Direct communication with customers

Some of the service providers are taking in their hands the communication with the customers on behalf of the restaurants, operating as an intermediary. These are companies owning an online marketplace place and their strategy presents some benefits for the venues, but generally includes also many negative sides. The problem is the fact that when online users want to make an online reservation, they find first the marketplace website on the internet, instead of the venue website because these companies invest a lot of money in promoting their platforms. Thus, when customers make reservations through the online platform, in reality, they communicate mainly with the platform brand and not with the venue. As a result, some statistics show an increase in no-shows when it is about reservations made through an intermediary. The clients don’t have a direct connection with the venue and therefore they don’t feel engaged to call and cancel the reservation.

Moreover, it happens also the following paradox – many users have the intention to use the marketplace when making a reservation for a specific venue but subsequently they choose another one because the last one is promoted and more visible than their first choice. This way the venue is losing a potential client because the provider is promoting another restaurant that is paying for that. The promotion can happen in different ways as providing a positioning at the top of the search results stimulating online users to make a reservation at specific venues giving them loyalty points etc.

In this regard, the venue is losing direct contact with its customers, as well as the opportunity to freely use and interact with its brand. The control remains in the hands of the intermediary, who decides where to forward the traffic (according to their financial interests) without considering which specific venue was intended at the beginning of the reservation.

Customer database and relationship management

Customer relationship management is an important part of the reservation system and when you are about to choose one for your restaurant, you need to be sure that it includes the necessary functionalities. Some of the reservation systems on the market, don’t offer such options, or if they are included, they have basic characteristics. In the best case, you will find a system with a dynamic database, which allows you to archive all the information related to the clients and their reservations, as well as subsequently use these data automatically for new reservations, analysis, and business forecasts. Check if the database allows the information export in a user-friendly format (.cvs, xls и др.) because this is an important condition to have control over all the information you gather and use it with external analytical software. This is necessary also in the case in which you want to pass to another booking system. Then you need to transfer all the present databases. However, many providers don’t offer such an alternative trying to stop restaurants from passing to another reservation system.

Also, as was mentioned in another paragraph in this article, some booking apps have only basic functionalities because of the lack of product investment and optimization. In this relation, the customer management tool is not well developed because the companies promote more their online marketplace.

Increase sales by attracting new potential online customers

Last but not least, it should be considered the question of the venue website positioning in the search results of search platforms such as Google. Good positioning under the needed keywords is very important for the online traffic generation to the website, i.e. for eventual reservations and sales. When the restaurant uses a booking system as part of an online marketplace, there is a conflict of interest between the venue and the service provider. They are entering competition in the search results when a user is searching, for example, using as a keyword the venue brand name. The online marketplace, mostly the international ones, have partnerships with Google, Bing, Yahoo, Trip Advisor, and others which makes the venue page in the marketplace rate higher in the results than the own website, which means a higher probability of being chosen by the user. Thus, the platform becomes a monopolist for online reservations and after a venue is registered there, the probability of attracting online users to its website is minimal.

The real problem here is that, in most cases, the price that the restaurant pays to the provider for a reservation made through the marketplace is higher than the price for the one made on its website. In this regard, the restaurant is in a situation to pay higher fees per reservation because the whole online traffic has been forwarded to the marketplace. This situation is more negative for big brands where the probability that users are searching on Google directly by using their brand names is higher. However, instead of finding the venue website to make a reservation, they find first the venue page on the online marketplace.

How to choose the best pricing offer

The main difference in the pricing offers is based on the fact whether or not the service provider manages an online marketplace.

If yes, the prices are linked also to the usage of the online platform, not only to the booking system. There is a fixed monthly fee for the venue's presence on the marketplace in addition to a commission fee paid for each reservation or each attracted client managed by the booking system. This way, no matter if the restaurant has a real benefit from its marketplace presence, it should pay both fees. As has been already said, not always this presence is useful for the venue because of a possible conflict of interest or because of the necessity to pay additional advertising fees to get the necessary visibility and online traffic. This is to say that the fixed monthly fee doesn’t guarantee always visibility and reservations.

At the same time, providers, who offer as a main product a booking system, generally apply only a fixed monthly fee without any additional commissions per reservation or attracted client. The restaurants pay only for the concrete service use.

The conclusion after the review of the main offers on the market is that restaurant owners who search for efficient solutions for their businesses have to do detailed research of all parameters and functionalities of the reservations app to choose the corresponding to their needs and expectations. It is important to take into consideration all advantages and disadvantages to manage successfully customer relationships and business activities.