Hot Trends in Restaurant Digital Signage/Menu Boards

Test data that proves the value of digital menu boards has been available for several years.  However, you have to take advantage of the many features of the digital menu boards in order to obtain their full value.  I say that because, for various reasons, restaurant chains have been very slow to take advantage of many of the primary features of digital menu boards.  Even some of the major chains that have rolled out indoor digital menu boards continue to use the much the same as they did their old style boards. They have not use the additional features to their full extent.   This is very frustrating to me because I’ve been in the digital menu board business for so long assisting in the development of these features. On the other extreme, I’ve seen many of these features used as gimmicks just to show the new technology and overused to their detriment.  Examples of this is when I see a digital menu board going into a full takeover mode (a random message covering all the screens) when customers are trying to place an order.  Other examples are too much video or movement in the wrong places that disturbs the flow and purpose of the menu board.

On the positive, side I’m starting to see some restaurant chains use digital menu board features we did not think of when we developed them.  An exciting new trend that has emerged very quickly with the use of digital menu boards and digital signage is what we categorize as “analytics”. Digital menu boards and digital signage are great communication tools that can be used to manage restaurants much more effectively. Analytics is an example of that.  Collecting and analyzing information from the menu board system about the purchasing habits and preferences of your customers or identifying trends allow restaurant owners and operators to fine-tune their operations and manage their restaurants much more effectively.

Another exciting new technology that’s growing very quickly is new technology products and applications that are being used to make digital menu boards and digital signage more intelligent.  Since they are important communication tools it just makes sense to develop their intelligence to keep up with the communication tool that has dramatically changed the world – the cell phone.  Top management of one of the major restaurant chains recently made a statement that they have lost touch with the last two generations and that is a major reason for a drop in their business. The cell phone has been the primary communication tool of the last two generations and has quickly become the same for all other generations. Today digital menu boards and signs are now intelligent enough to communicate with intelligent cell phones or smart phones.

A technology that has aided in digital menu board and digital sign intelligence is the development and use of beacons.  Beacons placed in or near digital menu boards or signs can alert the menu board and management when a loyalty member (frequent shopper) is in the restaurant or near the board.  Beacons allow the menu board to recognize and communicate with the customer through their cell phone.  Recently there has been a major improvement in the effectiveness of beacons and at the same time a major cost reduction.  The new beacons will work in any appliance with speakers.  An application must be downloaded on the customer’s cell phone in order for the boards to communicate with it. There are also generic applications  developed that will do the same so customers don’t have to install applications for every restaurant or retail chain they visit.

It does not take a vivid imagination to see the value of intelligent digital menu boards and signs.  They can do many helpful things to improve the business operations and the customer experience. Examples are to show the last last order and/or preferences of the customer when they approach the board. Others are to pass on coupons and specials, aid in credit card payments, plus many other useful options.

Another major technology developed several years ago that can make digital menu boards much more intelligent is the use of small cameras in the boards with facial recognition software.  That system in digital menu boards and signs would allow the board to collect information about customers viewing the board such as sex, age and ethnicity. That information could be analyzed and become very valuable to the restaurant operators.  It can also be very valuable in managing the content being played to approaching customers. However, this technology has not yet been adopted in a major way in digital menu boards and other digital signage.

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How is New Technology Affecting Your Business

New technology is increasing at an exponentially faster rate. I think most people would agree it’s making our lives better and raising our standard of living. If you own a business this can be a threat as well as offer some huge opportunities. The opportunities can be in the form of new products or services and/or lower cost. However, if a business owner today does not keep up with new technologies their product could be rendered irrelevant or their process noncompetitive very quickly. Unfortunately, keeping up with new technologies and how it affects your business is becoming more difficult.

