Qu - Restaurants Reinvented - Meredith Sandland and Carl Orsbourne - Transcript
[00:00:00] Jen Kern: Hello everyone and thanks for joining us again on Restaurants Reinvented. I'm so excited today to have not one, but two very well-known guests. I have Carl Orsbourn and Meredith Sandland, recent authors of the book Delivering the Digital Restaurant: a first of its kind Your Roadmap to the Future of Food.
[00:00:21] Hello, Meredith and Carl. Welcome to the show.
[00:00:24] Meredith Sandland: Hi, so happy to be here.
[00:00:26] Carl Orsbourn: Hi, Jen. Great to see you again.
[00:00:28] Jen Kern: Thanks so much for joining. I'm really excited. So, so you too are both steeped in digital and in restaurant experience. So I'm going to assume that you met working at Kitchen United. Is that correct, or did you meet before then?
[00:00:42] Meredith Sandland: That's right. We met when I was just starting at Kitchen United and Carl was leaving his big corporate job looking for something more disruptive. And a friend, a mutual friend of ours, "Oh, you've got to talk to Meredith. She's doing the most disruptive thing, a ghost kitchen."
[00:00:57] Carl Orsbourn: And I hadn't heard of what a ghost kitchen was [00:01:00] before, Jen, but having led a, a thousand unit convenience store chain in many ways, convenience stores where they're first ghost kitchen. So if any of that, we need to talk about that recently. Didn't we, Meredith? Thinking that a ghost kitchens in many ways are very similar to c-store kitchens in the, in the sense that the food is consumed off premise.
[00:01:16] Jen Kern: So you met at Kitchen United and you both have experience even going back before then. So, Meredith, you were a Head of Operations at Yum! Brands and also worked at Bain. And then, Carl, you were at bp, working in the retail sector. So, lots of great experience, but what I really want to dig into today and talk to you two about is the changing model in the restaurant world.
[00:01:43] So things have been changing quite rapidly, even before the pandemic. Things were starting to change with digital and off premise, as you know, working at Kitchen United. And there's more technology and data than ever before, but I'm just going to take a guess and say from an operator standpoint, they're not really sure what to do [00:02:00] with all this change, all this technology and all this data.
[00:02:03] And everyone keeps saying like, "You've got to transform, you've got to evolve, you've got to modernize your business." And when we strip away all the buzzwords, what does that really mean? And so the thing that got my attention with you guys is you talked about this idea of algorithmic growth, which I want to talk about that a little bit.
[00:02:22] And first, I'll have you define it, Meredith, because you first mentioned this word to me and it kind of like my, my ears perked up when I heard it. 'Cause I was like, "Wow, that's pretty cool." Like, "Generally I know what it means." But talking about the shift that we're, we're really seeing and try to pave in terms of the feature of restaurants, how do you see algorithmic growth playing a role?
[00:02:44] Meredith Sandland: Yeah. So algorithmic growth to me means two things. And below play on words, one is taking advantage of all the algorithms around us that are shaping our digital lives. And I, and that can take the form of lookalike audiences on Facebook, or I'm using algorithms to [00:03:00] serve up ads as, as people go through their daily lives and get the right ad at the right time.
[00:03:06] And the algorithmic growth also means growing exponentially, right? It means being able to grow beyond what historically a restaurant was able to do, where they were trying to eke out just a few more visits, a little bit more reach, possibly a slightly larger basket size. The digital world enables so much more growth, enables us to reach so much more people in a way that hasn't been possible for restaurants before.
[00:03:30] Jen Kern: And so in the past, how do you see that restaurants were typically measuring success or profitability?
[00:03:39] Meredith Sandland: Yeah. Well, so let's start with the top line first, right? The restaurants generally, I think, of how many people are coming into their restaurant. And they don't know who those people are, they don't know why they're coming. Maybe they do a few surveys or, you know, talk to someone here and there, but they really don't know.
[00:03:54] And the goal is, you know, "How do I get a thousand people a day coming in to become 1100 [00:04:00] people a day coming in." And so they spend a lot of time thinking about that, those incremental visits that they might be able to get and they try to decide, "Oh, should I get my existing customers to come more or should I get new customers to come in?" And I think more small restaurants, independent restaurants tend to think about expanding their customer base, expanding their reach because they are doing things like putting flyers out, putting out ads, trying to get people to come here. And then maybe the more sophisticated ones are thinking about how they expand what we call their frequency.
