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Restaurants to pilot kiosk-based loyalty program

Twelve restaurants in the Dallas-Ft. Worth area will begin using kiosks and smart cards this summer to bring their customer service to a new level. Customers will input their dining preferences to start, and then any time they swipe their cards at lobby kiosks, restaurateurs will know just how to serve them.

May 8, 2003

Twelve restaurants in the Dallas-Ft. Worth area will begin using kiosks and smart cards this summer to bring their customer service to a new level, according to Integrity For You, a loyalty consultancy.

It has been a year since the card technology was unveiled at the 2002 National Restaurant Association Hotel-Motel show in Chicago. The trade show is taking place again May 17-20, but Integrity For You (IFY) will not be attending to update visitors about its $1-million pilot project in the 12 unnamed restaurants. The company will be at the Texas Restaurant Association Expo in Dallas, June 22-25.

With IFY's technology, diners will swipe radio-frequency identification tags made by Texas Instruments to check themselves in at wall-mounted kiosks placed in restaurant lobby areas. They will simply enter the number of guests in their party on a touchscreen, and be rewarded with personalized service and special offers.

When a card-carrying customer is identified, the restaurant's maitre d' will get a printout containing details on the customer, such as his or her favorite wines, entrees and seating preferences.

"If a customer likes water with no ice, or wants to be seated near an air conditioner, the staff will know that," said Barry Hyman, vice president of sales for Integrity For You. If the customer is entitled to any points or discounts, the server will present an award voucher.

After the customer leaves, the waiter will go to a hypercom terminal, pull up the customer's name and enter the check amount and information on any special events that occurred during the visit, Hyman said.

Restaurant customers enter the number of guests in their party to start the system.

Makings of a kiosk

Hectrix Ltd. is in the process of custom developing the kiosk. "We are still specing it out now," said Hitesh Patel, M.D., president of Hectrix's U.S. division. "We are providing the hardware and software to capture information on the front end," he said. "We will integrate our system with IFY's customer-relationship software."

Patel said it will take two to three weeks before he can estimate the cost of building the kiosks. But he said he expects this to eventually be a multimillion-dollar relationship with IFY.

IFY supplies a standard PC to manage local functions on the back end, such as updating software used on the kiosk, and printing out the customer detail slips. The local computer is connected to IFY's data center, where customer information is processed.

In the early stages of the pilot, IFY will be issuing the radio-frequency i.d. tags on behalf of the restaurants in either postage-stamp or credit-card sizes. Membership will be by invitation from each restaurant's management. The restaurants will likely open the program to other customers once it matures. Hyman said the cards will  offer users the ability to pay for their meals by 2005.

"We are waiting for Visa and Mastercard to set the standard for payment on a chip," said Hyman. "It would be difficult for a small vendor to decide issues like what type of chip to use, and the type of security needed."

Hyman said his company will expand the kiosk loyalty program to other retail sectors including theaters, golf shops, car servicing and sales, dry cleaners, pharmacies and specialty shops.

Pilot players

Hyman said the restaurants participating in the test are still under non-disclosure, but he noted they are in the "family-dining category and above," meaning no fast-food establishments. "We have a good sampling of restaurants; steakhouses, Mexican, seafood," he said. Hyman added that the companies should achieve ROI in one year. The restaurants were not available for comment.

The program will cost each restaurant $2 per member per month, Hyman said. That includes the kiosk hardware and software, reports, analysis and integration with Web services. The cost to restaurateurs is kept down because advertisers are paying for display time while the kiosk is not in use.

The kiosk will display a rolling sequence of 10 advertisements, each around one minute in length. The messages, which are controlled from IFY's data center, will most likely target upscale customers with products like alcoholic beverages, cars and jewelry.

Besides offering selling opportunities, a key benefit of the technology to restaurateurs is keeping customer knowledge in-house. "The biggest issue to restaurants is a great turnover in staff. If a server leaves today, all that information about what particular customers like is gone with him. With our kiosk, even a new hire can know customers immediately," said Hyman.

Another obvious benefit comes from offering customers personal recognition and a higher level of service.