Forward bookings in simpleERB

In our latest release (15.5.1) we have one feature that we would like to talk about in more depth. This is “Forward Bookings”. It is a simple report but we think it could be very useful to you in your planning.

It allows you to compare your forward bookings for a period on a given date, usually “today”, with your forward bookings for the same period last year, or in previous years.

An example would be:

You are doing your planning for Xmas, what extra staff do you need, how many Xmas crackers to buy etc.

You can now create a report which shows you how many covers you have booked as of today, for the period 01 Dec 18 to 31 Dec 18 compared to the forward bookings you had on this date last year for the period 01 Dec 17 to 31 Dec 17.

So if you see that you only have 85% of last years bookings, then you now know that you probably need to do some extra marketing, create special offers in simpleERB and email them to your customer base.

If however, you see that you are 25% up, then you will need to recruit more staff than you had last year and certainly buy more Xmas crackers!

As a next step you can look at your cash position in the previous period and make informed estimates as to what it will be in the coming period based on the data from this report.

You can get the report here if you are a simpleERB user



If you are a simpleERB restaurant, under the GDPR regulations you are the “Data Controller” and we are a “Data Processor” for you.

(If you use an email programme like MailChimp to send marketing emails to your customers, then MailChimp is a “Data Processor” for you as well.)

The ICO (@ICOnews)  have produced a useful  guide for small businesses.

You can get it here 



Hi, this is the blog for simpleERB. We mostly blog about restaurant reservations and restaurant “customer relationship management” but we like to do foodie stuff as well.

simpleERB solves lots of problems for restaurateurs, probably more than you imagined! Like “How to get a better price for your restaurant when you sell it.”

You can see a collection of them here.

Plus, get your free Ultimate Guide to Restaurant Marketing here, an actionable 93-page guide to make you a restaurant marketing master.

Or go straight to our sign up page for a free trial here

(No credit card required.)

Enjoy! And may all your customers be nice ones.

 

The simpleERB Team.



black jeans on waitress

black jeans are uniform but not tax deductible

43 businesses in the hospitality industry featured in the Minimum Wage Blacklist,  including names like TGI Friday’s and Marriott Hotels. Around 9,200 workers will receive £1.1m in unpaid wages, and the employers were slapped with £1.3m in penalties.

UK Asian food restaurant Wagamama topped the list, repaying an average of £50 to 2,630 employees. The Wagamama case, however, is interesting for another reason, however.

A spokesperson for the restaurant chain blamed its underpayment on an “inadvertent misunderstanding” of how minimum wage laws apply to staff uniforms.

Front-of-house staff are required to wear black jeans or a black skirt with their branded Wagamama top. The government considered this asking the staff to buy a uniform.

The very useful AccountingWEB site observed, “The case seems to centre around asking staff to wear a particular colour or style of clothing is effectively creating a uniform, even though the items of clothing don’t have a logo and would previously be called dual purpose by HMRC.”

Wagamama said it has updated its uniform policy and it will now pay “a uniform supplement to cover the black jeans”. But it still raises the question: Can non-logo clothes be treated as uniform for tax purposes?

Another commentator said that it’s helpful to “to bear in mind that what is and isn’t pay for National Minimum Wage (NMW)  purposes is not and never was based on tax definitions”.

He concluded, “As far as I understand it, Wagamama’s failure was that they didn’t pay a uniform allowance over and above the minimum wage. They just required employees to wear certain clothing. After deducting reasonable costs of such clothing from the pay the employees were left with a net rate of pay below the NMW.

“The employer could have avoided that NMW failure by (a) paying a specific allowance for clothing or (b) a rate of pay with sufficient headroom to cover the clothing. Either way as far as I can see there’s no implication for tax.”

The simpleERB take? HMRC (the taxman) wants to have its cake and eat it too!



 

We read this interesting article about Amazon creating a ” Bank of Amazon “.

Here is our take on it.

Amazon has 80m+ Prime members, rising.

Amazon gets 50% of revenue from 3rd party resellers.

Amazon and the  3rd party resellers all pay the Visa/MC interchange fee “tax”

Visa/MC can only keep charging this tax because of their lock on the marketplace, “all” the credit and debit cards run on their rails.

Who is big enough to take the short term hit to break that lock? – Amazon.