[00:04:28] So for those existing customers, how do we get them to come more often. What all of this data unlocks for us is the ability to flip that model on its head and think about restaurants like a software business and in software we think about something called “LTV” to "CAC". And "LTV" is lifetime value, so that's how often are people coming in, when they come in how much are they spending, when they spend what items are they buying and what's the margin mix on those items and [00:05:00] how long does that relationship last. Whereas "CAC" is the customer acquisition cost and how much did it cost us to get that customer.
[00:05:09] Jen Kern: Great, great. So this is the model the "LTV" and the "CAC" model that you see and believe that restaurants need to move towards going forward. Is that correct?
[00:05:19] Meredith Sandland: That's exactly right. So I think historically when we thought about, "Oh, I have a thousand people coming in a day and I want 1100 people to come in a day." It's really hard when you don't know who are the people who are coming in, who are the people who are not coming in. When you don't have a lot of information about those customers, it's hard to move the needle on that overall number.
[00:05:37] But when, you know, down to the individual customer, "I paid this much to acquire them. They're now coming in this often" and "Oh, this one lapsed. I need to get them to come back in." Or, "Oh, this one is coming less frequently than they used to." Or, "They're still coming in, but they're not buying as much as they used to."
[00:05:56] Now we have a lot more information and a lot more tools to make [00:06:00] personalized offers to specific people to change their behavior.
[00:06:04] Jen Kern: Okay. So obviously data is going to play a big role in this. And Carl, I'm gonna gonna ask you sorta to chime in here 'cause we don't want to ignore you. But from a data perspective, you know, one of my little pet peeves is everyone throws out this, you know, "Data's so important. There's big data. There's little data and there's data everywhere."
[00:06:22] And for a restaurant to get their hands around data, it's so difficult because they have so many systems. And not all of those systems are one integrated or two capturing the full picture data in those particular segments. So tell me essentially why you think data or really what's the best way for operators to get their hands around the data in a way that's meaningful?
[00:06:46] Carl Orsbourn: It's a great question, Jen. I think this is probably one of the most challenging aspects of this technology revolution that's happening in the industry right now. Let's break it down into something super simple. You think [00:07:00] of that most wonderful restaurant experience that you and your partner went to most recently and a dining location.
[00:07:07] And you had a server that perhaps recognize you from your previous visit and say, "Jen, you know, last time you were here, you enjoyed this cup of a Sauvignon. And I see here that your husband has this dietary preference." Maybe as a vegan or something like that. That is data. That is data that's being used by the restaurant to enhance your dining experience, but the person that's doing that, the person that's been out to acquire that data A - benefiting from the fact that A it's been accessed first. It's being captured, it's being put into some kind of system. And then B - it is then being utilized to enhance the experience. And I think this is an important piece. The data aspect of it isn't just about off premise, it can improve the entire omni-channel experience for your customers that coming to dining with you, that perhaps drive through your kind of restaurant or perhaps just have a takeout experience.
[00:07:54] And if you can create a situation whereby the data can help every single [00:08:00] one of your team members that are supporting the guests experience, then that is huge because you don't have a server base that does that wonderful experience that gave you and your partner, that same kind of experience every single time.
[00:08:13] So it's a, it's something as simple as that, I think just that analogy there, which really is explains why data is so critical. The challenge is, is that now there are so many different systems, so many different types of technology that are capturing data in different levels of volume, to different levels of detail.
[00:08:31] And all of this data is sitting out there. Now let's go back to a technology platform that we all know and if from 10, 12 years ago, open table. Okay, when as open table does and open table has an ability within it for you to actually write down these notes. But actually how many people did that in the restaurants, how many people actually captured that information? So there's this piece around the capturing aspect of it and then there's the piece about the utilization. Now the good thing about the technology today is that now you don't even have to worry so [00:09:00] much about the capture piece of it if you create the order flow to be something which actually captures that data on, on route. The algorithms that Meredith was just mentioned can also be automated in such a way to be out to say, "Right based on this particular type of guest profile, this kind of guest profile data, we can then put them into this particular type of bucket where this algorithm is then going to try and bring them back in to try and help increase their lifetime value." And so I think these are the ways in which it's going to be out to be so advantageous for restaurants to look at this. The big thing is really about how to work with a system that's going to be out to make the data capture and the data use as easy and as simple as possible.
[00:09:40] Jen Kern: Okay. So, so let's play a little game, right? Let's have a little fun here. So I, I mean, we have Halloween coming up, so I'm going to dress up. I'm going to be an operator right now. I'm going to put on my, my operator outfit, so to speak. I have a a hundred unit chain, fast casual and I have, [00:10:00] let's just say pretty, pretty small profit margins, like, like most operators. Okay? And I'm looking for a way to really move my business forward and drive stronger profitability, top line profit margins, and move towards this model of measuring "CAC" and "LTV" over the unit economics that we spoke of before, like just frequency and gas and just moving the needle just incrementally.
