Guest Text Pagers: ROI Analysis

Dec 9, 2011   //   by admin   //   Virtual Queuing Systems

Guest Pager System technology has evolved beyond the Coaster Pager to what is now known as the “Cell Phone Pager” or “Restaurant Text Pager”.

Savvy Restaurant managers, hotels operators, health care administrators as well as retailers are now realizing the efficiency and communication power of the mobile phone in terms of a guest services tool that can enhance operations while keeping costs down. What makes this possible is the proliferation in mobile phone users and the advances in hand set technology i.e. smart phones, SMS, MMS, email, the mobile web and of course mobile applications (thanks to Apple). That fact that so many people have mobile phones means just about everyone has their own cell phone pager, another words the business owner no longer has to invest in costly pager equipment ($2000 – $6,000) in order to notify his customers.

The purpose of this White Paper is to explore the practical applications of Cell Phone Pager or Restaurant Text Pager system, to evaluate their return on investment and speculate as to the future of the guest pager.

CELL PHONE TEXT PAGER UTILIZATON & PENTRATION

According to Mobile Trendz , there are over 4 billion people with cell phones, 5 times more mobile phones than laptops and computers, 272 million mobile subscribers in the U.S. 91% of them keep there phones within three of themselves 24/7. 76% of the cell phone users actively text messages with an open rate of 95%.

BENEFITS OF CELL PHONE PAGER SYSTEMS

The benefit of cell phone pager system vs restaurant pager system is as follows.

  • Start up costs can be reduced by about 75% (from $4000 to $200)
  • Pagers loss will be decreased by greater than 100% ($70 to 0)
  • 8 out 10 guest have a guest pager system with them i.e. cell phone
  • The ROI is less than 12 months
  • The best cell phone pager system bundle the wait list cue, call a head seating and voice / text guest notification
  • No server or software to load or maintain on your PC or network
  • Guests have the ability to respond to the page when using a cell phone (i.e. click to call)
  • Guest appreciate the freedom
  • Sanitary and reduces the spread of influenza, H1N1 and staff baterica
  • All inclusive tech support, customer support and upgrades

MEETING CONSUMER EXPECTATIONS

Waiting in ignorance creates a feeling of powerlessness, which frequently results in visible irritation and rudeness on the part of customers”. According to author David H. Haister, at the Harvard Business School.

Guests, customers and patients all hate to wait. When Motorola invented the first pager for restaurants back in 1995 it was a break through in guest services management. When guests, patients or customers know they will be instantly notified when it’s their turn minimizes anxiety associated with waiting, and or the fear of losing his/her place in line reassures the consumer they are important and still in control. The success of guest pager systems in the 90s spawned a multimillion dollar industry focused on managing the guest’s expectations while waiting.

Consumer Perception of Guest Pager

Consumers expect great customer services, and expect to be seen by the doctor or seated at their table the moment they enter your office or restaurant. They don’t like to wait nor be herded like cattle at your entrance with or without a restaurant pager. Guests today find pagers annoying and antiquated. It reminds them they are waiting and are now required to hold a big, dirty pager that has been handled by the last 10 people they don’t know right before they eat. This became a prevalent concern to restaurants, blogs and the public health officials during he Swine Flu epidemic of 2009. The Max Restaurant Group who we developed Mobile Matradee® for wanted a clean, cost effective and classy guest notification system.

Consumer Acceptance of Cell Phone Pagers

There is a correlation between the length of the wait time and consumer satisfaction. The longer the wait the less satisfied the guest is. My observation has revealed the mobile phone, particularly feature phones and smart phones keep guests distracted while they wait. Many guests, while waiting, tend to talk, text or play on their cell phone making the transition away from traditional guest pagers to restaurant cell phone pagers a natural evolution. According to restaurant owner Phil Conti of Paitti Restaurant Bar and Grill. “Everyone has a cell phone and everyone is either looking at it or talking on it, especially with unlimited text and voice plans.”