“Buy with the Amazon card and get a 2% cash back on all your Prime purchases”  – or this averaged up to 5% or more with Amazon giveaways, e.g. Discount on Prime, cheaper Echo, Dot, discounts on Amazon own label.

Amazon will take the hit for as long as it needs. It works on 7 year ROI terms. (“If you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.” Bezos.)

And  Amazon  will have an army of 3rd party resellers working for them as foot soldiers , “Pay me with the Amazon card for all my other stuff I don’t sell via Amazon and get a 2% discount , (partly funded by Amazon), because I won’t have to pay the hated Visa/MC interchange tax.”

A bank of Amazon could wage a war of attrition on Visa/MC for 7 years. The markets won’t mind, they funded Amazon for a decade when it wasn’t making money.

The rough size of the prize would be at least the market caps of Visa and MC.  ($460bn). And this isn’t even thinking about emerging markets that Visa/MC do not serve. And where “interchange free” payments are gigantic.

For restaurants this will mean cheaper credit card processing, but it will also mean the arrival of the Amazon. Whether this means swapping the frying pan of Visa/MC for the fire of a very, very smart player remains to be seen.



Is 4g a viable alternative to broadband for restaurants using simpleERB for restaurant reservations?

It is a common situation now for people to find that the 4g data speeds are better than the landline broadband speeds available to them.

4g routers are now commonly available.

We often get asked: is it ok to use 4g for simpleERB? Will it cost me a lot?

The short answer is yes, it is perfectly feasible to use 4g and no, it won’t cost you a lot.

4g data costs (as of early 2018 in the UK) about 50p to £1 for 1gb (gigabyte) and a busy restaurant doing 15,000 covers per year is unlikely to use more than 2gb per month of data communicating with simpleERB, maybe only half that. So allow 50p to £2 per month in total.

If you use more than one device you will use more but two devices won’t use twice the data.

With a typical data speed of 20 mbps (megabits per second) download and 10mbps upload, the relatively small simpleERB page sizes (one sixth to one quarter of a Mb) will load quickly.

You can try it out by using the personal hotspot on your mobile phone before you invest in a 4g router.

Always make sure to check which networks are offering the best speeds locally. As the networks upgrade their services, the “right choice” can change overnight!



 

In our last blog post  we looked at the question of whether having taken a deposit from a customer or taken a credit card number  from a customer, who was a noshow it made sense to enforce it.

We said that that question could be answered objectively by looking at the lifetime value of the customer.

Bluntly, if it was small then the logical thing to do was to enforce the deposit. That customer was unlikely to return anyway.

Here I want to look at the difference in consumer expectations around deposits and “held credit cards”,  the legal and technical differences and the PR consequences.

The main difference with a deposit is that you actually have the cash.

If the customer want it back they are going to have to sue you.

Whereas a held credit card involves you taking the money in a separate step.

If you have written your terms and conditions correctly (simpleERB gives you a template) and the customer was advised of them, say in an email confirmation via simpleERB, then legally, the now show customer does not have a leg to stand on in any legal jurisdiction (country/state) that we know of.

However,  what the customer can do, is contact their credit card company and claim that you took the money illegally. Credit card companies tend to take the customers side and withhold the payment. There is paperwork to be done.

What you need is to show the email confirmation to the credit card company and your terms and conditions. Eventually you will get your money.

You might argue that it isn’t worth fighting but if you add up all those “not worth fighting for” occasions it might come to a large sum at the end of the  year. It is a bit like giving in to the school bully.

What restaurants often forget in all the negative stuff about charge backs is that “Banks file fewer chargebacks against merchants who regularly dispute chargeback claims”.

However, it is indisputable that if you have taken a deposit you are in a much much better place when a customer “no shows” that you are if all you have done is take a credit card number.

Restaurants often take credit card numbers rather than deposits because they think it is “easier”.  What a surprising number of restaurants don’t know is that taking a credit card number and writing it down in a the reservations book is against the law in most countries. It is called a breach of “PCI compliance” and restaurants who do this are leaving themselves open to fraud by staff and possible law suits by customers and hefty fines if caught.

simpleERB allows restaurants to hold credit card numbers securely via Stripe or Paypal.

However simpleERB also makes it easy to get deposits from customers and this is what we recommend if you are going to actually “hold noshowing customers to account”.