[00:10:26] I'm looking to move it on a more global basis like, like I believe you both are describing. What's, what are you gonna tell me to do first? What, lay out sort of like a basic, like step one, step two, step three roadmap for me.
[00:10:38] Meredith Sandland: Yeah. You know, I d I think it depends on how much you're willing to spend in terms of resources, but money and effort. If you don't have a lot of money and you don't have a lot of time to put into this, starting with something as simple as collecting email addresses and starting to get to know the basics of your customers is better than nothing.
[00:10:59] Right? If you're [00:11:00] willing to put a little more time and resources into it, then you might think about, "Okay, do I have the right POS in place that's truly an omni-channel POS that can create customer data across channels?" Because many consumers use your restaurant in different ways at different times for different reasons.
[00:11:17] And so if you identify them, you know, over here as a takeout customer and over here as a dine-in customer, but those two data points never speak to each other, you might send that customer the wrong message. So if you're willing to really look at the bits and pieces of tech to say, "How am I collecting that data and is it all going into one central place?" That is really where I would begin. I would begin with trying to get the right tools in place to collect the right information.
[00:11:45] Carl Orsbourn: I would agree with that, Jen. I think the piece that obviously is one of the elephants in the room in our overall conversation here, it's third party to first party conversion. So a lot of the time around third parties, the DoorDash is or the UberEATS of this world [00:12:00] is that it's about the fees. Which of course is a very big concern for restaurant owner-operators, but the other piece is they don't get the data.
[00:12:08] They're creating dishes and they're sending these dishes out to customers near their restaurant, but they don't know who they are. And so one of the reasons to bring them onto a first party platform is not just the fees, but it's also the piece around being out to find out who are the customers that are buying from them, is this their first time that they've ordered from them. And that piece of it, I think, is going to be pretty important straight after you've got a place where your digital presence exists across all the different third-party platforms that you've got great kind of optimized menu items for off premise.
[00:12:36] And then you can actually say, "Well, okay, once I've got that in place, how do I have the first party platform that's going to give my guests and even better experience and even more frictionless experience than what they would get through a DoorDash. And at the same time, I'm going to utilize that data to even enhance the experience even further."
[00:12:54] Jen Kern: Yeah. Well, I'm so glad you brought that up, Carl, because I really do want to talk about your book. And, and, and whose [00:13:00] idea it was to write it first and there he is holding up his book. Thank you. Again, it's called Delivering the Digital Restaurant: a first of its kind Your Roadmap to the Future of Food, which I just love.
[00:13:09] I love the title, subtitle. And then yesterday I read your, your preload, which is also a really good summer. I'm like, "Gosh, it's sounds like I wrote this all." But obviously you, you both have a lot of off premise experience, having been a senior executives at Kitchen United. What was the reason that you originally came together to write this book and who, who did start it?
[00:13:31] Carl Orsbourn: Well, we were driving back from Pasadena where Kitchen United is, is based and it's head office there. And at the time I was leading not just the operational piece of it, but also customer success. And I was explaining to Meredith maybe even complaining to Meredith about the, the fact that, you know, we've got a lot of restaurant owner operators that had the foresight to be in a ghost kitchen environments that saw the benefits. They were already sold on the idea of, of off premise and the growth potential that exists there, [00:14:00] but they were struggling. They were struggling to be out to understand how the digital marketing model needs to change to be out to truly succeed in that space.
[00:14:08] And Meredith was driving and I was in the seat next to her, and I said, "It'd be great if there was a book out there that someone could just turn to, to be out to understand the steps, the pathway, to be out to do this." And Meredith nodded and we then changed the subject, so moving on to something else.
[00:14:22] And it was only after a few months later after we'd left Kitchen United, where we kind of came back to the idea around this. And of course this was pre-pandemic. You know, the idea of the book was something that we thought would actually make sense regardless. Now in 2020 with everything that's happened, with restaurants having to really go through this level of learning last year in particular, it really accelerated everything. Accelerated the need for this book and my goodness could we, we'd been in a rush to get it on the shelves as quickly as possible, and we hope our goal and it, Jen, is for us to be out to help the industry.
[00:14:55] There are a lot of folks out there that we believe if they read this book are going to get a [00:15:00] better appreciation of why this is happening and, but also how to be out to turn it actually into a force for good to lead their business into the kind of next era.
