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The Hidden Side of ROI

A Franchisee’s Guide to Assessing Technology ROI the Right Way


“Saying hello doesn’t have an ROI. It’s about building relationships.” Said first by Gary Vaynerchuk, this well-known quote transcends sectors and emphasizes a fundamental truth about ROI: there’s so much more to it than the numbers alone can reflect.

Yet, the decision to acquire a new piece of technology for your restaurant often comes down to a single question: “how will this solution impact my bottom line?” While it’s true that cost savings are an important part of the decision-making equation, particularly in a sector where margins matter, not all benefits of technologies can be easily measured in numerical terms. Qualitative factors, like engagement, experience, and satisfaction, are just as important.

To invest or not to invest? That is the question. By exploring a number of factors that impact both hard and soft ROI, franchisees can be better empowered to select the right technologies, with the right long-term impact on their restaurants.

Hard ROI

When you consider return on investment, hard ROI is most likely what first comes to mind. Defined as factors that can easily be quantified in dollar amounts, hard ROI offers a straightforward view of the value of an investment: if you put dollars in, you want to get those dollars back out, and then some.

Today, the self-serve kiosk is a poster child for hard ROI. With estimates showing that kiosks increase average checks by 15-20%, it’s not a stretch to conclude that adding a kiosk to your restaurant will offer a high return on investment. However, not all kiosks are built alike, and not all of them deliver the same level of return. The latest and greatest in kiosk innovation goes beyond basic self-serve functionality. Rather, best-in-class kiosks elevate the guest experience through advanced functionality like facial recognition, past order recall, mobile pay, and contextual suggestive selling—to name a few.

As you look to maximize technology-driven ROI across your restaurants, make sure to ask yourself the following questions about the subtleties behind hard ROI:

  • How was the hard ROI originally measured? Was the original metric accurately calculated? Did the original study isolate ROI based on the technology solution in question?
  • Is my restaurant comparable to others who have experienced ROI? Are my customers likely to be equally receptive to the technology? Do my cost drivers look similar? It is important to make sure you are comparing apples to apples.
  • Are there other things I could be doing to maximize ROI, above and beyond what is expected? For example, are there new operational processes that might enhance the impact of the technology? Consider the bigger picture.
  • Is the ROI impacted by sales, location, day-part, or season? Will all of my locations benefit equally? Is there cyclicality to my ROI?
  • Is anything standing in the way of me achieving ROI? For example, does my technology partner offer the support needed to make sure crew members, managers, and guests are comfortable putting the new technology into practice? Support is an ROI maker or breaker.

Soft ROI

The hidden gem of the ROI equation, a solution’s soft ROI—while harder to measure—can arguably be even more transformative. Classified as a form of investment whose value cannot be tangibly quantified, soft ROI is often overlooked when businesses, including restaurants, make technology decisions. But competing in today’s dynamic food landscape requires that restaurants also compete on a number of qualitative factors.

Consider, for a moment, that a customer walks into your restaurant for the first time. They are greeted by vibrant digital menu boards that flip through a number of timely promotions. Sleek kiosks sit opposite the front counter. Today, your customer is with his family, so he prefers to walk up to the front counter and place his order. Predictive analytics recommend that your crew prepare ingredients just in the nick of time, and an intuitive order management system empowers them to fulfill the order quickly and accurately. Within minutes, your customer and his family are sitting at a table, enjoying their food together. There’s not a hard and fast ROI on a single happy customer, but that certainly doesn’t mean a return is not present.

Next time your customer stops by, he’s not alone. Remembering the great experience he had his first visit, he introduces three of his coworkers to your restaurant. The group is in a bit of hurry, so they side-step the line in favor of the self-order kiosks. In just minutes, each of the coworkers is served a fresh meal that matches their kiosk order perfectly. All are happy. All return. Once again, it would be difficult for a single hard ROI metric to capture the lifetime value of your new guests.

As you look to maximize technology-driven ROI across your restaurants, make sure to ask yourself the following questions to uncover hidden opportunities for soft ROI:

  • Do my technologies currently operate in silos? Eliminating silos can break down information gaps and make a radical impact on operational efficiency, quality of service, and satisfaction.
  • How do I compare to the restaurant around the corner? There are more competitive food alternatives than ever. Make sure guests can count on you for experiences that are differentiated by great service and personalized engagement.
  • What is the cost of staying the same? In today’s customer-centered reality, to stand still is to fall behind. Consider not only the ROI of a new solution, but the potential losses associated with continuing to do things exactly as they have always been done.
  • What makes a great restaurant experience? Sure, speed and order accuracy can be readily measured. But what about staff friendliness, ambiance, personalization, and loyalty? Craft a 360-degree view of the optimal experience, then consider where technology can make an impact.
  • Is there anything more I could be measuring? Yes, soft ROI is more challenging to measure. But that shouldn’t stop us from trying. Continue to think of new and innovative ways to capture information about the softer dimensions of ROI. For example, start incorporating metrics like visit frequency, anecdotal guest feedback, and social media mentions.

A Partner Worth Investing In

At SICOM, we provide restaurant technology solutions that quickly achieve and maximize restaurant ROI. And we don’t just mean hard ROI (although, of course, we’ve got numbers to back that up). We’re equally focused on the intangibles that make exceptional, scalable dining experiences possible—like customer engagement, employee empowerment, brand perception, and more. That’s why, this year, we’ve championed ‘Experience Matters’ as a rallying cry to capture the real value of all that we do.

Schedule a meeting with our team to learn how we can elevate ROI across your restaurant locations. 

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Lee Pearson
September 17, 2018

Lee works on the front-lines to empower quick service, fast casual, and food service communities to strategically apply and harness technology innovation in a way that achieves their strategic goals and objectives.

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