BUT you say both deposits and credit cards will dissuade customers from booking.

The answer is yes , they probably dissuade some customers. the question you need to ask is what kind of customers. They won’t dissuade the customer who has no intention of being a  noshow.

Again, let’s “do the math” to illuminate the problem.

First of all, what is your current noshow rate?

A Wharton study showed a rate of 20% in big cities. 10% is common.

We are predicting that 10% – 20% of bookings will be no shows.

Anybody who is thinking about being a noshow is just  not going to book with you. But you don’t make any profit from them anyway. You lose money.

So in order for “insisting on deposits” to actually cost you money you have to assume that 10-20% of the people who are not thinking of being a noshow are going to be dissuaded from booking with you by your insistence on deposits. Do you think that is true?

What to do.

Firstly, not all bookings are the same. Booking for 8pm on Saturday is not the same as a booking for 6pm on a Monday. A booking for 25 is not the same as a booking for 3.

simpleERB allows you to treat them differently. See the screengrab below

 

 

 

 

 

Secondly, run an experiment. Nothing says that you have to continue with a policy if it is not working.

Thirdly, make sure your terms and conditions are crystal clear, simpleERV makes this easy. Also , have them on your website and social media, upfront. Explain the precarious economics of running a restaurant, how a now show can devastate your profits.

Fourthly,  remind your customers. Again simpleERB makes this easy with automatic email and sms reminders. See below

 

 

 

 

Fifthly, mark anyone who does  show as an offender, again easy in simpleERB, see below

 

 

 

 

Sixthly, you can always, if you want, convert a deposit into a voucher that can be used in the next 14 days. You can’t say fairer than that, fairer then this, Feuhrer than thheeth…. that’s right you can’t say fairer than that…:-)

Seventhly,  talk to your local fellow restaurateurs. If you all implement the same policy, it will get the message across.

But social media I hear your cry! The noshowers will take to social media!

Ask yourself if you have done all that you we have suggested above, how stupid are they going to look?

Charge back info here , courtesy of The Chargeback Company.

Get the one stop solution to your NoShow problems here



In the vexed question of how to deal with restaurant noshows there are two arguments.

One of them goes like this:  theatres, cinemas, airlines, holiday companies…. none of them give consumers a refund if the customer can’t make it. Why should restaurants be different? Why should they not charge at least something up front and keep it if the customer does not turn up?

Some restaurateurs have started doing this and swear by it. For example, Joff Day of  Ben’s Cornish Kitchen, Marazion, says: “Having the ability to take deposits for online bookings via the simpleERB booking system has eliminated no shows – the bane of most restaurants.”

Others think differently, like the restaurateur Keith McNally, who says: “Although we take credit card numbers for parties of five or more at my restaurants, we never actually charge the customer for not showing up. Of course, we tell them in advance they’ll be charged for not showing up, but it’s difficult to have the heart to do it. Even, as in my case, when you don’t have a heart to begin with.”

This is an emotional argument. There is a more hard headed rationale, exemplified by Sabato Sagaria of Union Square Hospitality Group, who says,  “If you’re penalizing people with a cancellation fee, it’s also probably an effective way of cancelling the relationship in the long term. If the first interaction is making the reservation and the second interaction is the cancellation fee, chances are there won’t be a third interaction.”

So who is right? Which course is right for you and your restaurant and your noshows?

Fortunately there is some math that can help us here. Business consultants have the concept of “LTV” or to give it its full title, “Customer Life Time Value”. This is quite simple, it is the “total amount of money that you will earn from a customer”. To be contrasted with “the amount of money you will make from a single visit”.

The opponents of charging deposits or cancellation fees for now shows argue that annoying a loyal customer who doesn’t turn up by actually charging them a cancellation fee or keeping a deposit costs you money in the long run as there is a good chance they won’t come back.

This is where you need to start to categorise your customers. And for this you either need a really good memory or you need a “Restaurant CRM” (Customer Relationship Management System) like simpleERB. Of course it makes sense NOT to charge a customer who has been a dozen times in the past 12 months and is likely to keep coming. But what about someone who has never been before?

Here you need to look at the data. How many “first time visitors” become regulars?