ECOMONICS OF THE GREAT RECESSION

As a result of the “Great recessions” restaurant owners are struggling to maintain a competitive advantage over their competitors. Those restaurants that are lucky enough to have a wait list understand how critical it is to assure a positive guest experience right when they walk through the door. Guests have less patience and more options and will likely leave if the restaurant wait list is not efficiency managed. This has a two fold effect 1.) unhappy guests leave for the competition and 2.) are likely to walk off with the coaster pager. At an average cost of $70 per pagers x 3 or 4 per month this can add up quick. It’s not uncommon for a restaurant to spend $2,500 a year in pager replacements. With most restaurants losing money or realizing sharp decreases in their margins pagers are no longer a “necessary evil’ they can afford. According to my interview with purchasing manager of small and large chains, such as Ruby Tuesdays, they are discontinuing restaurant pagers, while others are reverting back to the old way of notifying guests. Most of these alternatives are not as efficient or have negative consequences, such as the disruption of overhead paging or adding additional host staff to track down guests. Guests once again are no longer tethered to the host increasing anxiety and diminishing the guest’s experience.

CBA / Cost Benefit Analysis of Restaurant Text Pagers

Although expensive, the restaurant pager systems developed in the 90s are simple to set up and simple to use. According to LRS, the standard restaurant pager system will come with 20, 30, 40 or 50 pagers depending on your wait time. The average costs for a restaurant pager system can range from $2,500 for 20 pagers to well over $5,000 for a 50 pager system. Determining the number of pagers you need can be tricky and you always want to have enough but each additional pager can cost up to $70. A common frustration is having to replace missing pagers, not because they break, the guest usually walks off with them. Cited: LRS White Paper

The return on investment from using cell phone paging, system startup costs are reduced by up to 30% because fewer pagers are required. By using fewer pagers, restaurants will lose fewer pagers, thus saving them money over the life of the system which is typically 4-5 years. In many restaurants with waiting times that average 45 minutes, the loss rate is about 1-2 pagers per month. With an estimated cost per pager of $45, this will break down to $90 dollars a month or more that could be saved if the restaurant could use cell phone paging and a smaller number of pagers per system. In order to utilize cell phone paging, a broadband internet connection is required at your hostess station. For most, this expense is already built in to the overall networking cost of your restaurant so no additional costs are required. Here is an example of the standard ROI in a restaurant with a 60 minute wait. Turning tables – if you could turn on average another 2 parties per night through the restaurant that goes on a wait 2 nights per week then in one month you would turn 8 parties. If your average 2 party ticket is $30.00 then you would see a sales increase of $240.00 per month or $2880.00 per year. Losing Pagers if you could reduce the amount of pagers being lost by 2 pagers per month than you would benefit from a savings of about $80 per month or $960.00 per year.

Upfront capital expense costs – When you purchase a system for a restaurant that is on an hour wait then the standard is to order 40 pagers. With the average cost of $40.00 per pager the restaurant if using cell phone paging could order 40% less pagers which is 16 pagers times $70 each which equals $640.00.

The ROI can be seen both in the upfront savings as well as monthly and yearly. If you are on a wait and have a restaurant then having a guest paging solution to manage your wait is essential and if it has the capability to do cell phone or text messaging as well then that system will give you the flexibility and functionality that will be the most effective in running your wait. Work Cited: LRS White Paper Cell Phone Pagers
According to Dave Hartman, restaurant consultant, “the typical restaurant only uses their guest pager system two maybe three times a week, the balance of the week it sites on a shelf. The bottom line, restaurant pagers are a necessary evil to optimize your wait list but with the added features bundled with Mobile Matradee Presentation your host staff can actively manage the wait list or reservations from a laptop or iPad or even a smart phone. No more grease pen and paper. Some of these systems provide great analytic packages.”

SMS TEXT MESSAGE MARKETING

The value added benefit of cell phone text pagers is the opportunity to harvest guest cell phone numbers for a permission based mobile marketing campaigns. Houlihans, Brinker International and many other restaurant industry leaders have been cashing on the mobile marketing phenomenon. Innovators such as Mobile Matradee, Text2Table for instance are mobile technology firms that specialize in developing mobile marketing solutions, applications, mobile websites and mobile marketing campaigns. Unlike the traditional pager industry these small dynamic firms bring a lot more to the table, according to John Barker, President of iT-Worxs, LLc, an IT development company specializing in interactive technology development. For more information check out “Guide to Great Restaurant Marketing Ideas”

Brandon Munson is the founder of Fulcrum Design, LLC, the developer of Mobile Matradee®, the best of breed cell phone pager solution for restaurants, retail and health care. Fulcrum Design, LLC, mobile marketing solution is Mobile VIP®, a robust mobile marketing application used by small business to large advertising agencies to drive ROI using mobile marketing technology and strategies.
On the web at http://www.fulcrumdesignllc.com, http://mobilematradee.com
and http://www.mobilevipbiz.com and our video Mobile Matradee Video

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