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I officially have conceded to the app developers and the contra-browsers mavens that are developing so many different ways to do the same thing, that I have lost not only count, but interest. Do we really need fifty mobile social networks that all do the same thing?

 

The market is confused and when there is confusion, things generally slow up. Like the weather in Chicago…”if you don’t like the weather, wait a minute, it will change”. With this level of innovation, no one can make a decision. Why would you, if a newer shiny penny is coming out every day, why choose?

 

Here is the problem:

1. Too many dumb ideas. Venture capital is fueling far too many app developers with $100,000 to $250,000 and not building businesses. The VC “Flippers” are a new breed of investor, seemingly more interested in M&A than market intelligence. The buzzwords flying around Silicon Valley are dizzying.

 

2. No domain expertise. I haven’t met very many. Wait. I haven’t met any social web app developer older than 30. And, none of them have any experience beyond tending bar or waiting tables. But, they are creating apps on the fly to solve location based marketing challenges that really don’t even exist. Then they call us and say “wanna partner?”

 

3. Loyalty and rewarding such has been around for decades. So, mashing up social currency+geo+mobile+reviews+ratings+bookmarks+points+reservations+games+
promotions+events+directory does not make a better product. Restaurant operators are still getting use to email marketing. Just because you can integrate the kitchen sink into an iPhone app does not make it a good idea. Remember market intelligence? First, find out who your customer is? Then, ask them a question to see if you are solving a problem or, creating one.

 

4. It’s still quality over quantity. I know this flies in the face of, well, Facebook. But, really, does anyone really need to be connected to 5,000 followers, or 500 friends you don’t know? Even businesses, in many cases, can’t manage this. It is far, far better to have a smaller, more active affinity group that actually knows your brand and is interested in being connected to it.

 

The foregoing begs for some sort of clearing house for social web application reviews, use cases, opinions, and ranking. I would create it, but frankly, by the time I did, I am certain a VC-backed app developer would launch one and there would be 50 new versions of a central navigation point for social apps the following week.

 

We need tools and we need connections with our customers. As a former business partner of mine once said “I like steak. I had steak last night for dinner and I had steak for lunch today. I don’t need any more steak.”

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Comments

  • Excellent points, Eleanor and Matt. The restaurant business still operates one day, one guest and one experience at a time. Acquisition should always be part of any marketing strategy. However, once in the four-walls, it's up to "humans" to deliver and serve. Keeping a customer loyal requires far more than a coupon.
  • Great comments! So sad that some things seem to never change. We are still looking for the short cut and easy fix. We can use every gimmick out there to get guests in the door. But as long as we are depending on humans once guests arrive we are doomed. UNLESS we do the hard work of really investing in them.  When are we going to learn to train, develop and truely invest  in our staff; long-term, on-going & everyday. Now more than ever they need us and we certainly need them. Make the investment in your humans!!!!
  • Good stuff of course and likely balance is the the ideal - I have just never seen it happen in a balanced way. The media attention on social media outweighs most retention techniques...hence the airwaves would suggest social media as the only right thing to do. I simply think it is attacking the wrong problem ie. its trying to increase acquisition, yet the restaurant problem is defection. Shameless plug but this is why we set up our business - to provide in restaurant feedback, analytics and alerts via mobile so the business can fix the issue, salvage the customer and deliver on the offer.
  • Good comments, thank you.

    Restaurant operators are no different than any other business. All businesses should focus on (1) Knowing their customer better and servicing this relationship, (2) Rewarding this customer and their loyalty to sustain this relationship, (3) Readily and easily activate this customer, such that they refer another to your business. Social networking, where we collectively spend more than 110 billion minutes a year, is a channel from Heaven...if we want it to be.

     

    Matt makes a very good point about making sure your business is operating in good form before you socialize it. Social media will just amplify your issues...if you have operations, food or environment issues. However, if your four-walls are clean, Jim M. is correct, provided there is thinking before executing. Social media deserves strategy. Properly executed, as part of a digital media strategy, monitored then measured, it can produce amazing results.

