Hesitant about using AI? Here are some ways to leverage AI without it being customer-facing and risking public backlash.
At this year’s FSTEC, restaurant leaders are advised to “proceed with caution” when it comes to cutting-edge innovations like voice AI, automation, ChatGPT, and more. Correctly so, as strategic decisions shouldn’t be dictated by “what’s cool”.
As Freddy’s Frozen Custard and Steakburgers’ VP of IT, Sean Thompson, pointed out: “Yes, we’ve leaned on tech to help out with hiring, staffing, and even back of house production, but we always know what our core values are and make sure the technology is enhancing that. We’re not chasing the shiny object.”
Several brands have tried to roll out AI voice for drive-thru or phone ordering, and have since rolled it back due to unforeseen friction in the guest experience. Other eye-catching technologies – such as automation – require heavy investment and risk to implement, and might only be truly doable for the likes of Chipotle and Sweetgreen.
Does that mean most restaurants can only sit on the sidelines and watch? Absolutely not. The often-overlooked, non-invasive technologies are the ones that can help your brand gain a significant operational edge.
Let me break down a few for you.
1. AI for Menu Optimization
Having a profit-maximizing, operationally feasible, and loyalty-inducing menu is foundational for a successful restaurant brand.
However, such a resilient menu is tough to attain when brands look at only sales composition and anecdotal guest feedback to understand how well each menu item performs. That’s really only a small portion of the picture.
Because restaurants often have little bandwidth to dedicate to comprehensive menu analysis – collecting and combining sales, satisfaction, and operational metrics together – AI can make all of the difference.
It also enables you to understand more advanced metrics, such as Operational Resilience (i.e. measuring the extent your kitchen staff can flub an item’s execution and still maintain a five-star overall experience) or Incident Involvement Rate (i.e. measures to what extent is a menu item the culprit of a bad guest experience).
By using AI to dissect your menu analytics, you get richer insights and can discover new ways to increase future revenue and minimize operational costs.
2. AI for Operational Improvements
Restaurant operations are incredibly complex. With a thousand moving parts, many restaurants can’t break out of the cycle of mediocrity because they’re trying to focus on too many things at once.
AI can help streamline the manifold chaos of a restaurant’s operations into an organized list of priorities that will have the biggest impact on overall guest experience and revenue. At the end of the day, it’s not about how many things you work on, but rather which one you should work on first.
So, rather than doing quarterly or annual analytics deep-dive, use AI to help you generate real-time insights. Start by collecting granular, actionable guest experience data that breaks down operational categories (e.g. Food Quality, Speed of Service etc.) into underlying factors (e.g. Temperature, Locating Pick-up Location etc.). With this data, algorithms can instantly help you figure out which categories and factors have the highest impact on overall guest satisfaction.
With Tattle, for example, AI will break down such insights by ordering channel, daypart, region, location. This means your General Managers, Franchisees, and Regional Managers can simply login to the dashboard daily to see what they need to focus on, aligning the team’s efforts knowing that their area of focus will certainly improve guest satisfaction and retention.
3. AI for Guest Churn Analysis
We all know that it’s more costly to acquire a new guest than keeping an old one coming back (in fact, 5x more).
While there’s no magic wand to make all your customers stay, AI can predict which customers are most likely to churn. For example, AI can segment your guests by the feedback on their past experiences, and predict how likely they’re to return during different dayparts or even ordering channels. This gives your marketing teams the ammunition to personalize marketing campaigns to them – such as when the best time to reach out is, or what the most effective type of promotion is to present.
Another example would be to group your guests by projected lifetime value (LTV). Based on a guest’s past satisfaction, order frequency, basket size, and more, AI can model someone’s projected LTV faster and more accurately, enabling you know which guests your team should focus on retaining. This will significantly lower your customer acquisition costs over time.
Currently, there are many big AI bets that can hurt your operations and guest experience, but these three will run silently in the background and be far more insightful than anything trendy or public-facing.
If you want to understand how Tattle is doing these – extracting menu-level and unit-level operational insights for nearly 10,000 restaurant locations worldwide – check out our platform here.