[00:15:11] Meredith Sandland: Yeah, that's right. I think that as in many cases, when you say, "I wish someone would do something." It turns out someone is you, right? And we love this industry so much and we want so much for the industry to be able to survive this big omni-channel shift. And to do that we think we need and they need some tools and a group discussion to talk about how to navigate this.
[00:15:32] You know, you talk about the inner flyleaf and what's written there and we really do believe that this omni-channel shift that restaurants are going through is as big as what retail went through over the last 15, 20 years. And when you think about all the changes that brought to our retail landscape and who survived that big disruption, we want our restaurants to be able to survive.
[00:15:53] Half the restaurants in America are independent and a huge fabric of our local economy, [00:16:00] our local community, so helping them as well as the big chains navigate this change is really important to us. And I will tell you, it's not just the independent who don't totally understand the magnitude of the shift.
[00:16:13] You know, I had a large chain say to me when they moved into the ghost kitchen at Kitchen United "Well, how big will our sign be?" And I said, "Well, you know, it's a ghost kitchen, how big will your digital marketing budget be?" And they said, "Well, you know, we're just going to use our, our national budget."
[00:16:30] And their idea was, "Well, we're just going to open another location, just like any other location. And because we have a big national marketing budget, people will have heard of us and they'll order from us." And that's not at all the way that the shift works. The shift is much more hyper-local, it's much more about getting the local neighborhood to understand that they can order from you quickly and easily and have a great order to delivery time via a delivery mechanism instead of a drive-through mechanism. It's about [00:17:00] converting those people from third-party to first party using the data to enhance the lifetime value.
[00:17:05] There's so much there that's so different from opening a traditional restaurant, that for me hearing even a large chain say something like that meant that we as an industry really needed to have this conversation.
[00:17:18] Jen Kern: Yeah. And so have the conversation we shall, we will, we must. And, that's, it's a big part of what we do here on, on Restaurants Reinvented are talking about all the ways that we need to, to help restauranters and specifically the marketers behind the restaurants change the way that they're doing things today.
[00:17:36] So I, I love your little story how the book started out as just Carl saying, "There should be a book for this." And then sure enough, that gave rise to your baby. And now the baby's been born, the book is out. It's on shelves. I'm sure it was like, a quite a labor of love getting to this point. How's it going?
[00:17:52] Like I hear you talking at conferences. I know, you've been on the circuit. Tell me what you're hearing and what types of feedback you're getting from, from the [00:18:00] industry?
[00:18:00] Meredith Sandland: You know, it has been awesome. Writing a book is one of those things, kind of like building restaurant, honestly, where you start so long before it actually gets out into the world, that you hope that what you said a year ago, when you were writing is relevant to people when it actually comes out and is available to the world.
[00:18:20] And sure enough, it's been super relevant and the reception has been fantastic and it warms my heart. Honestly, every time someone writes me, people direct message me on LinkedIn and say, "I'm reading your book and I love it." And there are people I've never heard of, I've never met. Awesome. Like, I just love, I love how much the world has shrunk that people can do that now.
[00:18:41] I mean, imagine back in like the nineties being able to reach out to your author of a book you're reading and tell them what you think of it. Like, it's just incredible. And that makes me really happy, it makes me happy that this was worth the time, but I think there's still more, right? Even after people read the book, I think, we need to continue to have this conversation together as an [00:19:00] industry, that how we respond to this picture.
[00:19:03] Carl Orsbourn: Yeah, it's been, it's been very exciting. We had over a hundred different industry executives give that time to speak with us. And it was a real joy to us, quite honestly, Jen, just to be out to speak to these innovators that are shaping the future of food in this way, that had the foresight some very many years ago to actually see where things were heading and have built that future and are now leading in very successful businesses.
[00:19:30] And, and similarly, the restaurant owner operators that have adopted a lot of the practices that we preach in the book and, and see the success coming from that. And I think that's also hopefully going to be a, a useful way for those that are struggling at the moment, to be out to see perhaps the way to actually progress forward and to look at things a little bit more positively.
[00:19:51] But similarly, 90% of the content that we were able to capture, didn't make it into the book. There's a lot of value that we got from that just we couldn't [00:20:00] fit into all the pages. And Meredith wasn't up for writing a trilogy, so we've got 264 pages, so there we were...
[00:20:06] Jen Kern: Hmm, that's awesome. Well, congratulations on getting the book out and on the warm reception. And you know, when I first looked at it and I looked at the cover and, and, and the, the topic like "The Digital Restaurant" I almost thought, "Just two years ago that would have been considered an oxymoron," right?
[00:20:24] It's a digital restaurant. What? You know? And today it's not. It's not. It's very much here and it's very much real. How would you describe the digital restaurant?