It has been a long time since I was in business school but I still remember what my professor taught me about this subject and it’s still relevant. In the past a typical manufacturing company would spend a lot of money to develop a product or line of products. When this upfront cost is absorbed through product sales, it then becomes what’s known as a “cash cow”. The “cash cows” could last for decades with some minor improvements. Today the “cash cow” period, or product life cycle, has grown much shorter and is continuing to do so. This forces companies to be much more careful about how much they spend to develop new products. The projected life of the product is critical and more difficult to predict.

Another lesson my professor taught me is “You must understand exactly what business you are in”. One of the examples he used was Wells Fargo. If they truly understood they were in the business of delivering passengers and mail they may still be in business today and who knows how large they would be. Instead they thought they were in the stage coach business so when that mode of transportation became irrelevant they went out of business instead of adopting the new modes of transportation as they became available.

I have been in the menu board business for almost 40 years and I am seeing a huge shift in that industry recently as the result of new menu board technology. Just as in the Wells Fargo example. Thankfully I saw the change coming and cashed out of a menu board manufacturing company I co-founded while we had a 40% market share and doing very well. Unfortunately my partners did not agree with me and refused to adopt the new technologies.

My company fabricated menu boards using metal with plastic panels. They were basically light boxes holding printed graphics. We sold the light boxes to new restaurants and sold a large volume of graphics because they changed the graphics often. As a result graphics were a large part of our business. Today these light boxes are being replaced with LCD displays (TV’s) connected to the Internet. The graphics are created on a computer and downloaded on the displays over the Internet. The content on these displays are changed automatically several times each day. As these new menu boards are installed the graphics business will be gone.

I have been a pioneer in the development of this new technology and I have tried to convince other menu board companies to make the switch with me. Unfortunately most of them have been very slow to adopt this new technology. In most cases the switch has been too extreme for them. More sales of the new menu boards are made by audio video companies than traditional menu board companies.

My digital menu board business will be 10-20 times more than what we did at my old company because the cost of the new boards are so much higher and my volume will increase. However, my total number of employees will be much smaller and the margins much lower. The jobs that will be eliminated are manufacturing jobs but some more technical jobs will be added. I think we are seeing the same switch in most industries in the US because of technology.   

Digital Menu Board Tsunami Part 2

I hear some rumbling in the distance! Could it be the start of that Digital Menu Board (DMB) Tsunami I predicted two years ago (blush)? I’ll tell you some of what has happened and you can decide for yourself.

McDonald’s installed DMBs in all their McCafe units a couple years ago. That was a surprise to many of us because of the horrible experience they (and a couple other chains) had with a DMB rollout they did  in a large number of restaurants several years ago.  The prior rollout was a failure because DMBs had not yet been fully developed. However, they did learn the value of DMBs. Many new concepts are using digital menu boards and several small chains have made the switch.

Recently three major QSR chains issued orders for indoor DMBs. The order sizes range from 1,000 screens to 32,000 screens. Is this enough of a shock to start the tsunami? On the flip side one major QSR chain decided to remove indoor digital menu boards at all the 150 sites they had been testing for several years. They did not have more than a couple with drive-thru DMBs. I will discuss the reason for the removal in my next blog.  

All three of the chains mentioned above have drive-thru service yet none ordered digital drive-thru menu boards. If seventy percent of sales at two of the large chains and approximately 50% from the third (and the chain that removed the 150 test units) comes from their drive-thru, why do you think they are not ordering DMBs for their drive-thru? They cannot take advantage of many of the most valuable benefits of DMBs without a complete system including both indoor and outdoor boards.

Still to this date no major QSR chain with drive-thru service except for Tim Horton’s in Canada has rolled out a complete system with both indoor and drive-thru. Although they had some problems with their digital drive-thru boards Tim Horton’s loves their DMB system and are totally committed to it.

If you attended the DSE in Las Vegas this year you saw evidence of some significant investment in Outdoor Digital menu board development by several companies, including one major screen manufacturer. You also saw evidence of this at the recent NRA show. Do you think these companies would be investing in outdoor boards if they did not think something big was about to happen (more rumbling)?

