Navigating the surge to offer an enhanced customer experience

By Peter Dougherty

In an ever-evolving industry, restaurant operators are continually seeking innovative ways to increase revenue and elevate the overall guest experience. Traditionally, surge pricing has been considered a strategy to manage demand during peak hours. However, in recent years, guests have become more conscious about spending and surge pricing has become unpopular with guests. The focus has shifted towards leveraging technology to drive additional revenue and enhance the guest experience. Restaurant operators are implementing various technology features and are reshaping the landscape.

Imagine a scenario where a restaurant manager notices a consistent surge in customer traffic during weekend evenings. Instead of implementing traditional surge pricing, which might lead to customer dissatisfaction, the manager turns to technology to delve deeper into the patterns.

  1. Dynamic menu pricing: Unlike surge pricing, which relies on operators adjusting based on time-bound peak demand moments, dynamic pricing maximizes revenue for operators by adjusting prices based on real-time demand, optimizing resource allocation. This benefits guests through transparent pricing and potential cost savings during off-peak hours. Advanced point-of-sale solutions provide real-time data on the popularity of menu items, enabling restaurants to strategically adjust prices to maximize revenue without resorting to across-the-board surge pricing.
  2. Personalized marketing and loyalty programs: Technology enables restaurants to collect and analyze customer data, allowing for the creation of personalized marketing campaigns and loyalty programs. To incentivize loyalty and boost revenue during slower periods, restaurants can launch targeted promotions for these customers. Personalized offers, powered by data analysis, are sent via email or mobile apps to encourage return visits. By tailoring promotions to individual preferences, restaurants can increase customer retention and drive repeat business.
  3. Contactless ordering and payments: The rise of contactless technology has become integral, especially in a post-pandemic world. The best POS solutions support contactless ordering and payment options, providing a frictionless experience for guests and improving table turnover. As a group of diners finishes a delightful meal, the server presents the bill. With a user-friendly POS solution, patrons can easily navigate the digital payment options. Instead of fumbling for cash or waiting for a physical card terminal, they can swiftly complete the transaction on a handheld device, tablet, or even their smartphones.
  4. Customizable tipping options: Technology allows establishments to offer patrons a range of tipping options, from percentage-based tips to fixed amounts or even suggested tip amounts based on the total bill. This flexibility caters to diverse preferences, making the tipping experience more personalized and accommodating. Digital tipping features prompt patrons to add gratuity while paying, streamlining the decision-making process. The immediate and integrated nature of this functionality often leads to higher tip percentages, as guests appreciate the convenience of expressing their gratitude without additional steps.
  5. Integration of AI and machine learning: AI and machine learning are increasingly being integrated into POS solutions to predict customer behaviour, optimize inventory management, and suggest upselling opportunities. This gives restaurant operators actionable insights into how to adjust their strategies to increase customer engagement.
  6. Increased operational efficiency: Technology doesn’t stop at customer-facing strategies. It can also help optimize backend operations by providing insights into inventory management, staff performance, and operational bottlenecks. This holistic approach ensures that the entire restaurant ecosystem is geared towards delivering an exceptional guest experience.

The adoption of technology in the restaurant industry is revolutionizing the way operators approach revenue generation and guest satisfaction, beyond mere transaction processing. By leveraging the right technology, restaurants can not only avoid the pitfalls of surge pricing but also create a dynamic and responsive business model, enhancing the overall dining experience and boosting profits without resorting to unpopular surge pricing strategies.

The result is a seamless guest experience, increased customer satisfaction, and a more profitable operation—all made possible through the intelligent use of technology and data. As the industry continues to evolve, embracing these technological advancements will undoubtedly play a pivotal role in shaping the future of dining.

Peter Dougherty is the General Manager of Hospitality at Lightspeed. Mr. Dougherty has helped grow Lightspeed from Startup to Scale, playing a key role in launching Lightspeed Restaurant in the Americas, rebuilding core components of the GTM teams, and turning Partnerships into one of the fastest growing groups in the business.