How many times have you purchased a product, only to find that you are not getting the value or functionality for which you paid?  You become annoyed with how much money you’ve spent and then curse the product or company, maybe even throwing said product away.  All the while, you never bothered to open up the user manual or build true fluency.  This is a classic case of the user not understanding the product and blaming its creator.

Take the iPhone. How many of us have spent $499 for version 4.0, yet have never used the Face Time function? We may be frustrated that we haven’t received our money’s worth, but are only using our iPhone for the basics: calls/texting, checking in on Facebook and playing Angry Birds. Could we say the same about OpenTable, the restaurant industry’s leader in online reservations?

San Francisco’s beloved “Incanto” owner Mark Pastore recently penned a well-written article titled “Is OpenTable worth it?” where he expresses his frustration at OpenTable being the “nearly exclusive gatekeeper to this country’s restaurant seats” and questions its true value to the restaurateur, whom he says spends more money on OpenTable than it is “actually worth.”

He performed an informal survey of a dozen or so restaurant managers and owners throughout the country, most of whom were not happy with OpenTable.  Many referenced feeling held hostage by “a hugely successful multinational corporation (that) has skillfully out-executed and out-maneuvered its competitors to create a valuable business.” What those that participated in Mr. Pastore’s survey don’t mention (and the one member of the dozen that felt OpenTable increased the value of his restaurant probably knows) is what we have found to be the most important ingredient to OpenTable’s recipe: the software.

The OpenTable software is the Face Time of the iPhone. It is a catalyst to optimize your FOH operations: the analytics, the metrics, data and health of the business. Do you know that the table turn time report allows you to better optimize seating?  That tracking server performance may allow you to further delve into a server’s lack of dessert/coffee sales? Also included is seat utilization statistics (is your host staff seating two tops on four tops all night?) and the ability to capture guest likes and dislikes, VIP’s – naming just a few – but only if you use it.

To be fair, the price of OpenTable assumes you will use the robust software, software that can be overwhelming in a world of user-friendliness. OpenTable is growing faster than the company can keep up with, thus unable to provide customer service that provides assistance in receiving 100% utilization of their product. While there is phone customer support and a video-filled learning website (www.otlearningcenter.com), these only review the entry-level functions most users already know – and what we know at Founding Farmers – the meat of the burger is in the analytics; functions we were intimidated by at first.

We recently decided to create a case study by using an OpenTable specialist to dive into these analytics and help us either find value in OT or find a way to escape its clutches.  As one of the most booked restaurants in the greater mid-Atlantic region, Founding Farmers is an OpenTable customer with an astronomical monthly bill: roughly $6,000.  What we weren’t doing was implementing the actual function of the software, causing a bitter taste in my mouth, similar to those in Mr. Pastore’s article.  I sort of felt that we were hooked on it like an addict could be hooked on drugs; it generates a lot of reservations that I think we may get anyway—but I’m scared to stop using it—its just a magic box sitting in the corner.  I have no idea what else I could be doing with it.  So, we ended up with very expensive reservations!  There were two choices: remove OpenTable or see if it was possible to get the money out of it that we were putting into it.

The next 45 days were spent using Founding Farmers as a test site to definitively answer the question “Is there Return on Investment using OpenTable?”

We began monitoring table turn times by reports, only to find the reservations sheets were set to have tables turn at least 45 minutes later than they were actually turning (turn time/seat optimization). By following the slot utilization function, we found out that the host staff had been reserving tables for two people in reservations slots created for four, losing 50% of the business designed for that reservation slot.

We monitored server table turn time averages, which allowed us to begin monitoring the ‘why’ of shorter turn times and what wasn’t happening at the table – desserts/coffee being sold, diners being rushed through service by staff, and the like.

We used the actual reservation sheets and floor plan to manage the current shift, in and of itself creating an efficient system in which we kept accurate track of covers, where diners were during their meal, and more accurate wait times via the waitlist.

We started running VIP reports filtered to guests who had dined more than 25 times, marking their profiles as VIP regulars thereafter.  This has given the relationship with the guest back to the restaurant to maintain, where we can now acknowledge guest loyalty with appreciation.  Not only valuable, but actually priceless.

While there are many more details to share about the functionality of the software and the total value, the easiest conclusion we can convey is that at Founding Farmers, sales are up 15%, yet the monthly cost with OT is still the same.  Realize that this is a 15% sales increase in a restaurant that was already extremely busy.  The optimization utilization of the software was the catalyst for the sales increase; we could not have been as busy through this analytical lens without the OT software.

Founding Farmers sees the software as having amazing potential and functionality that delivers value.  It is so much more than an expensive reservation system.  There are many end users compelled to use it, but without knowing how to get the value out of it. To see results from the software, you need to master it—which means either taking classes, making a commitment to self-teaching, or paying a third-party consultant.  While it would be nice if the software provider could ensure the end-user is fluent, the vast majority of software providers don’t always ensure that happens.

With OpenTable, we see them as not being able to ramp up their user development programs fast enough to take OpenTable users to the next level. The end user is responsible for their purchase and getting the end value, but if a company wants a long-term relationship, they have to help people get that value.   OpenTable needs to find a way (either in-house or through a certified third party network) to get the end-users fluent, or the sentiment reflected in Mr. Pastore’s article will continue to foment.