Frankly I don’t think you will see a DMB tsunami happen until a better outdoor board is developed. 

Will the VARs Dissappear in the Digital Menu Board Business?

 

 

I have attended a huge number of trade shows and events the past several years related to digital signage and digital menu boards. At all these events almost all the display manufacturers and distributors make the statement “We always sell through resellers and never to end users, our resellers are important to us”. In the past I have known of a few cases where that simply was not true but recently I have learned that the last two major orders for digital menu board systems (Burger King and Dairy Queen) have gone directly to a major LCD display supplier with no resellers involved and a third major (Yum Brands) will go direct when and if they place an order. 

Does this mean the days of the VAR’s or resellers are gone? It happened in the hospitality market and now will it happen in the QSR Market? It sure looks to me like it has already happened. The fact that another of the largest and most respected display suppliers has recently hired a sales team to make direct sales calls on large QSR companies to better compete with the display supplier that has received the orders mentioned above is further evidence of this.

If the resellers are eliminated is that wrong? Since I am a reseller in those two major markets my opinion may be bias but I think it is a mistake. When the sales team for the display suppliers is off making other sales who will provide the ongoing service to the accounts they have sold? Can the display supplier do it? I believe that will be a problem.

I recently started a project of organizing a large group of qualified resellers to help them get trained to sell digital menu boards at a more competitive price and compete better with the large display supplier that received the major orders. When the display supplier learned of my plan they wielded all the political influence they could muster to kill my plan.

A typical reseller will normally buy where they can get the best deal because the competition is fierce. On large projects they must know who their major competition is. How good can you feel about the deal you are getting if you are getting prices from your strongest competitor? It may not be possible for individual resellers to compete in these markets but we can as a group.

What it Takes to Sell Large Projects

I have been asked to write blogs and articles about my area of expertise which is digital signage, or more specifically, digital menu boards. Because I have been spending so much time working on a very large project I have not had time to write anything recently. Most of us write about important things we have learned because we hope it will help others. Working on my large project gave me the idea for what I’m about to write.

When I look back over my 40+ year career in displays and menu boards I realize what I get the most excited about is selling very large projects. Every time I think about one it is like remembering a great exciting story. So, I thought it may be helpful for some people to pass on what I have learned about selling large projects. Following are some of the most important elements.

1. Your product is the most important. You must have a viable product at a competitive price that your prospective customers need or is a good investment for them.

2. The company you are selling for is also very important. The best sales person in the world cannot sell a large project without a good company to support what they sell. Good companies want to hire the best employees and good employees have to be very selective about the company they work for, especially top sales people.

3. Honesty is much more important on large projects than small projects. It is also more important when you sell a new technology. You can’t sell a large project unless your prospective customers know they can trust you because their jobs will be on the line. People responsible for making large purchases are very skilled at determining how honest you are. I’ve been on sales calls with sales people that always seem to answer “yes, we can do that’ or “my company is the best at that”. Those answers hurt you much more than a simple “I don’t know for sure but I will find out”.

There are times when this can be difficult. As an example, top management at one of the last companies I sold for told me to tell my customer something I knew was not true. I refused to do that and eventually lost my job because of it. However, there has never been any doubt I made the right decision.

4. You must be a good communicator and ask good questions, then listen well to the answers. You must also remember communication is not just the spoken words but also how they say them. It’s critical you know exactly what your customer wants and as much about them as possible. You need to know the decision maker(s), all the influencers and the roles of everyone involved in the project.

Many sales people tend to be so worried about what they are going to say next they don’t listen well to what their customer is saying. I have trained many sales people and the first thing I do after a sales call is ask them what the customer said they wanted and what were some of their concerns. It is usually shocking how little they can remember about what the customer said.

