to manage and evolve the app. 
 
Improving the Customer Experience:
The most frequent use of an app is to allow customers to order online. However, if this is your only desire for an app, there are plenty of other options that may be better suited for your operation. Many POS systems, such as Toast, Revel and Square, offer online ordering modules and there are also several dedicated food-ordering services available, such as ChowNow and Beyond Menu. Yes, there are costs associated by using these apps/platforms, but they may outweigh the cost of developing and maintaining your own app.
 
It should go without saying that in this digital age, for QSR, Fast-Casual, Juice/Smoothie and Coffee concepts, to name a few, it is almost expected to have an app or other online ordering platform to order ahead. By doing so there are a myriad of benefits to both customers and the restaurant. For customers, it reduces wait times – your order will be prepared while you’re on your way and you skip the line when you get to the restaurant - and it improves order accuracy as customers are in control of what/how they order. For the restaurant, this should improve efficiency and increase sales. With that said these are only benefits if the restaurant is staffed, and the employees are well trained. From a personal experience, as I travel a lot, I tend to use a well-known coffee company app and I am continually frustrated by the length of time it takes for my mobile orders to be prepared. It’s a constant mental struggle on how early to order – if I order too early, and if the restaurant is their game getting product out quickly, my coffee will be cold when I get there - however, if I don’t order early enough and the restaurant is not on their game, I may be waiting for my order, thus defeating the purpose of ordering ahead. 
 
Increasing Customer Engagement:
A robust app can increase customer engagement by helping you stay in touch with your customers and consequently building a better relationship with them. An app can easily assist in - communicating the opening of new locations, announcing current specials or seasonal promotions, sharing company news, holding contests, running polls, or even soliciting customer feedback. 
 
Some must haves that will build engagement are the forementioned mobile payments and online ordering, the integration of Table Reservations (if it makes sense for your operation), the integration with your social media, the ability for online food tracking, and location-based services such as geofencing and beacons.
 
Mobile apps also allow for greater chances of upselling a customer. As marketers we can easily analyze our menu and customer ordering habits and make relevant recommendations to customers when they order certain menu items. I.e., if a customer orders a burger you can naturally upsell them to ordering fries with that burger. 
 
Additionally, with geofencing you can invite customers, who have the app and are near your location, a special offer thus increasing the likelihood of them visiting that location. 
 
Building Brand Loyalty
On average the adoption rate of a traditional loyalty program is about 12%, but when an app combines mobile payments, online ordering and a loyalty program, adoption rates can be as high as 35%. And with greater adoption, you have greater frequency.
 
Mobile apps also give you the ability to target more value-seeking customers by allowing app exclusive promotions and in essence creating “digital value” to those who have and use the app. A recent survey showed that nearly 50% of Gen Z and millennial consumers are using digital couponing to combat inflation. A digital platform allows for more flexibility in targeting promotions to generate customized options for consumers. Having this ability will drive traffic without offering margin-busting blanket discounts. 
 
There are also cost benefits for having an app. Imagine converting customers from ordering on delivery platforms to your own platform/app? By doing so you can improve margins and pass some of those savings onto your loyal customers with targeted promotions. 
 
You can also use your app to personalize deals for customers. For instance, if a customer hasn’t ordered for a while, you can analyze their ordering history and remind them of their favorite dishes by using mouthwatering photos and possibly offering a discount on that item.
 
Building brand loyalty does take time for restaurant apps. Restaurants should go beyond offering a promo code for the customers first order and extend the offer to several subsequent orders to gain traction and loyalty. This may seem like a lot of discounting, but in the big picture it is not. Loyalty brings frequency and will help your business grow in the long-term. 
 
Finally, as you try to grow and leverage your app, you can use your loyalty program to reward loyal customers for their referrals. It’s a great way to acquire new customers.
 
So, are you ready to get Phygital? Matrix Restaurant Consulting is here to help bridge the digital and physical experiences that will work best for growing and evolving your business.

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