[00:20:34] Carl Orsbourn: Well, for me the idea of a digital restaurant is that it exists where people are. And people today are typically interacting with various different digital mediums. And, well, there's a phrase that we use in the book that I really, really love. I, I, I can't remember where, whether we coined it, Meredith or whether someone told us it, but the idea is, is that now people are moving from an era where 'people moved to [00:21:00] food for to food goes to people'.
[00:21:03] And I just love that. I think that's such a lovely way of just encapsulating the fact that actually people now demand heightened levels of convenience. And I think all it takes really is to look at the other verticals around us, just to see what we mean by that. The fact that we still go out to shops, but actually the idea of having something delivered to us within 30 minutes is actually becoming something far more common than it was two or three years ago. And so a digital restaurant is saying, "Look, you can experience a restaurant's great food, the service that potentially you want from a convenience and the taste profiles that you can get for a particular brand can now be delivered to wherever you are, whether that be in your home or that via your workplace.
[00:21:43] And being out to engage with that restaurant through digital mediums."
[00:21:46] Jen Kern: Let me make sure I captured that correctly. You said the shift is happening from going to the food to the bringing the food to where you are?
[00:21:54] Carl Orsbourn: So people went to food and now food go to people.
[00:21:58] Jen Kern: Yeah, that's [00:22:00] ruminate on that a second. That's so true. That's so true. And it's still a little bit of a balance too, right?
[00:22:06] There's still a lot of both going on.
[00:22:08] Meredith Sandland: Yeah, and I think that will continue. I mean, if you look in retail, I still go to the grocery store most of the time, but sometimes I have things delivered to me. And I still go to Target occasionally, but most of the times I have things delivered to me. So it will truly be an omni-channel world where we engage in all types of behavior for different occasions.
[00:22:27] And that's why that, that major shift in the consumer's attitude then affects the restaurant and causes them to truly become digital, right? And I think, you know, Carl saying go where people are, we've talked a lot with the recent months with the labor shortage about how it's not just going where your consumers are, say on a third-party platform or having a first party ordering interface on your website, it's also about going where your workers are, right? If most of the workers are Millennial and Gen W, you're not going to reach them in the old school ways, right? [00:23:00] And I think to me, you know, some people could look at the title and say, "Digital restaurant. Well, I'm not a digital restaurant. I'm not in a ghost kitchen, I'm not a virtual brand. Like this book's not for me."
[00:23:12] Jen Kern: Right.
[00:23:12] Meredith Sandland: Really, it's about the entire change to the business model and the operating model for all restaurants that regardless of whether you're primarily dine-in or primarily drive through or primarily delivery, you need to be able to embrace these tools across your business in order to succeed in the new omni-channel world.
[00:23:31] Jen Kern: And so that really is the big takeaway, it's that obviously there are so many different sizes and flavors of restaurants out there. I imagine it was somewhat hard to write it, you know, knowing that you were, you were talking to small chains and, you know, large chains, but the point is not whether you're a mom-and-pop and you just have one restaurant in one town, or you're a young brands and you've got many brands all over the world.
[00:23:57] The point is that the [00:24:00] mindset and the mentality of someone that's owning a restaurant looking to drive strong revenue in this day and age needs to be a little bit different than what it was 2, 5, 10, 20 years ago. And the change will continue to happen. I love how Jonathon Relkin from Chipotle talked about it like a baseball game, and we're just in the first inning.
[00:24:19] Meredith Sandland: Absolutely.
[00:24:21] Jen Kern: Maybe the beginning of the second, but I'd say we're still probably in the end... and if it's along first inning.
[00:24:26] Carl Orsbourn: That's right. The, the, the very last chapter of our book culminates with asking, asking everyone that we spoke to, we didn't get all of them, but everyone we spoke to, "What does this industry look like in 10 years from now?" Well, "What's your, what's your crystal ball saying?" And that's a really exciting way just to be out to see the level of change that's happening.
[00:24:44] It's not just, you know, drones and automation, which of course is a theme that we cover in that chapter. It's also talking about the fact that personalization is going to go to a new level, the fact that the supply chain is going to get closer to where the restaurants are actually making the food. So all of these different themes I think are going to come through, [00:25:00] which are going to continue to challenge the traditional sense of what the restaurant business model looks like.
[00:25:05] And I think it's going to, it's going to continue to demonstrate that those owner operators that have the most nimble mindset, those that are willing to innovate, those that are willing to try and experiment and recognize that they're going to fail at times, but they have the flexibility within their culture and within their infrastructure to be out, to be ready for that change that's still to come. They're the ones that will win and continue to win as we go through the, the, the future that lays ahead.
