Any restaurant owner knows how frustrating it is when they take the reservation and the customer doesn’t show up. It means revenue loss and an empty seat. Especially, when that seat could have been occupied by paying customer. To combat this problem, some restaurant owners have decided to say do away with taking reservations. Starting in New York somewhere between 2009 and 2010, this trend has gained a steady following.
So, how risky is it to adopt a “no reservation” policy?
To put it bluntly, you must be prepared that some customers will absolutely hate this policy. Since this is a relatively ‘new’ trend, the customers that you will likely alienate are Baby Boomers. But, you have to know that losing a customer is nothing compared to losing a business. You must find a way to deal with customers that don’t show up. Some restaurants tried to solve the problem with re-confirmation of reservation by phone or e-mail but that is valuable time your employees could be doing a slew of other tasks.
Before you completely rule out this idea. Let’s talk it out. Yes, people will be waiting. But how you manage those waits could be the difference between large profits or large profit losses. While customers wait, guide them to the bar, have them order appetizers, do anything you can to keep them engaged and committed to staying in your establishment. Make the waiting as enjoyable/bearable as possible. The most important advantage of ‘no reservation’ policy is, you can guess, higher profit.
In addition, a ‘no-reservation’ policy can create a great visual and word-of-mouth marketing tool. Humans are naturally curious about large gatherings of people. If bystanders see a line at a restaurant, they automatically give that establishment a ‘halo effect.’ It sends the message, ‘if people are willing to wait in line for one place, the food/experience must be great!’ Bars in Nashville, New York and other large cities do the exact same thing to entice people. Why not use a trick out of their playbook?
The downside to this strategy is that people have to wait. I do not know about you guys, but I am not a fan of waiting. Especially, when your significant other, friends or yourself start to get ‘hangry (angry and hungry).’ That is why it is up to management to conceptualize and practice their customer’s journey. What can you do to make that wait a better experience?
The better the wait, the better the profits.