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Selling or Serving?

Amy Traverso - September 2013

Amy Traverso explores the software that allows restaurants to treat their waitstaff as a bona fide sales force, to track performance, and to dispense deserved rewards—or not.

Phil Beauregard grew up working in restaurants: washing dishes, waiting tables, managing a bar. It was a good way to earn money, but not a vocation, and he eventually went off to the Wharton School of the University of Pennsylvania to study game theory and applied math. But even from the lofty remove of academia, he found himself thinking about restaurants. What was the connection between the theory and the real-world businesses he knew? Why wasn’t good research being applied in this industry? “It occurred to me that servers and bar staff in all those restaurants amount to one of the largest sales forces in the world,” he says. “So why weren’t they being treated like true sales forces?”

Beauregard is one of a growing group of programmers and tech entrepreneurs developing solutions for some of the restaurant industry’s most common challenges, from managing social media to managing bar tabs. But the problems that Beauregard and his competitors are tackling are perhaps the most complex: managing and motivating employees in an industry with historically high turnover.

For Beauregard, the solution is in creating an objective meritocracy where servers are rewarded based on their performance, not staff politics. His Boston-based start-up, Objective Logistics, creates a virtual leaderboard where servers are ranked based on statistically normalized sales data drawn from the existing POS system (managers can also factor in tips and less objective measures like side work and attitude). Top performers are rewarded with their pick of shifts and stations—the system, called MUSE, generates the schedule based on staff requests and rankings, with management oversight. “What seemed really broken to me is that waiting tables is a commission-based sales environment, so you want to work Friday and Saturday shifts,” Beauregard says. “But if you’re working Monday and Tuesday, you may not feel motivated to come in with your A-game. Then it can be really hard to move up the chain unless you have tenure or a good relationship with the management.”

With MUSE, managers can track employee performance in real time using mobile devices. If server Jim is ranking below average, his manager can drill down into the data to look for weaknesses and offer training to help him improve. Maybe he needs help with the wine list or with promoting specials. “It turns managers from babysitters into coaches,” Beauregard says. It also analyzes sales trends and creates forecasts for more cost-effective staffing and ordering. The product has been available commercially since January, and its major clients include Not Your Average Joe’s, with 18 locations on the East Coast, and multiple locations of the 5 Napkin Burger chain in New York City and Boston. Ross Goldberg, who manages a 5 Napkin Burger branch on Manhattan’s Upper West Side, says that the MUSE system “has given us the ability to dissect individual performance. It really takes care of a lot of the back-and-forth between staff and management in terms of schedule requests and schedule availability.” The system costs $399 per month per location, with discounts applied based on number of locations, length of term, and payment schedule.

A less automated but popular alternative comes from New York City company Avero, founded by Damian Mogavero, a former investment banker. After leaving Wall Street, Mogavero became CFO of a major New York restaurant group, but when he asked his managers for data to identify the best servers and best dishes, they didn’t have it on hand. So he decided to apply his data-mining talents to the restaurant business and founded the company in 2000. Like Objective Logistics, Avero’s tools take data from the existing POS system and generate reports in real time that can be viewed on any device. “We can pull out labor data, which we meld with sales data, to give insight around what you’re selling, who’s selling it, how the weather and time of day affects sales,” says Richard Chinitz, Avero’s director of marketing. “Seeing things like ‘What were my sales hour-by-hour, and what is my staffing compared to those hours?’ can help folks optimize their scheduling.” Managers can also keep a virtual logbook and even determine a server’s average sales by party size in order to assign the best person to serve a large group of VIP customers.

Now the company counts 94 percent of Las Vegas’ casino restaurants among its clients, as well as major hospitality groups like Union Square Hospitality, Batali & Bastianich, BR Guest Hospitality, and Lettuce Entertain You Enterprises. Prices begin at $500 per restaurant per year for the most basic tools.

Alexander Cauchon, director of wine and spirits for BR Guest, says his group uses Avero’s technology to monitor check averages, staffing needs, and even to make sure his bartenders are honest. By filtering the data, he can determine the average percentage of credit card versus cash transactions for a given restaurant. “If you have a group average of 21 percent cash for a given location for the month and one bartender is at 11 percent, you wonder if something is going on,” he says. “If you see a trend three months in a row, something is definitely going on.”

BR Guest’s managers also use the data to motivate employees. “We’ll post performance statistics on the communal bulletin board, and then it becomes a friendly competition among staff,” says Cauchon. “And you let them elevate their game without having to go to them and say their check average is below the mean.”

Larger players are also in the data-tracking game. POSitouch offers tools to allow managers to integrate labor information with sales data. Georgia-based NCR, makers of the Aloha POS system, also offers add-on modules that can slice and dice sales data and track server performance. “Ten years ago, we’d capture sales and send it to a central repository,” says Tim Henschel, public relations manager. “The world has changed, so with our real-time software, the moment a transaction is tendered at any location, managers and owners can see it on a mobile phone. We’ve been told it’s the most addictive application we’ve written.” The value isn’t just in being able to monitor operations when you’re off-site. “If a manager senses that a table has been sitting for a while,” Henschel says, “he can pull up on his smart phone that the POS system hasn’t been touched for that table for 45 minutes and maybe it’s time to walk over there himself.”

And, setting aside the larger goal of increasing profitability, these high-tech products are most useful when they allow managers to spend more time doing what it takes to make a front-of-the-house operation hum. “That’s what we’re here for,” says Goldberg. “All the work we do in the back office is about improving what happens on the floor, not in the office.”