Don’t Blame The Great Recession: Smartphone Users Increasingly Are Behind Restaurants’ Near-Death Experiences

One of my favorite shows is Food Network’s Restaurant Impossible. For those who haven’t seen it, the program follows celebrity chef Robert Irvine as he tries to rescue failing family restaurants. He does this in spite of two limitations: a spending limit of just $10,000 with which to redesign the restaurant and only 48 hours to complete the makeover. The remediation typically involves a menu refresh, staff retraining, and helping the owners undo the bad habits that got them into trouble in the first place.

In the program’s first 10 minutes, Irvine always asks some form of the question, “What went wrong?” If the business has been open for at least the last seven years, and if there has been no major change in ownership, the owners often cite the same root cause: the Great Recession of 2007-09. They’ll remark how business was fine until the economy tanked, and then customers never came back.

Irvine quickly discovers that the business’s struggles have almost nothing to do with the recession. That’s no surprise, since the amount of money we Americans spend on restaurants dipped slightly from 2008 to 2009 but then quickly recovered in 2010. Instead, their problems can be attributed to more fundamental failings, including lousy food, bad service, dated décor, and an unclean cooking and eating environment. In other words, the owners have no clue what their problems really are, and that means they have no idea how to fix them.

What else happened at about the same time the economy went south that could explain these restaurants’ near death experiences? The answer: smartphones, starting with the iPhone in 2007, and with them, apps such as Yelp, which enable users to post and read user reviews. Suddenly, every restaurant, from the nearest McDonald’s franchise to the local ice cream shop, had an army of evaluators weighing in and sharing their experiences with millions of other people. Like any other sub-par product or service subjected to instant and transparent user feedback of this magnitude, bad restaurants got creamed.

Today, there is no excuse for a restaurant owner not to know why his or her business is in trouble. If you own a restaurant, you should assume that every customer with a smartphone is using one of these apps to rate your restaurant. (On a related note, if I ran Yelp, I’d call Food Network to explore a tie-in with “Restaurant Impossible,” just as car maker Lexus and food provider Sysco have done.)

The good news is that all this feedback can provide an owner with everything she needs to fix problems. Many of these services permit businesses to register, allowing them to offer deals, message to users, and analyze user data about the restaurant. In the span of just a few years, in other words, tools have emerged that allow restaurant owners and businesses in lots of other categories to do consumer research, advertise, experiment with new offerings, and so much more, all at a fraction of what these programs used to cost. They don’t need an advanced degree to use these tools, either.

In the mobile era, anyone can become an amateur food critic, and any business owner can become a savvy user of the information these critics provide. That means no restaurant has to wait for Robert Irvine and Food Network to come to the rescue.

One comment

  1. Reblogged this on Matt Collins' Blog and commented:

    As many of us turn to restaurants the day after the Thanksgiving holiday in the U.S., I’m reblogging a post I wrote over a year ago on how business owners, including restaurateurs, can use smartphones to collect and respond to user feedback in ways not imaginable 10 years ago. Happy Thanksgiving!


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