On large projects it may necessary to understand the political situation in large companies in order to plan a good strategy and stay out of trouble. As one example, most QSR restaurants are owned by franchisees. However, if you try to sell a large project to the franchisees without corporate approval you will make enemies of the corporate people responsible for approving your project and it will go nowhere.

5. You must understand the financial resources of the company you are selling, how it will be paid for, who will pay for it and when. A good knowledge of this saved a couple of the largest projects I have ever sold.    

6. Don’t ever sell a bad job! You can spend 20-30 years building a great reputation and lose it on one bad job. If you are not sure the product will do what your customer expects it to do, don’t sell it until you are sure. It will cause you more damage than any gain you will ever receive. I can give many examples of this in my industry.

7. On large projects you must plan very carefully and have a great strategy for making the sell, then work very hard to follow it. You will need backup plans for when something goes wrong. This will help you when you have to think on your feet and make decisions quickly and confidently. This may seem like a lot of work but it’s something I enjoy. It’s like a military leader planning a large battle strategy.

8. Last but maybe the most important, you need confidence. You have to decide and KNOW you are going to make the sale or you’ll never make the big ones. If you don’t have the “I’m going to do this or die” type of attitude you will not give it your very best when things go wrong, as they always do. Any doubt will affect your performance negatively. You will not get the best out of your team that is always involved in large projects without such confidence.

9. After you sell a project remember what you did right so you can use it on the next project. If you lose it do your best to find out why. Unfortunately we seem to learn more from our mistakes than we do from what we do right.

What are the Major Limitations in Your Business?

Several years ago I left a manufacturing company and started my own business in digital signage, a new technology.  I had many years of great experience and a good business education so I was very confident and expected to use those assets to grow a successful business quickly. Although those assets helped I discovered they can also hold me back or limit my success. Although the basic fundamentals still work, simply repeating the things that made your business successful 10 or 20 years ago will not make it successful today. Stop and think about how many people you know that launched successful businesses years ago but have failed in their attempts to do the same recently. I know several that refuse to change and continue to do what made them successful in the past.

The way most successful companies do business today is very different than it was just a few years ago and changes continue to happen even more quickly. If you don’t stay up with the important changes (not all of them) you will be left behind very quickly. Companies, like people, are either getting better and growing or falling behind and shrinking. Someone who’s opinion I respect very much told me that in today’s economy your company has to grow by at least 10% each year just to stay the same and I believe that. Following are some of the things that have become more important in order to keep growing.

1. Keep up with technology. Not just the technology used in your business but also technology used by your customers and the general public. New technology can offer you more opportunities for growth or it can make your product irrelevant and useless.

2. Remain flexible. Because changes come more quickly you have to be flexible enough to change more quickly. Keep up with the changes and adjust as necessary.

3. Get educated. Continuous education is now so critical that an education plan should be part of your business plan. Your people have to be continually educated on your products and the new technologies you use. The business owner or manager also has to keep up with what is happening with your customers, their customers and around the world.  The world continues to get smaller and what happens in the U.S. and other countries has a large effect on your business.

4. Keep an open mind. It’s human nature to establish beliefs and opinions then just hear the things that support and confirms those beliefs and opinions. Not keeping your mind open to new opinions and possibilities will severely restrict your growth.

Today I was rea…

Today I was reading a magazine that is read by most people in the restaurant business. I was shocked at the number of formerly successful restaurant companies that filed for bankruptcy. I also read that several old successful companies were upgrading and were opening a record number of new restaurants. It seemed odd to me that some were hurting in this economy yet others were growing. How can that be?

During slow or difficult economic times most companies do what they can to reduce cost in order to survive. Some of the things they do should be done when business is good but the slow down makes the move more critical. Many also stop investing in new products and services that may make them more efficient or increase sales. However, there are times when that may not be the best move.

When customers spend less we all have to compete harder for the remaining business or we could be one of the many companies we see filing for bankruptcy. In today’s business world, if we don’t strive for constant and continual improvement we will lose our customers to those that do. How many great businesses have you seen that started out very successful but eventually faded and died if they did not follow that rule?