[00:25:32] Jen Kern: Absolutely. And so what would you say to an operator that's been in business or been in the industry say 20 ish years and they're trying to adapt their business right now to what's happening in the industry, knowing that they're not a Millennial or Gen W, right, and they're not maybe as cognizant of all the digital channels that are happening? What guidance would you give to that person?
[00:25:54] Carl Orsbourn: Well, we have, the foreword of our book is by a guy called James Holder, a friend of mine I've known for many [00:26:00] years and he's been in the industry for a number of decades. And he, he turned to me when he read the book and he said, "How, how do I go above all this? This is crazy. I mean, the amount of stuff..."
[00:26:11] And so it was wonderful just be out to hear his appreciation of the words that we've put forward, but similarly something which actually said like, "It's step-by-step." And while we cover it an enormous amounts of material here it is step-by-step. And so all I would say is, is that you have to operate within the capacity that you've got.
[00:26:32] And so that means you don't have to have huge amount of, you know, resource or extra kind of stuff to be out to make this work because we're living now in the SaaSification of this industry, which enables us to be out to have access to tools that perhaps would have cost thousands, if not millions of dollars potentially only 10 years or so ago, but now are available for just a monthly fee.
[00:26:52] Now, the challenge again exists that you could have almost too many SaaS tools available and so therefore it's almost worthwhile to think about exactly where you [00:27:00] need to be at the right time. But again, start with third parties, build your first party platform, think about how to optimize your menu for off premise and to be out to grow your trade value.
[00:27:09] And then from there, think about how to drive an efficient operation so that your off premise operation isn't getting in the way of your on-premise operation. So that's not creating a negative experience for either your staff or your guests that are dine-in the restaurant. And then from there, build on and start to build into the piece that we started today's conversation with around the digital marketing algorithms and how to get perhaps a little bit more specific on the, the aspects of thinking about the consumer segments that you want to service.
[00:27:38] Jen Kern: Yeah. And, you know, I love the SaaSification idea, right, of course. But for anyone that might be listening that doesn't understand what you mean by that, how would you explain SaaSification? Very sassy word.
[00:27:51] Meredith Sandland: I, I think maybe they easier word is the democratization of technology. So when, when I was at Taco Bell we had many, [00:28:00] many tools that we have built internally at the cost of millions of dollars that no independent restaurant or frankly, even regional chain could ever hope to have. We just had the scale to then depreciate all of those programming hours across a huge fleet of restaurants.
[00:28:15] And that meant that there was a very clear digital divide between the really big brands who could afford to do these things and everyone else. And then what happened in the intervening years is that a whole bunch of startups created all of these amazing, amazing technology. And instead of amortizing them across a fleet of owned restaurants, they amortize that development cost by the month by the restaurant.
[00:28:41] And so any restaurant, even one that has one single restaurant, can go pay a monthly fee and get access to the tools that the big brands did. Now, in my case, since I was running development at Taco Bell, you know, we had really advanced technology around site selection and [00:29:00] sales forecasting and cannibalization, things like that.
[00:29:02] Things that independent operators kind of do with their gut historically and are very, very good at, but now they can access those things via monthly through, you know, startup companies that have created these huge, awesome datasets and geospatial mapping tools that anyone can use. That's a really amazing change that's happened in the last, I would say, even in the last five years. And you know, the good side of that is any problem you want to solve with data, you can find someone to help you do it, for a small monthly fee.
[00:29:33] The downside of that, as Carl said, is there's so many of them, it's hard to know where to begin. And for that reason, we really think that the third-party is although they kind of get a bad rap in the industry are an awesome place for restaurants to begin. Because they make it so easy to get started on this journey and to start to experiment with it and get feedback and understand how it works.
[00:29:55] And you can figure out where to go from there.
[00:29:58] Carl Orsbourn: Yeah. Yeah. Like the [00:30:00] requisition cost analogy that we talked about earlier, Jen, you know, the reality is that the amounts of investment that's being placed by the third parties is so significant that it is going to be cheaper for you to acquire your customers through third parties through the traditional digital sense.
[00:30:15] And so you've got the capability and you've got the eyeballs of your consumers in those third party apps. The trick is being out to convert them onto your first party platform soon after they've experienced your food once acquired.
[00:30:28] Jen Kern: Yeah. Well, I love this idea of talking about the democratization of the industry too, because it's a term I heard early on when I, when I got here. And it it's really what, when we talk about that we're really talking about bringing these tools to every single restaurant operator. So we always hear about the Starbucks Gold Star, you know, app and the Domino's the way they've done their Pizza Tracker.
