With the restaurant industry reporting revenue losses from no-show bookings, could SMS be the answer to empty tables?
The Guardian’s resident restaurant critic, Jay Rayner, recently included a short but important story in the ‘News Bites’ section at the end of his latest review: “Restaurant no-shows have become a serious issue in the industry.” Writing that an Edinburgh chef has introduced a deposit scheme for tables, one may think that this is a little drastic – but his business had suffered a staggering 450 no-shows in a month. Rayner goes on to report that the Casual Dining Group, who own national chain brands such as Bella Italia and La Tasca, are also considering taking deposits for large group bookings.
The issue with no-shows is particularly problematic for those in the restaurant business because it is not simply a case of ‘nothing lost, nothing gained’ – when a group books a table it prevents other diners from being able to book also, so by not turning up to a booking a restaurant has lost out on profits which could have been made from other potential diners.
But where does this issue of no-shows come from? It can be difficult to pin down a specific reason for a no show as culprits either forget to cancel back-up tables or to simply inform the restaurant of a change in plans.
The Issue With Deposits
It would seem that many restaurants, be they small independents or large chains, are turning towards a deposit scheme of some form – whether this be a payment taken in advance, or card details taken upon booking as a deterrent to diners who do not show up. For those who have already suffered significant losses through no-shows, this dramatic solution may seem to be the best option, offering at least some form of financial safety net.
But deposit schemes may not be the ideal solution, as they can come with a PR set-back. Some may be put off from booking a table in the first instance if they learn of the need for deposits, and will simply search for and choose a competitor establishment who does not demand some upfront payment. Some may worry about when and how they will receive their deposit back when they do show up – will it be immediate when they turn up or will they have to wait longer, or will it be taken off the bill (less than ideal if one person pays a deposit for a table which plans on splitting the bill)?
SMS – The Solution
For those looking for a more customer-friendly means of preventing restaurant no-shows, SMS confirmations and reminders could present the ideal solution. Rather than risking offending or worrying potential customers, SMS reminders can be perceived as helpful, friendly communications from businesses looking to check in with customers to ensure that they are still interested in their previously placed booking.
The strategy can be two-fold: an initial SMS sent upon booking with dates, times and numbers which will ensure customers have the details of their booking on their mobile device to look at any time; followed by a second reminder SMS a day before the booking is due to take place.
Restaurant businesses do also have even more options – they can include a keyword for customers to reply with to cancel the booking simply and easily (for example, reply ‘CANCEL’ to 60777) if the reminder has made them realise that they can no longer make their table or they can ask customers if they will still be making their table where users can reply ‘YES’ or ‘NO’ (with a further reminder if users do not reply, advising that the table will be cancelled if they do not confirm). There is also an option to include a link for a mobile web page where customers can amend their booking if they need to change the date, time or table size.
Our own state of SMS research highlights how SMS is becoming increasingly important to the restaurant sector. Figures show that to prevent no shows and develop relationships with customers, restaurants are increasingly turning to the platform that delivers a message directly into the hands of their customers. The service is proving so popular that experts now predict a further 30% growth in the use of SMS by restaurants by 2020.
If you are interested in finding out more about how SMS could be your restaurant business’ most customer-friendly booking solution, contact me on 01244 752299.