Changing Your Service Model

An Interview with Tim McLaughlin

The hospitality industry is not for the faint of heart. For operators, it’s a sink or swim endeavor that often results in failure. In fact, approximately 60% of restaurants shutter within the first year of operation. That number balloons to 80% within the first five years. 

Knowing the challenge ahead, to flourish as a restaurant, bar, or winery owner, you need to follow a different service model.

You need to rethink the way you operate.  

We interviewed GoTab CEO Tim McLaughlin to discuss technology’s role in reshaping the future of service within the hospitality industry.  

Question: What does rethinking service mean to you?

Answer: Fundamentally, service means being available to the guests when they want or need you. Think about all the ways guests can get frustrated; then ask, “How do we eliminate these frustrations or, at least, limit them?” 

From there, the critical follow-up question is, “How can you improve your service cost-effectively?” 

Historically, operators simply increased staffing. However, unless you’re in the upper echelon of fine dining or restauranteering that’s neither practical nor cost-effective.

Question: How do you see the service industry changing, particularly in light of labor management?

Answer:The current labor management solution in the service industry isn’t sustainable. However, the answer won’t be found in copying competitors’ models; we need to look to outside industries for inspiration.  

Consider manufacturing as a model. The US manufacturing industry increases its output year over year but without the corresponding increase in headcount. 

The reason? They’ve adopted technology.

Today, the vast majority of manufacturing jobs are highly skilled positions—they’re the people who fix the machines that make the products. Restaurants have to adopt elements of this mentality to stay ahead. 

In the past, the restaurant industry has been reluctant to embrace technology. It has operated on the premise that technology takes away from the guest experience. But this premise is flawed.

When the wait staff is bogged down by rote tasks like credit card swiping and bill splitting, there’s less time to focus on guest experience. Additionally, manual tasks increase the room for error and, therefore, customer frustration. By automating tasks with technology, you allow staff to apply a greater focus on the most important aspect: the guest experience.

Question: So, that’s what GoTab is seeking to do? Balance technology with the human touch?

Answer: Exactly. We have never had a focus on getting rid of jobs. The opposite is true. When we launched in 2016, we were actually focused on solving the same problems we’re focused on today. We want to help hospitality businesses  grow more efficiently, which ultimately allows operators to scale and hire more, not fewer, workers.

We are here to  shift the paradigm in hospitality from a business model that is traditionally low margin, low profits, to one that is both profitable and attractive to innovators who spur on that change. 

Until recently, technology was never viewed as a strategic advantage that could grow your business or increase your profits. Now, for operators, you may not have a CTO, but you need someone who’s employing a technology strategy with an eye to the future. 

As a platform, we’re enabling all kinds of transactions. We believe that operators need to think about their brick and mortar location as a focal point for selling all kinds of goods and services. And we enable that by eliminating the most common guest pain points in a cost-effective way.  

Question: Can you give me an example of how you can fulfill unmet needs?

Answer: I was recently at a popular Brooklyn brewery and wanted to get dinner, but the closest food location was a pizza place two doors down. 

With GoTab, you can mix multiple merchants into one mobile order. Which basically integrates food to the table. So, the pizza place could  deliver to where I’m having my beer. This would create a synergy that’s mutually beneficial for both parties.   

A brewery we worked with did an analysis where they brought in a food truck one day a week, and that resulted in one extra drink per guest. That makes sense. Instead of people leaving early to go get food (and presumably more drinks elsewhere), they can stay longer. 

The way this technology solves customer pain points is simple, instead of losing out on revenue because they can’t meet a need—in this case, food—we create a competitive advantage that lets them increase profits without costing anything.    

Question: For operators using GoTab, what are some tangible changes they’ve made to the service model that have made the biggest impact?

Answer: The ones that are doing interesting things in my mind are the ones who mix old and new service models to meet the guests where they want to be. 

In restaurants, there are two major customer pain points. First, getting that initial drink. They don’t want to sit around trying to flag down a server. The second issue comes at the end of the experience, paying and splitting the bill. 

In the post-COVID world, some operators have incorporated some level of technology service. For instance, they’ll send someone out with the mobile POS for the initial order. This may work for some tech-savvy guests but may frustrate others. 

The ones that are doing interesting things in my mind are the ones who mix old and new service models to meet the guests where they want to be. 

In restaurants, there are two major customer pain points. First, getting that initial drink. They don’t want to sit around trying to flag down a server. The second issue comes at the end of the experience, paying and splitting the bill. 

In the post-COVID world, some operators have incorporated some level of technology service. For instance, they’ll send someone out with the mobile POS for the initial order. This may work for some tech-savvy guests but may frustrate others. 

Question: And this isn’t limited to guest-facing services, right?

Answer: Exactly. There are savings everywhere. You can  also use technology to optimize back-of-house functions as well. 

We integrate with accounting systems, saving you time and reducing data entry errors. We also provide smart kitchen displays to optimize the meal creation process.

Our smart kitchen displays change what the kitchen sees based on efficiencies. We let you measure fulfillment times and help you use data to see where there are areas of improvement, thus preventing long wait times and guest frustration.

Question: Does the system allow guest feedback?

 Answer: It does. And it’s direct, first-party feedback, which is so much more useful than third-party feedback since it’s more actionable. You know who orders what and can limit it so that the party’s comments are specifically tied to the items they ordered. 

This eliminates the psychological phenomenon where a guest is angry for any reason—it could be trouble finding parking, a long wait for the table, or a slow time to get their order in—which completely tarnishes their entire dining experience and then impacts their review of the food itself. 

With our system, customers can give real-time feedback. Our operators receive 20% participation, which is high in the industry. Additionally, the feedback is nuanced. Operators can see exactly what customers enjoy (or don’t enjoy) about the experience instantaneously. 

Question: How do you see the service model changing in the next 5 years?

Answer: We’re going to see a lot of change in the near future, especially in the markets that previously couldn’t afford to adopt technology to improve service experience.

Historically, most digital ordering was done off-premise. On-premise has been mostly verbal. But COVID has accelerated the embrace of on-premise digital meal ordering. 

The end result will be internal efficiencies and cost savings for operators and a better overall service experience for guests. 

Here at GoTab, we believe that operators should let their staff do what they do best: offer an unmatched service experience. Then, let systems handle the rest.