We have had both of those questions in the forefront of our minds for many months now, and the answers we’ve generated have been similar to Mark’s. Certainly, he answers the original question succinctly, explaining to guests that the feature they think is most central to OpenTable’s appeal (the convenience and ease of online reservations), can be achieved in many ways; but more importantly, he says something truly resonant about OpenTable becoming a middleman between diner and restaurant as the social price of that convenience. This latter piece is where we find the most traction for ourselves.
Perhaps the high cost of doing business with OpenTable merely reflects a harsh reality for which restaurateurs have no one to blame but themselves: the truth that by permitting a third party to own and control access to the customer database, restaurants have unwittingly paid while giving away one of the crown jewels of their business, their customers.
What makes OpenTable a successful business is precisely what makes it hard for us, as restaurateurs, to buy into: it offers one-stop shopping that focuses on the relationship between the diner and the middleman, rather than the relationship between the diner and the restaurant. Everything we do relies on our guests being willing to trust us, and we try to build that trust not only by providing the best experience we can, which starts long before the guest arrives for dinner. More often than not, this approach to our customer relationships means removing the usual intermediaries – journalists, advertising agencies, public relations professionals, and certainly OpenTable.
The other thing about being a small restaurant, which Mark also acknowledges, is that our profit margin is slim. The cost of OpenTable for a place as small as we are isn’t just high, it’s unapproachable. OpenTable’s model is antagonistic to the way we’ve managed ourselves so far — by trying to join the community around Somerville and Cambridge, by trying to participate in the social media that our customers use daily, by trying to be as creative and thoughtful with our offerings as we can — because it doesn’t allow for the same diversity of approach that we’ve used elsewhere. The cost would force us to divert all our resources in a single direction.
The beauty of the Web is that we can have a complete website with a reservation widget, as well as a presence in many places including local services — UrbanSpoon, Yelp, CitySearch, etc. — that provide the intangibles of OpenTable, like reviews, price points, sample menus, and contact information, for free. Rather than pay for OpenTable, TV commercials, or newspaper ads, we can invest in taking note of the feedback we find all over the Web, and we can promote ourselves in ways that we think reach the people most interested in what we have to offer, and we can do all of that without relying on the captive audiences of a specific channel’s news show or OpenTable’s prime customers.
We live in the Golden Age of Google, in which Web-based services have transformed many consumer and business functions by making them easier, more accessible, and drastically less expensive. Thatâ€™s ultimately the most perplexing thing about OpenTable: unlike so many other Web services, this one has actually driven up operating costs, not reduced them.
We regret that OpenTable has the costs it does, because Mark is right: it is a brilliantly conceived and executed service, and it has a lion’s share of the good restaurants in the country with whom we’d love to be associated. All in all, we’d rather hear your voice on the phone, or know that you were able to make a reservation after reading our website, than know that an anonymous person can find a free table at our restaurant in between the free tables at 20 other local restaurants. We don’t see ourselves as sitting in between 20 other local restaurants, we see ourselves sitting in a community. And we like it that way.