Solving for Inefficiency
First there was dine-in. America left home for a destination meal.
Then a smart operator thought of maximizing asset utilization. “We have an asset that isn’t currently being maximized. We can increase our output, without increasing the dining-room capacity, by allowing the kitchen’s capacity to drive productivity in my restaurant.”
Take-out was born. This new distribution method allowed restaurants to become relevant for in-home and off-premise occasions, and thus increase sales.
As a natural extension of take-out came the drive-thru; perfectly suited for a rushed occasion where the driver either did not have the time to come into the restaurant or wanted to pick and eat on the go.
Delivery was next in the line of restaurant occasion evolution. Now driving was not even necessary to eat your favorite restaurant’s food. But with all this evolution into new occasions, something was lost.
In 2000, during my days as the VP of Marketing and Operations at Papa John’s, my team realized that there was a major inefficiency in the restaurant system. We realized that the phone ordering process, the first step in any ordering for the brand, was completely broken.
I put myself in the position of a customer to understand the break-down in the guest’s experience. I started making numerous phone calls to various restaurants and placed orders for take-out and delivery food. I could very easily mistake any of the pizza delivery brands name to be “Pizza Hut Hold Please,” “Domino’s Hold Please,” or “Papa John’s Hold Please”, as all pizza places greeted my phone call the same way: “Welcome to Pizza Hut, hold please.”
After a basic analysis of the phone ordering system I concluded that for any phone order, the consumer felt a total lack of control stemming from the following three inefficiencies:
- The order takers could put the me on hold any time they want, with or without my consent.
- During the ordering process, I was always worried about getting dropped from the call in one of the “on-hold” moments. Getting dropped from the call meant I would have to call again and be put back at the end of the line.
- Finally, when the order-taker asked what I want to order, I did not have a menu in front of me. It is tough to order when you don’t know what the restaurant offers.
This “observe and learn” process made me realize how tough it was to place a simple order for carryout or delivery. It was a major inefficiency experienced by customers like me in more than 50% of restaurant occasions.
As the Papa John’s team tried to solve the inefficiency, I realized that the solution must result in giving the control back to the consumer. The solution for this inefficiency came in the form of online ordering. The consumer got the control back and was unrushed as they accessed the menu in a self-paced environment. Every step of the online ordering tool was developed with one vision in mind, “how can the consumer win using this process?” As we started to build the process, we realized that other brands were trying “pseudo-online ordering processes”. I called it pseudo as these brands were replacing fax-ordering with online ordering, but the orders were not going directly in the point of sale system. Instead the orders had to be manually processed. This meant that even though the consumer got a better interface, there was a high rate of failure in the process.
THE IMPACT OF ONLINE ORDERING:
All previous channels (dine-in, take-out, drive-thru, and delivery) were born as restaurants were trying to expand into newer occasions. This was the first time a new channel (online ordering) was born into the process for the purpose of solving for customer inefficiencies.
Solving for the inefficiency got expanded to a bigger consumer benefit. As a consumer, I no longer needed to remember or look up the closest store’s phone number before placing an order. Now, wherever I was, I just had to go to the brand’s online ordering site. Like magic, the restaurant finds me and delivers food to me. Restaurants became more convenient to a customer. To me it felt like my personal store followed me as I traveled freely.
Restaurants have been rewarded for solving the inefficiency. The big three in pizza have each raced to close a billion dollars in online business and most fast casual restaurants are introducing online-ordering. What started as a simple solution to a broken phone ordering process has resulted in one of the fastest growing, and most profitable, channels for the restaurant industry.
THOUGHT STARTER FOR YOUR BRAND:
When was the last time you observed and reviewed a guest’s experience with your brand?
When was the last time you observed and reviewed a guest’s experience at your competition?
What is the big inefficiency your customers are facing day to day?
How can you be the leader and solve for the inefficiency (and of course, in the process be rewarded handsomely)?