SeatMe offers restaurants a flat-fee alternative to OpenTable, and the company’s recent acquisition by Yelp brings a powerful ally to its business goal of becoming a major player in the reservation-booking business. For many years, OpenTable has dominated the industry with its Electronic Reservation Book system that drives revenue by deducting commissions on the total sales that each reservation generates. SeatMe, however, charges a flat-rate monthly fee for making reservations, which could save restaurateurs hundreds or thousands of dollars each month.
Many restaurant owners worry about burdensome per-reservation commissions, and this isn’t the only important consideration when choosing a reservation system. OpenTable has a huge advantage in its long lead in building its database of consumers, so restaurant owners need to consider whether any system reaches its targeted audience of local customers. SeatMe has the chops to reach local diners because of its acquisition by Yelp, the industry-leading consumer-review site. Restaurants get a predictable, low monthly fee while gaining the marketing support of Yelp’s vast database, well-regarded phone apps for consumers and other marketing resources that major companies can provide.
You get everything you need to reach your targeted customers and start accepting online reservations from any computing device without investing in hardware or software. No long-term contract is required, and it only takes a few minutes to train your staff to use the system.
SeatMe Background and Profile
SeatMe transitioned from a startup company to a major force in restaurant marketing in just two years. The company’s decision to offer reservation bookings for a flat fee instead of taking a commission percentage of every sale attracted immediate notice from the hospitality industry. Yelp, which had been looking for new services to monetize its third-party, unsolicited review site, acquired SeatMe in 2013 to challenge OpenTable’s hold on the reservations market and challenge Google’s likely plans to enter the reservation market
Yelp is also testing restaurant delivery services, so SeatMe could eventually take reservations and delivery orders for dinners, lunches and catering business. SeatMe’s future, of course, is now tied to Yelp’s business prospects, which have been disappointing lately due to three consecutive years of not making a profit before posting modest gains in 2014.
Many business analysts predict that Yelp is ripe for a friendly or hostile takeover in late 2015 or 2016.
How SeatMe Works
SeatMe service allows restaurants to take reservations on their websites and Yelp business pages for a low monthly fee. Unlike other reservations systems, you don’t pay a cover or commission for each reservation that’s booked through the system. You don’t need unwieldy hardware because you can manage everything from your own devices by accessing SeatMe from anywhere in the world.
SeatMe also delivers front-end management tools that help to manage reservations from other sources, walk-ins and in-house seating configurations. Restaurants get shorter wait times, faster table turnovers, maximum seat capacities and fewer no-shows because SeatMe offers the following advantages that mitigate the risks of no-shows and short-notice cancellations:
SeatMe’s wait-list management tools mean that you can slightly overbook on busy nights to compensate for no-shows. You can integrate your walk-in guests and text them when their tables are ready.
Confirming reservations by text reaches most people instantly on their phones, reducing no-shows and last-minute cancellations.
Market to Your Guests
Unlike reservation systems that keep their contact lists proprietary, SeatMe shares its guest intelligence. The company’s software actually tracks guest preferences, dining habits, special occasions like birthdays and other important marketing information. You can treat every customer like a VIP.
SeatMe’s Suite of Features
SeatMe provides a range of intuitive and appealing features that restaurateurs appreciate. SeatMe’s guestbooks track customer preferences, schedules and other actionable intelligence that help restaurateurs deliver more personalized service. You can export this guest intelligence to other marketing databases. Some of the company’s best features include:
- Ability to confirm existing reservations through text messages, which reduces no-shows
- Tracking guest details like allergies, seating preferences. dietary restrictions and special occasions
- Exporting information to in-house and third-party marketing resources
- Generating automatic wait lists
- Notifying guests when tables are ready
- Providing access to Yelp’s advanced consumer-facing apps
Effectiveness of Using SeatMe
Backed by Yelp’s powerful reputation, vast database of users and financial resources, SeatMe is well-positioned to challenge industry leader OpenTable and its domination of the reservation industry. SeatMe customers can advertise with Yelp and drive even more traffic to their business pages and organic Yelp search referrals, essentially dominating local restaurant marketing more effectively than OpenTable.
In fact, Yelp’s acquisition of SeatMe ranks as a brilliant strategic move because SeatMe gains the resources to challenge OpenTable’s market dominance while OpenTable gets a well-financed competitor and loses some of the reservation income that it received by taking reservations from Yelp’s customers in the business arrangement that Yelp and OpenTable shared before the SeatMe acquisition.
SeatMe provides intuitive features, low monthly costs and no draining per-reservation covers or commissions on each reservation made through the system. Using the service is very effective for both small and large restaurants. At $99 per month, SeatMe is likely to pick up restaurants from OpenTable by the thousands. In a reciprocal relationship, Yelp’s customers receive some of SeatMe’s most desirable features, such as alerting customers with confirmations (which reduces fraudulent reservations used for scalping reservations).