[00:30:51] I mean, we always hear about those, those two big brands. We hear about McDonald's being the first in digital, but how do we make these things accessible [00:31:00] for people wanting to start new restaurants or people that just have smaller chains, right? And that's something that we're very passionate about here at Qu.
[00:31:06] I'm very passionate about it. I know you guys share that passion as well as just making it easier for people to operate their restaurant businesses and providing those tools to everyone. So, you know, one of the things that's happened, and then there are folks that listen to this podcast, by the way that I've watched start. You know, one example is Pure Grit BBQ.
[00:31:26] I'm going to give her a shout out. She's a vegan barbecue business that just started and she listens and gets ideas about how to build a modern restaurant operation, right? And so I think that like seeing that come to fruition is such a cool thing, right? So, so, so I love that idea. I think we need, we all need to be talking about that, like making this a more level playing field when it comes to having access to the technologies and, and all the channels that are available.
[00:31:52] What you're talking about, Carl with, with getting that first party data, getting that conversion from third party to first party. So, really [00:32:00] appreciate that. And, something I want to dive into a little bit more and, Meredith, you mentioned this earlier is digital marketing. So we originally started the podcast to help marketers kind of evolve their career, not just because of the pandemic, but to help bring the industry up to speed with some really, you know, modern digital marketing practices.
[00:32:19] And it definitely has happened. We have seen, like you've mentioned the infusion of e-commerce practices, right? But from a marketer's vantage point, and I love how you asked, like, "What's your digital marketing budget?" One of the topics that we've come up again, again, around again on this podcast and talked to almost every single guest brings it up is knocking down the barriers between marketing ops and technology, right, within a restaurant operation.
[00:32:43] And is that something you guys addressed in the book?
[00:32:48] Meredith Sandland: Hmm, that's interesting. You know, we talk about certainly marketing ops and technology, but I don't know if we talked about how the three come together. I think that's a really interesting question. Recently we talked about, you know, [00:33:00] how technology enhances operations, how technology enhances marketing and the consumer relationship, but the intersection of all three is definitely an interesting place to explore.
[00:33:10] And you know, the reason is because you can make any kind of digital promise you want. You can make a super sexy experience on the front end. You can promise all these wonderful things digitally to your consumer, but if your operations can't deliver them and can't fulfill on that digital promise, then your consumer's not going to come back.
[00:33:31] So at that point, you're going to find yourself having spent a bunch of money to acquire your customer, that you're not going to have a great lifetime value because you're not going to have a lot of repeat from that customer, right? So, certainly all three need to be working together in order to accomplish that.
[00:33:47] Carl Orsbourn: But nothing changes, right? It's the same, it's the same before the digitalization where operations had to work closely with marketing to ensure that marketing could promise something to consume as the operations could deliver on. The POS platforms of old [00:34:00] had to be effective enough to be out to allow operations, to use them and to be out to train on them effectively.
[00:34:04] So in that sense, I think the, the traditional challenges of being out to work across departments in this way still exist. What I would argue though, is that this digitization that exists within the internal channels of an organization can help communicate. We're working in a world that now of course, where many of us are working from home and things like this and geographical boundaries are being broken down because of technology and the ability to communicate.
[00:34:31] And so certainly for those of your listeners that are having small chains that are perhaps geographically disparate across the, across the country, those technology platforms to ensure communication can be a little bit more seamless to help people understand not just the what is changing, but the why, and to think about what does that mean for the way in which your organization is structured.
[00:34:54] You know, do you need a traditional multi-layered tiered system to be out to run your restaurant business [00:35:00] or could you run it in such a way that allows you to have technology? Do what otherwise would happen. Now, let me give you an example of that, Jen. So for example, in ghost, in the ghost kitchens today, you're finding that some operators are choosing to have video cameras in the kitchens, not just the monitor operational efficiencies and ways to be out to do spaghetti diagrams and to be out to check exactly the movement patterns to optimize the speed of creation of dishes, but also to remove the need to have constant management over their shoulders. And so that is a cost saving to be out to enhance the way in which a ghost kitchen operation can work for someone. And there's lots of others, of course, I'm sure you guys use the at Qu too.
[00:35:40] Jen Kern: Yeah. Well, I think the biggest thing, what I would argue is the biggest thing that happened during the pandemic, it hasn't the pandemic, is that before the pandemic and restaurants, marketers were really viewed and I heard this a lot as kind of the arts and crafts department. The ones that do the ads and the display and all that kind of stuff.
