Where the Next ticketing system is going, uh, next | Bleader

Friday, June 6, 2014

Where the Next ticketing system is going, uh, next

Posted By on 06.06.14 at 01:35 PM

After reading Nick Kokonas's fascinating 6,000-word manifesto-slash-case study for the ticketing system he devised for Next and Alinea, the reason you'd want to do something, anything, to do shake up the existing order becomes clear. As he says, "Three full-time employees answering phones, mostly to say 'no' to potential customers since 70 percent of people request the same times: Friday and Saturday prime times. This was costly payroll, costly phone lines, and, most importantly, frustrating to the callers. Saying 'no' to a potential customer is never a good thing."

Paying three people just to answer the phones is costly enough, but when the vast majority of the job consists of servicing those from whom you will not be taking money, that's the kind of thing that could drive you nuts. Even moreso than the other reason often given, which is that it would allow the restaurants to control the cost of their often pricy ingredients; just having to spend so much money on those you are turning away would have to seem wasteful.

It also points to the question no one can answer yet: How many restaurants have problems close enough to Alinea's and Next's very fortunate problems of high demand and quality so particular that ingredients have insanely short shelf lives? (Most restaurants have ways to manage ingredients to give them a longer lifespan—yesterday's crudo becomes tomorrow's fried fish. That's harder with a tasting menu, on which every ingredient has a set place.)

The ticketing system, which promises a major new version upgrade soon, is far from perfect at the user end. I have to admit that I've been to Next multiple times, and not once through the system, which I found clunky and also hopeless back when tickets sold out in nanoseconds. Instead I relied on social engineering—that is, I whined enough that I cadged three invites from friends who had bought tickets, and bought my seat at their table from them; and once, I photographed opening night and got to sample enough of the menu that I could say I'd had it. From the outside, the Next system just is not as slick or user-friendly as existing services like Open Table—at least not yet. (One of those friends, who actually has used the system to completion, has his own thoughts about its limitations.)

Nevertheless, for his and Grant Achatz's restaurants, the data Kokonas shares shows that the system has been a smashing success. First up is a chart showing how ticketing reduced no-shows for reservations. No, not reduced, decimated, from over 100 in March 2012 (preticketing) to barely 20 in March 2013 (post-ticketing). This is a big problem for fine-dining restaurants, where people planning business meetings will make two or three reservations for the same night to give their bosses a choice of the city's best. The traditional method for high-end dining has been to take a credit card to guarantee the reservation—and then not to charge it anyway. As the GM of another top restaurant admitted to me, you just can't do that and risk making so many future customers mad. The ultra-high-end dining universe is too small.

That was the first great innovation of the Next/Alinea ticketing system—just changing the terminology and thus the mindset. "Reservations" are something you slip and slide around, but "tickets" are etched in stone. You can't call up the Eagles or The Book of Mormon and say, I had a big lunch, how about I move back my tickets for the show to next Wednesday? You buy a ticket, you're going that night. We all understand that.

Or at least we understood it for Next, the hottest ticket in the universe, and Alinea, which wasn't far behind, back when all this started with Next's opening in early 2011. It took people wanting something badly enough for them to accept this method of getting a spot. Kokonas makes a case that it is beneficial to diners in other ways. It eliminates the dance of reservations being held through services like Open Table for callers (as he notes, many restaurants don't give Open Table their prime time tables because why should they pay a commission on what they know they'll book anyway).

He also says it creates the opportunity for flexible pricing, though Next's pricing started out quite variable and has grown more standardized over time. They could have played with pricing to ensure full houses for Next Steakhouse, but Kokonas has said elsewhere that their costs were too high to allow much of that. So the ability be flexible in pricing requires having the capacity to be flexible to begin with; if you really want to see someone experimenting with that, look to Iliana Regan of Elizabeth, which uses the Next system. She'll put an entire day at a steep discount, just to fill the house and, presumably, to get some people in who wouldn't be willing to experiment with her style of dining at full price. If they like it and talk it up, then the experiment turns out to have been smart marketing and PR.

So will it work for other kinds of restaurants? He acknowledges that that is the big question, which is why they experimented with a somewhat different model for the Aviary, the avant-garde cocktail lounge next to Next. Here your ticket guaranteed you a spot, and basically gave you a credit toward drinks and food (which you'd likely exceed). But half the room remained for walk-ins. Here the method democratized the old practice of slipping the maitre d' a $20 to jump the line; you bought the right to walk in like a VIP, but in the end, assuming you were going to spend that anyway (which you were), it didn't cost any more than the evening would have. (That's not quite true—Kokonas notes that the restaurant benefited because it increased average check sizes—but it up-sold subtly while maintaining or even increasing customer satisfaction, which is the golden goose for the business.)

In some ways this was the most innovative use to date of the ticketing system—as he observes, "People commit to spending at least $20, $35, or $50 but they get that at the same price as any other customer. They are committing to showing up . . . but not paying a premium for access." That's giving the customer something perceived as having value, essentially for nothing (as long as they actually show up) while making the restaurant more money in the end.

And that's why, although I question how many restaurants it will ever really work for, I think it's going to be fascinating to watch as it rolls out. The Next/Alinea model doesn't have to be the only model for ticketing—indeed, it already isn't. The mechanics of the ticketing system can support a lot of different ways of offering seats to customers, and as people who are innovative with cuisine start to innovate with the possibilities that tickets offer, we're going to see a lot of different models emerge. This is one time when Kokonas should hope that an innovation from Alinea is surpassed by those who borrow it.

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