We could blame OpenTable, but in the end, we had to blame ourselves for installing, then failing, to do the hard work of getting fluent with the system.  In the day and age of the quick fix, the magic pill, and business that moves at the speed of light, we realized that as the end-user, we MUST be in control of the value proposition.  Founding Farmers could still feel held hostage by our addiction to OpenTable from which we couldn’t escape, or we could finally put in the hard work to get the value out of it.  We chose the latter. In doing so, we’ve changed our loathing of the ‘drug’ into loving the hero.  OpenTable’s software is clearly a winner with regard to overall return on investment – but only if you use it.

Update: There’s been a ton of conversation regarding the great OpenTable Debate.   From Twitter (@samsifton, @amandahesser) to media giant blogs including Inc.com, TechCrunch.com, Seeking Alpha and Reuters, the restaurant – and business – world has very strong opinions on the value of this omnipresent company.  OpenTable is even jumping into the conversation with their perspective, visible on the OpenTable blog.

Founding Farmers celebrated its second anniversary in September. Since opening, the restaurant has been reviewed by Yelpers more than 780 times – more than one review per day.  Dan Simons, VSAG Principal and Concept Developer of Founding Farmers, has responded to every single one of those reviews.

He and his commitment to interacting with every guest who takes time to comment on their experience, is the subject of today’s Yelp Web Log. Check it out. Comments welcome.

A recent Restaurants & Institutions magazine feature highlighted the leading efforts of restaurants like Baja Fresh and Founding Farmers, to turn their best practices in operations and environmentally-friendly appeal more green and are recognized for their efforts to differentiate themselves for consumers and guests that are concerned with reducing their own environmental impact.

Last month, Dan served as a panelist at George Washington University with Women in Business to discuss Corporate Social Responsibility – a big topic with big leaders from Dupont and entrepreneurs all focused on maintaining good CSR VSAG is setting new – and realistic standards in the world of hospitality and will continue to share and lead by diverse and informed means.

A recent article in Energy Daily highlights the benefits of saving green – like eating green at your favorite restaurants or redeeming points at any number of earth-minded retailers.  Read all about it. Then, join EarthAid and start saving your own green!

Though he majored in international business at GW,  Simons says he realized early on that the restaurant business was for him. After working at the Exchange, Simons joined the local T.G.I. Friday’s his junior year and worked his way up to the company’s corporate training program by graduation. In 1994,  Simons moved to California to work at the then-relatively unknown chain the Cheesecake Factory, where he met his mentor and future business partner Vucurevich. After a move to Dallas to help Vucurevich manage eatZi’s Market and Bakery,  Simons returned to D.C. in 2004 to launch their consulting firm, Vucurevich Simons Advisory Group.

Coming back to Washington and opening Founding Farmers near campus was like returning home for Mr. Simons. “When I first visited D.C. in eighth grade, I was amazed by the city, and knew I wanted to go to school here,” says Mr. Simons, who now lives in Garrett Park, Md., with his wife, three children and two dogs. “GW really made the city home for me, and it’s been great to return. I cannot imagine living anywhere else.”

The success of Founding Farmers has truly been a “dream come true” for Mr. Simons. “To have a hit like Founding Farmers requires a blend of many things, including good food and hardworking people,” says Mr. Simons. “But you also have to have a healthy dose of luck.”

Surveys show the dining experience continues to be reshaped by consumer needs and desires. In a recent poll conducted by Technomic, Inc., consumers were asked how they would prefer to receive their takeout food. A surprising four out of ten consumers said they prefer to have food delivered, tying the number opting for carry out. Additionally, almost half of all women surveyed preferred home delivery. Consider those numbers in the context of a social climate that no longer views dining out as a special occasion and the opportunity for growth in quick-service delivery is apparent, provided the restaurant can generate a steady stream of orders.

But before buying car toppers and hiring drivers, operators should take into account all that is involved in offering home delivery—and take a look at their current operation model.

Take menu for example. Some foods lend themselves to delivery. Others, not so much. Cold sandwiches, salads with dressing on the side, and wrapped items like burritos are the kind of dishes that travel best, according to Robert L. Sandelman, CEO of California-based Sandelman & Associates. What doesn’t travel well, he says, is quick-service’s most popular item, french fries. “Fries get soggy and lose heat quickly,” Sandelman says. “The second half is less good than the first half. It’s the same with burgers; they cool quickly and the buns can get soggy due to grease or condiments.”   For a burger chain trying to get into delivery, that means the right packaging is critical for a successful program.

Then there is the matter of additional labor. Drivers must be recruited and trained. “Answering phone calls at store level presents the conflict of higher labor costs versus poor service,” Simons says. “Who should you ignore: the customer at the counter or the ringing phone? Also, who checks the order before the delivery person picks it up for delivery? Other questions to consider include is there space to package and hold orders for delivery and is the space visible to dine-in customers?” A new point-of-sale system designed for delivery might also be needed.

In weighing all factors, don’t forget to consider the all-important bottom line. Deliveries should be targeted to large groups of people yielding a larger ticket, according to Sandelman. “Delivering one sandwich wouldn’t be efficient. Once you tack on a delivery charge, the customer might pay more for the delivery than for the item.” He also points out that few delivery orders include drinks, a high-profit item for quick-serves.

Still, some of the biggest names in quick-service have considered or experimented with delivery. McDonald’s tested programs in the United States and Great Britain. KFC and Subway franchisees can choose to deliver in some parts of the country. Some Boston Market stores were doing delivery through July 2006 but general delivery has since been phased out, says Kelly Heisler, spokesperson for the Golden, Colorado–based company. “We phased out delivery to focus on our restaurants, but we may consider adding delivery services in the future,” she explains.

Other concepts continue to operate successful programs.

Read the full article.