[00:35:58] And then early on in the pandemic [00:36:00] as ghost kitchens and virtual brands and things like that became, you know, quick options. Marketers became more involved in those technology decisions and in creating those strategies, right? Which I was hoping for all along by the way, but it definitely has been happening more and that's, that's sort of the shift that we've talked about a lot, right? And that's what we're seeing and seeing a lot more of and when it comes to, you know, operating your virtual brand and making those decisions about, you know, where, when, what, you know, what, what menu items we're selling, it comes back to marketing because you need that guest data, right?
[00:36:34] Or...
[00:36:34] Carl Orsbourn: Yeah. I mean, we, we as an operator and as Meredith with kind of finance and strategy background, we have never had as great appreciation of marketeers as we do today. Largely because you know, when we're selling this thing online to people we're having to actually walk the talk and finding the customers being out to engage with them online, to be out to understand what our own brand identity as two authors are. You know, we're running into those same challenges. And it's not [00:37:00] easy, Jen, it's really not.
[00:37:01] And you know, the advice that I would give to marketeers out there that have perhaps been more positioned around, as you say, that kind of arts and crafts, the aesthetics, the design of marketing, which of course is still incredibly important. It's actually, this digital marketing future is so critical, which is why I think, you know, digital marketers are probably the hottest property that you can get right now because it's tough.
[00:37:22] It's not easy. And it does call upon a new set of skills and competencies that weren't necessarily being harnessed a number of years ago.
[00:37:29] Jen Kern: So of those hundred people that you interviewed, that you talked about, how many of those were marketers?
[00:37:34] Meredith Sandland: Well, we have two entire chapters dedicated to marketing and that including the three chapters about consumer insights and the one chapter about virtual brands. So if you include all of them, you're really talking about six chapters that are pretty full, pretty clearly focused on, on marketing topics.
[00:37:51] So there are quite a few marketer oriented people who show up across those pages. Now not all of them probably have [00:38:00] marketing in their title, but to your point, a lot of them do have technology because of the two or so...
[00:38:06] Jen Kern: Right, right. Great. Okay, well, as we wrap here, is there anything else that you guys would like to cover that you feel like would be helpful for the audience in terms of, I know you are also experts in, you know, artificial intelligence and machine learning. We probably need a whole another podcast for that, but in any, any parting thoughts that you'd like to talk about?
[00:38:29] Meredith Sandland: Yeah, I think for me, it is this industry is... Tressie Lieberman, who is a marketer at Chipotle says, "This industry is endlessly innovative and that's what makes it so fun." The industry is so good at coming up with new products and shifting for consumer demand that that really gives me tons of hope that we can make it through this transition together.
[00:38:53] And I think the question now is how do you apply all of that innovation energy in a slightly different [00:39:00] direction to be really be thinking about incorporating technology into all of these decisions and to be matching your consumer where they are, which really is online.
[00:39:11] Carl Orsbourn: Yeah, I think that's right. Of course, step one, you all study what are the steps for owner operators to take. Well, step one is buying the book. That's that step one, Jen. I think they can get that obviously on Amazon right now. But if they'd like to support the first party platforms, you can go to delivering thedigitalrestaurant.com and get a copy direct from us.
[00:39:30] And we'll be happy to send one your way. And then we have a sister platform of the book called www.learn.delivery which is really there to continue the discussion to build a community of folks that are going through this kind of process together. And when they want to be out to speak to people like Meredith and myself and folks that we have on the platform that are experts in this specific area, they can get an unbiased kind of angle and hopefully get some support to help them on the journey.
[00:39:59] Jen Kern: So in addition to [00:40:00] getting the book, you two are both available for GG consulting sort of engagements or your, how are you, you know, also engaging with operators?
[00:40:08] Carl Orsbourn: Well, there's a lot of restaurants out there and there's only two of us. We do have a number of people that we have in our network that we also refer that we certainly recommend. Occasionally Meredith and I do a bit of consulting too, but the primary idea of this Learn.Delivery platform is to be out to take the perhaps the bits that didn't make it into the book or the questions that have yet to be answered and use that from to help people collectively continue to further their learning journey in this space.
[00:40:36] Jen Kern: Great. Great. Well, thank you so much, both of you, for everything you're doing to keep restaurants strong and viable and moving into the future. Really appreciate you guys joining me today. And for our guests, please do, go check it out Delivering the Digital Restaurant. It looks like an amazing book. I have my copy and I'm getting ready to dig into it, so I'm really excited about that. And just thanks for being awesome people [00:41:00] and really helping the industry thrive and get through really challenging times. So really appreciate you two coming on, hope you'll have a great day and I hope to see you very soon at a conference. Thanks guys.