I think many companies suffer from following the old saying “If it ain’t broke don’t fix it.” However, if you aren’t moving forward you’re going backwards because your competition is moving forward. I believe that’s the answer to the question.

How Do You Teach Creativity?

How do you train your sales people and sales engineers to sell digital signage? When you hire people for these positions how do you test them? Since I’ve been in the digital signage business I have learned the most important quality for these people is something that is not taught in school, creativity. The days of simply learning your product and pitch it to your prospect are over. It’s gotten more complicated. Now they have to understand what the prospect needs, work with the engineers to help design the solution and show the prospect how to use it. I don’t mean adding cute little features that only make the product more expensive, but features that solves problems and meets needs.

A great way I have found to test prospective employees for these positions is, if you are selling digital menu boards take them into a restaurant and ask them come up with ideas on how digital menu boards can be used to increase sales or reduce cost.  That may sound a little difficult but if they can do that you usually have a winner. For continued education after they are hired, I like to take them out as a group and do the same thing. I have gotten some great ideas for new products or features for existing products that way.

A small company with very creative people or a larger company with small creative teams will usually be very successful. It reminds me of a comment Bill Gates made. He said “I fear the two creative people in a garage type of companies more than I do my large competitors”. You look at some of the recent huge successes and you will understand why he said that.

Is It Time To Hire More Employees?

Earlier I wrote a couple blogs about the down economy and how to survive it. Recently I have been thinking about ways to take advantage of the our current economic situation and be better prepared when it rebounds, as it always does. Now is a great time to be thinking about the employees you will need when you start ramping up again. Many of the experts say there will be a shortage of engineers, IT personnel and other technical personnel, so maybe you should start looking now while there are so many looking for jobs. The business I’m in (Digital Signage), like many others, continues to become more technical so we will need more technical employees. Even your non technical employees will need to understand your more technical products. As an example, a sales manager, account manager or anyone speaking to customers or prospects will need to understand the function and capabilities of your new products.

Another trend that adds to this need is new technologies are being developed at an exponentially quicker pace, so keeping your employees trained and up to date with these changes will be more difficult. The percentage of students graduating with technical degrees compared to non-technical are decreasing as the need in the market place is increasing. One thing that helps this situation is the new graduates are becoming much more computer literate as a result of the ever increasing use of small computing and communicating devices.

 

Where Are The Traditional Menu Board Companies?

I remember when I was studying for my masters degree in marketing one of the professors told me something that I thought was profound and I will never forget. He said you have to always know exactly what you are providing your customers. One of the examples he used was Wells Fargo, the stage coach company. He said if Wells Fargo really understood they were selling the service of delivering mail and passengers instead of a stage coach service they may still be in business. They would have provided their service with trains and planes as the delivery vehicles, or technology, changed.

Can we use that same example to understand what is happening in the menu board industry? What service do they provide? They provide the quick serve restaurants with a product to display what they have to sell. If a new technology is developed that will display these products better shouldn’t they switch to the new technology? That means if all the current menu board manufacturers think the industry will eventually switch to digital menu boards they should start making the switch. However, that’s not what I see happening in the industry. Currently most of the digital menu boards are sold by companies outside the menu board industry. What’s happening to the traditional menu board manufacturers?

In one of my earlier blogs I stated that end users should not necessarily purchase digital menu boards from traditional menu board companies. That may be like purchasing an e-mail service from the Post Office. However, I’m seeing completely new companies starting from scratch and selling digital menu boards. Although the IT or AV companies may have a better knowledge of the digital signage products, the traditional menu board manufacturers have a lot of advantages that are very important. They already have a relationship with the restaurant chains and they should understand their needs and how to work with them. Plus, they have a much better understanding of how menu boards are used. Are the traditional menu board manufacturers going to end up like the Wells Fargo stage coach company?