Rewards Network CEO Focuses On Filling Empty Seats at ‘Neighborhood Gems’

Delivery services saved restaurants during the pandemic, and it’s a habit that has proven its staying power as seen in the continued success of Instacart, Door Dash, Uber Eats and a host of local options. “But what people really want,” Rewards Network CEO Ed Eger told Karen Webster, “and what the restaurant really wants, is the full experience.”

That’s the in-person meal, of course, where gathering with friends and family — enjoying a consistently high-quality interaction — keeps everyone coming back for more.

“People want to go and eat,” said Eger, adding, “They want to spend time with their friends and family and they want to do it in a differentiated place.” The difference, he said, lies with the waitstaff that’s especially attentive, the chef that comes out to say hello, the family that perfected their recipes in the kitchens for decades.

There are benefits for the restaurant here, as repeat business means better revenue momentum, and increased control over the entire experience. Control that is lost when they are reliant upon a delivery service. An additional benefit is that “They can also capture higher margins,” said Eger. In-person diners, he said, are more inclined to order dessert, drinks and sides.

The best-performing restaurants, said Eger, deliver “consistency across the board. It’s the consistency of service and the consistency of experience. It’s a consistency of the food.” It’s the consistency of every aspect of a diner’s experience from when they walk in the door to their dessert. Consumers are seeking that differentiated and consistent in-person experience, he said, and they are willing to pay for it and return for it repeatedly.

High Fixed Costs

The pressures inherent in running a restaurant are high, he said. Hiring has picked up, but so have wages. Bringing staff up to speed and keeping them in place is a challenge. Food costs, of course, also have increased. “These costs have all hit the restaurants hard,” said Eger. Fixed costs, in fact, account for 70% of the costs of keeping the lights on and the restaurant in operation.

“Inflation and the supply chain,” he said, “have really affected local and independent restaurants. They are trying to make sure they continue to bring in those incremental diners — rewarding them with great food and, in any way, shape, or form that they can, to keep them coming back, and bringing their friends in too.”

Get the value proposition right and the tiny Greek restaurant on the corner, or the marquee go-to spot in the heart of the city — namely, the independent establishment — enjoys robust foot traffic.

The increased traffic, and the elimination of an empty table, means that restaurants don’t have to increase their prices to cover fixed costs. As restaurants have struggled with increasing prices, they have turned to various other methods to recoup their margins, including surcharges or suggested tips, many of which have turned off diners.

Though the overarching trend within payments is moving steadily away from cash — and by extension, to cards and digital wallets — restaurants are still in the midst of experimenting with different business models.

To help keep customers coming through the doors, said Eger, and to provide a benefit for their loyalty — even in an economic environment where money is tight and inflation high — Rewards Networks’ diners earn points or cash back that can be redeemed across a host of firms’ loyalty programs (Rakuten and T-Mobile among them).

Filling the incremental seat, said Eger, translates into a highly profitable additional meal. And all restaurants, he said, are focused on filling those empty tables and chairs. In fact, he said, Rewards Network helps participating restaurants boost their seating by 5% to 10%. Beyond increasing a restaurant’s capacity, an additional benefit of loyalty, said Eger, is that the restaurant takes good care of its clientele.

As he said, “We’re the connector,” between the restaurants, consumers and rewards, “and that’s what I love about the company.” The network, he said, rewards diners based on their individual behaviors — where dining to earn retail points or stopping into the coffee shop to earn points over time creates a local ecosystem that’s marked by variety.

The platform is extensible across use cases, he said. “You tell me what currency you want,” said Eger. “You want air miles, we do air miles; you want hotel points, I can give you hotel points.” Whatever reward the customer craves is what the restaurant wants that customer to earn, he said.

“And we want you to earn, because this engages you back into the restaurant ecosystem,” he told Webster, adding that the in-person restaurant experience in unlike any other as it fulfills a “human desire because of the connection you make with people when you’re out dining together.”