     

    In the past 7 days alone, I have been approached by several Location Based Services (LBS) using a wide array of integrated technologies, some novel. Some of their business models have way too much friction for easy adoption by retail, or restaurants. Too many pieces needing integration or adopted by both business and consumers to find viral adoption. And, most still approach the market before truly talking with the merchant. From my seat, if I was to create a social media application designed to connect, engage, activate and reward my customers, I would want it to be a utility that works FOR the business before offering it to the consumer. Why? If the business can understand the use case and sees the value proposition (utility + ROI) for their business, they will help sell the value of the app to their customers.

     

    I truly do love all this stuff and find it equal part fascinating and frustrating. We are indeed in a period of technical innovation and rapid deployment of "quarter-baked" ideas. The better ones and more useful ones will rise to the top, they always do. But, restaurant operators are slow to adopt technologies in the first place and shy from rapid deployment of anything. I also agree with Rod, the consumer will decide for us...while we, as operators, help beta test.

     

  • Matt: As we have discussed in the past, guest retention is not one of our stronger suits in FS in comparison to other industries.  However, if used properly, an integrated social media movement will facilitate a way for all of us to get closer to our guests and build long-term retention.   
  • Nice post - a real emperor has no clothes moment. It seems that much of what is done by companies is tactics in search of a strategy and even more alarming is being used as a grander coupon distribution system. If the business has a customer retention issue to begin with, social media will simply drive more people in for a first time purchase at a lower margin only to never return and then use social media to potential destroy the reputation of the business. Agree with Todd - much better to focus on relationships and retention to generate cash
  • Nicely said Michael.  It's a business nightmare trying to keep up.  Not only do we have to adjust the CSS for IE 6, 7, 8, 9, Firefox, Chrome, and Safari...add in Android, Iphone, and Blackberry and it's a total mess just to update your user interface.  In the same way that Google ruined the internet by making it financially viable to put up 1000 websites with SEO optimized content about a single keyword that requires you read through 100 ads disguised as useful links to find the answer to your question, Apple is littering the development world by making it easy to roll out an app.  The simple fact about mobile is that it is an inferior interface based on screen size.  Given the opportunity to do anything on my computer (where I spend way too much time) or my phone, I'm choosing the computer.   I'll even wait an hour to do it when I get home.  Minus games, which feed a market of people with too much time, mobile has only 2 real advantages...mobility (duh) and GPS location.  You can do a lot with those, and I'm sure it's lead to a couple thousand apps out of 100,000...but the rest aren't going to be the equivalent of a dead webpage in a year or two.   It's way too much hyp.  Even Open Table (our monopolizing competitor) whose app is probably the most widely accepted and potentially useful app on the market next to Google Maps, only gets 10% of their booking from mobile.   For them it make financial sense.  For Reservation Genie, well it's starting to make sense too.  Apparently our bell hops want to make money booking from their phone.  And I'll admit, we're adding a gaming layer too.  But these are compliments to a well functioning online service, not the cornerstone of our game plan.
  • I agree with much of your posting, lots of folks trying to figure out how to leverage social media, smartphones, NFC, loyalty, and/or mobile payments for their own benefit.  Unless they rub some of the dollar signs out of their eyes so they can get a clear vision of what the market is looking for, they won't be here 2 years from now.  The focus should be on the relationship between the operator and the consumer.
  • Solid post Mike.  Yes, apps are out of control right now.  When are people that are developing all these apps going to realize people are going to say "No Mas, No Mas."  I cannot put my hands on a study I read when Coke introduced its 100 flavor machine.  Consumers are not good when it comes to too many choices.  With apps we might download, use once or twice or what ever, but then move on.

    Lisa: The gamification element will keep the VC rolling targeting the younger crowd.  They need their entertainment.

    Rod: I agree with you since social media is all about sharing information so people will work with those tools they are most comfortable with that they have had success sharing with their tribe.

     

  • Michael...yesterday a presentation by Rob McMillan of Silcon Valley Bank splashed across the Internet that supports your ideas...but wait....if you are involved with 5000 people for the purpose of doing business but never interact with a single one, will anyone hear the big "THUD" when no sales are reported?  Yes the number of apps and social networks are overwhelming and mostly useless.  Hopefully businesses will concentrate on the few more developed one and learn that using the same approach as they did for radio, TV, print material, billboards (etc) is not going to work.

     

    People are rushing to distance themselves as quickly as possible from the advertising/marketing spin of their daily lives...moving those very same messages will get deleted as quickly as we click the remote button to flip to another channel that isn't playing the same tired old ad for the millonth time.  

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