Restaurants can get some of SeatMe’s features free by filling out their Yelp profiles. Yelp’s technology has always been cutting-edge, so SeatMe’s customers can expect to benefit from Yelp’s technology developments, apps and upgrades of mobile marketing apps for both Android and iOS users.
SeatMe Competitors and Market Opportunities
Yelp and SeatMe are competing with market leaders Google and OpenTable. Apple wants to get in the game as well, if filing a patent for an online ordering and reservation system is any indication of its intentions. OpenTable expanded its efforts by acquiring small reservation systems like Ness, Rezbook and Quickcue. Google is always a force in any marketing program,and the company’s acquisition of the Appetas reservation system promises competition in the reservation booking wars from the world’s most popular search engine.
SeatMe’s biggest competitor might well end up being parent company Yelp. Restaurants that don’t need an extensive system can book reservations with a free website widget on their Yelp profile page and get many of SeatMe’s intuitive features without paying the company’s modest monthly fee of $99.
SeatMe, OpenTable, Google and Yelp Generate Complex Relationships
Keep your scorecards handy for a brief rundown on the complicated relationships among the major reservations companies. OpenTable makes reservations through Yelp and has had an extended partnership with the company. Yelp’s acquisition of SeatMe issues a direct challenge to OpenTable’s dominance of the market. By offering customers free profile-page widgets to take free reservations, Yelp further undercuts OpenTable’s business model.
Google tried to buy Yelp for $500 million but balked at the idea of doubling its offer to match Yahoo’s offer of $1 billion, a deal that eventually failed to materialize. Google is increasingly trying to take orders and reservations directly through its industry-leading search engine. Yelp is charging that Google favors its own clients and services in generic searches in a European lawsuit.
If you’re having trouble keeping track of the changes, lawsuits, war of perceptions, jockeying for business advantages and acquisitions of hospitality services in these internecine feuds, you’re not alone. Suffice it to say that Yelp’s acquisition of SeatMe was an intelligent decision on many levels to challenge OpenTable and Google while bringing vast resources to SeatMe and elevating the company to major status in the hospitality industry.
Cost-Benefit Analysis of Using SeatMe
Depending on your restaurant’s size, marketing goals and budget, Yelp offers alternatives for every organization through its flat-fee SeatMe service or its free in-house reservations system. If your restaurant isn’t large enough or accustomed to taking many reservations, then you probably don’t need the advanced functionality of SeatMe and can book an occasional reservation through Yelp’s free service or OpenTable.
Using SeatMe eliminates commission fees, installation costs and long-term contracts, which makes the $99 flat-rate monthly fee enormously appealing to restaurateurs. You can book reservations on the spot, send messages to guests on waiting lists for reservations when spots become available and minimize the consequences of no-shows and last-minute cancellations.
Currently, there appear to be no hidden costs to using SeatMe or Yelp’s free reservation widgets on the company’s profile pages. That’s not to say that future problems won’t occur. Keep in mind that many of these leading players in hospitality marketing are offering ancillary services like restaurant deliveries and payment processing, which could be linked to other services at some point.
The reservation wars are heating up in the food industry, along with competition for booking delivery services. Everybody wants to claim a piece of the pie, but there are only so many wedges available in one pie, and restaurateurs grow wary of committing more of their profits to marketing. SeatMe offers a reasonable monthly fee for taking reservations, which could generate much-needed changes in how marketing services bill their customers.
What We Like
We like SeatMe’s flat-rate fees, advanced apps for iOS and Android phones and features for gathering guest intelligence and exporting the information to marketing programs. You don’t have to worry about your contacts being held hostage by SeatMe’s parent company Yelp, which Yelp’s complicated history with small businesses might cause some restaurateurs to consider. The company’s front-end management tools and low monthly fee make SeatMe subscriptions desirable for even walk-in restaurants because these eateries can manage wait lists and seating and get referrals and marketing benefits from the service.
What We Don’t Like
We worry about Yelp’s critics who charge that the company extorts customers into buying advertising. So far, there are no signs of this kind of thing being involved with taking reservations, but as Yelp’s war with Google and OpenTable heats up, high-handed business practices could filter through to SeatMe’s services or Yelp could start charging commissions or higher monthly fees, which is a common practice when a company begins to dominate a market segment. There’s also concern that Yelp will be bought by one of the major Internet marketers due to recent lackluster sales in its core business service of selling advertising in its consumer review website and search engine.
SeatMe seems to offer a win for restaurateurs who face dozens of consulting and advertising services trying to take percentages of their gross sales. It’s nice to know that your monthly fee will be reasonable and predictable.