Let’s take an example: say your typical spend is £/$/€20 per person, your average party size is 3 and your gross profit before staff and fixed costs is 70%  – then a no show costs you £/$/€42 and your profit (or rather contribution to costs) would be £/$/€42 if they turned up.

If you have taken a deposit of 50% or have a cancellation fee of 50% , then you will get  50% x 3 x £/$/€20 = £/$/€30 from that party if they “no show”.

You then run the risk that they are so annoyed with you that they never return.

What you have lost is the “LTV”.

Let’s plug in some assumptions and say that there is a 1/20 chance that they come a second time and a 1/60 chance that they come a third time and a 1/100 chance they come a 4th time. The expected LTV for that customer (in gross profit terms) is :

£/$/€  (42/20) + (42/60) + (42/100)

Which adds up to £/$/€ 2.92

Not a lot!

Certainly not enough to make you give up the deposit / cancellation fee of  £/$/€30.

In fact for it to be worth while for a restaurant to forego the deposit / cancellation fee the expected LTV has to be more than £/$/€ 30.

That needs the likelihood of repeat visits to be very high. In fact the chances need to be something like:

1/3 chance of returning again, 1/6 chance of a 3rd visit, 1/9 chance of a 4th visit, 1/12 chance of  a 5th visit, 1/18 chance of 6th visit etc. etc.

This gives an LTV of something like £/$/€ 40.

Is this the kind of repeat visit pattern you see in your first time visitors?

You don’t need to do all the calculations , just asking your self the question, “Do one in three of my first time visitors come back a second time?” is enough.

If the answer is an unequivocal “Yes” then you should pay attention to the argument that “Enforcing a deposit / cancellation fee policy will hurt my business”.

If the answer is “No”. Then you are almost certainly better off enforcing a deposit / cancellation fee for noshows.

I will deal with the difference in consumer expectations around deposits and “held credit cards”,  the legal and technical differences and the PR consequences in an upcoming blog post.

Get the one stop solution to your NoShow problems here



If you’re looking for an alternative to ResDiary to reduce restaurant no shows, a curse for restaurateurs, here’s how to reduce them to near zero.

If a restaurant is working on a small profit margin, a few no shows on a busy night can be the difference between working for nothing and turning  a profit.

simpleERB has the tools to enable you to reduce the financial cost of  your no shows  dramatically.

Automatic booking reminders

You can set any number of these these up to go to customers. e.g.  if someone books a long way ahead, one can go  a month before their date of arrival and another a couple of days before.

They can go by email or sms/text.

How to reduce restaurant no shows

Diners can be sent sms/text or email reminders of their reservation.

 

 

Hold credit cards securely in a PCI compliant manner

You don’t want to be holding people’s credit card numbers in any other form.  You would be leaving your self wide open to fraud and even be fined by your bank or credit card company. simpleERB has integrations with Stripe and Paypal to let you do this.

Take deposits

Again our integrations with Stripe and Paypal allow you to do this.

simpleERB gives you full control, so if you want to only insist on credit card numbers for your busy times like Friday or Saturday nights you can do this. Or only for Xmas. Or only for Valentines Day. Or only for bookings of over 10 covers…

Here is how simple it looks in simpleERB…

simpleERB credit card capture

Hold credit cards in a PCI compliant way. Take deposits.

The last thing is, all of these ideas are simple to implement. And quick. Immediately actionable tactics to help reduce restaurant no shows.

Does it work? Yes! Here is one of customers talking:

“At Ben’s Cornish Kitchen in Marazion, we started taking deposits using the simpleERB booking system. No shows virtually vanished overnight. We’ve had no complaints and no wasted seats. We’re very happy!”

p.s. You could always go  “All ticket” – and charge everyone in advance. Just a thought…simpleERB lets you do that as well 🙂



Restaurant wants BAD Yelp reviews!

“Botto Bistro in Richmond is not very concerned about its Yelp rating. In fact, in an effort to undermine the reliability of its Yelp page, the five-year-old Italian restaurant is on a mission to be the worst-rated restaurant in the Bay Area.”

Screen Shot 2014-09-20 at 11.20.05

See the full article here:

http://insidescoopsf.sfgate.com/blog/2014/09/17/richmond-restaurant-owner-encourages-bad-yelp-reviews/

If you want to do this as well simpleERB can automate the sending of that request 🙂



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