Olo Finds ‘Holy Grail’ of Reaching Every Single Restaurant Customer

Olo CEO Noah Glass believes his company is on the cusp of achieving what he calls the “Holy Grail” of restaurant marketing—the ability to tie 100 percent of transactions back to consumers.

The company traditionally touches digital ordering, which Glass estimates at 16 percent of purchases in the food and beverage industry. Olo sees a large amount of data on those transactions. That includes what items have been ordered and how things have been modified (what customers remove, add, or substitute from a dish). The group pulls all of those learnings back into its guest data platform where it can see the whole transaction history of that customer. Based on that, Olo can understand who that customer is and implement new features like Smart Cross-Sells, an AI powered solution that suggests personalized items during a guest’s ordering and checkout process.

Then there’s the other 84 percent that Olo isn’t able to see. Traditional orders where the customer is a nameless, faceless person. To fix that hole, Olo has partnered with Qu, and more recently NCR Voyix, its largest POS partner, for Olo Pay to be the payment processor connected to POS transactions. And that’s whether they take place with a cashier or an employee at the drive-thru. Thanks to this innovation, Olo can pull order information. Not just the payment amount but the same ingredient-level detail of ordered items and their modifications.

READ MOREOlo Wants to Help Restaurants Build a Digital Powerhouse

So for the first time, according to Glass, the restaurant industry can operate in the way e-commerce merchants do where they can understand the full order history of all costumers. Concepts can gather guest lifetime value with much greater fidelity.

“It was exciting to announce that and then to see the reactions from primarily restaurant marketers who are saying, ‘Oh my God, this is this massive unlock. I’ve been waiting for years of really being able to see somebody’s full transaction history and not just have that insight about this tiny fraction of 16 percent but to have it for all 100 percent,’” Glass says. “And our goal is to replicate that kind of set of capabilities with all the different point of sale partners that we work with. Qu is one of the smaller ones. NCR is the largest. It’s like another three dozen in between, and we’re going to go one by one and have customers advocating for, ‘We want to do this too.’”

Olo is also working to capture more data via kiosks, a growing innovation among quick-service restaurants. The company has a partnership with Bite kiosk, an innovative machine that can look at the face of opted-in a customer, show what they ordered last time, and make recommendations about what else they may like.

“That’s an example of, you’re no longer an anonymous guest,” Glass says. “You’re having this highly personalized interaction on the kiosk. And also it’s more for the restaurant than staffing somebody there to take your order. Things like that I think are really spot-on in terms of how do you keep with that theme of hospitality but really take it to scale and make it make business sense.”

The news comes amid a continued growth period for Olo. The company’s Q1 revenue increased 27 percent year-over-year to $66.5 million. Gross profit increased 11 percent year-over-year to $37.2 million and was 56 percent of total revenue. The company worked with roughly 81,000 locations, up approximately 1,000 quarter-over-quarter.

Olo’s work with POS systems also coincides with restaurants, such as McDonald’s and Wendy’s, losing lower-income customers. Operators are seeking advice about how they can use the company’s services to drive traffic without having to resort to discounting or offers that rely too much on third-party delivery providers. The answer usually comes back to understanding guest lifetime value. Glass used the example of Sonny’s Barbecue, which used one of Olo’s platforms to identify that its top 15 percent of customers represent 50 percent of overall sales. Being able to identify who those people are and driving traffic from them would have a disproportionate impact on overall transactions and sales. This type of guest personalization is exactly what Olo is focused on, like Smart Cross-Sells. Around 10,000 locations are already using it even though Olo announced the feature in April.

“Knowing what’s in your cart, being able to cross sell and suggest to sell the product that best aligns with what you already have in your cart, it sounds like a small thing. It sounds like an obvious thing. It is an obvious thing,” Glass says. “It’s been happening in broad consumer technology— Netflix, Spotify, Amazon, YouTube—for years and years now. But being able to do that in this industry with all the data that we see, the results have been incredible. We’ve seen a 10 percent lift in basket size versus traditional upselling. … We think the ability to use data and then AI and machine learning to activate that data and drive results is a really exciting time to be living through. And that’s our mandate as an enabler for restaurants.”

More chains continue to hop on Olo’s bandwagon. Dutch Bros, with nearly 900 locations in the U.S., will scale mobile ordering for the first time using the company’s Olo and Pay modules. Quzinos implemented Olo’s Ordering, Rails, Dispatch, Pay, and Engage Sentiment modules.

more

Leave a comment

Your email address will not be published. Required fields are marked *