Restaurants Not Leveraging Loyalty, New Study Finds

| April 01, 2007

Just 39 percent of respondents to the 9th annual Restaurant Industry Technology Study are currently operating a guest loyalty program, a trend that's been static for the past two years running, and one that shows both a challenge and an opportunity for the restaurant industry.

The study, published by Hospitality Technology in conjunction with the University of Delaware, scans the overall environment of IT in the restaurant industry to uncover macro trends. This year, the study also evaluates trends specific to type of restaurant (QSR, family/casual, and fine dining) and to size of restaurant (in annual revenue) in these IT areas: IT investment culture, integration strategies, POS systems, loyalty and CRM, electronic payment processing, gift cards and networking.

"The trend in loyalty programs indicates that restaurant companies do not seem to recognize this powerful marketing tool," notes study author Dr. Cihan Cobanoglu, Ph.D., CHTP, assistant professor of hospitality IT at the University of Delaware.

This lack of interest in CRM and loyalty applications can be attributed in part, according to the study, to the fact that these implementations require much more than software installations. They require strategic involve-ment throughout the company. "Every employee must be involved with CRM initiatives, including top management and entry level employees," Dr. Cobanoglu asserts. Without this involvement, failure is far more likely to occur.

The good news, however, is that CRM features are tracking higher than ever before on the list of features important to a POS system. This year, CRM was one of the top five most important features, indicating that such applications are gaining in importance and priority.

The study also reveals a positive trend in the amount of business transactions restaurants are conducting with distributors/manufacturers over the Internet. In 2002, 46.2% of respondents indicated that they did no business transactions over the Internet with their distributors/manufacturers. This number decreased to 8% in the 2007 edition of the study.

A complete copy of the Restaurant Industry Technology Study is available online at www.htmagazine.com . For hard copies, call 973.252.0100.

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