Do Restaurants Blacklist Low-Spending Customers?

I’ve been reading and enjoying Super Crunchers, the new book by Ian Ayres that we excerpted earlier on the blog. One section of the book deals with the data that firms gather on their customers, and how the firms can use that data to address customer habits:

Hertz, after analyzing terabytes of sales data, knows a lot more than you do about how much gas you’re likely to leave in the tank if you prepay for the gas. … Best Buy knows the probability that you will make a claim on an extended warranty.

This made me wonder further about a situation I’ve wondered about in the past: do restaurants ever blacklist their low-spending customers?

Let’s say you call to make a reservation at a fairly high-end restaurant. It can’t be that hard for the reservation agent to access the data on your past visits. Imagine that the last few times you went to this restaurant, you and your spouse ordered salads, split an entrée, had no cocktails, drank tap water instead of Panna or wine (click here for a discussion of wine markups), and had coffee with no dessert. And, for added effect, let’s say that you lingered for a while over your coffee, tying up the table for a potentially more profitable customer. Maybe you even registered a fairly serious complaint about your meal, as I once did.

What does the data-savvy restaurateur do with customers like these?

Perhaps someone out there in the business can answer the question: do restaurants turn down reservations for customers who have proven themselves to spend too little money? Perhaps it never happens (but I wouldn’t be surprised if it does); perhaps restaurants don’t have fingertip access to past-spending data (but I would be disappointed if they don’t).

If restaurants do engage in this practice, they certainly wouldn’t want to make it publicly known … or would they? If they did, word might get around that if you don’t order a bottle or two of wine, then you don’t get a table next time you call. Which might be the kind of strategy that makes a cold-hearted profit maximizer’s heart sing.


VolArb

I know of a couple of restaurants in Manhattan that do keep track of customers' data. One in particular owns about a dozen restaurants throughout the city and they keep track of data by phone number.

They will keep track of dollars spent, size of tip, frequency of visits, length of visit, etc. Using this data they rank customers from 1 to 5 (1 being the best) at each of their restaurants. Being an R1 means that you are a priority customer at restaurant 'R'. They have another category called "MS" which stands for "must seat". So even if the restaurant is completely booked, the host will find a place for you. I have had had friends use my phone number to make a reservation at some of their restaurants because I had a high ranking at a few of them and my friends knew they could get a reservation with my phone number. This helps me because it maintains my dollars spent and frequency of visits in their system as well as my ranking.

For top ranked customers they will also send a note to the kitchen so that the kitchen is sure to take extra care of this particular customer.

A friend who was a hostess at one of these restaurants was well aware that some of the customers knew of their ranking because they would come in without reservations and demand to be seated due to their high rankings.

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Bill

Not blacklisted, but it's easy to do with opentable. At the high-end steakhouse where i worked, the customer notes field had a $ to indicate a high-spender, and servers would enter what kind of wine, etc, they ordered.

When I subbed in as a host, I would flat out refuse to take reservations for two-tops (even though we had availability) on a friday or saturday because i knew we would get walk-in four-tops that would otherwise be turned away. i think the discrimination is based on table volume, not the check.

What's the most expensive piece of equipment in a restaurant? An empty chair.

Jared O.

I order from a great hole-in-the-wall pizzeria down here in South Florida and they ask for your *phone number* first, and if you're a returning customer they know your name. This makes your actual name or pseudonym irrelevant. I'm betting fancier restaurants use a phone number as the root data and build other info around it. There's an unlimited number of names; there are only a few phone numbers per person.

reassembler

This post is interesting but the comments are maybe even moreso.

There are (at least) two different things being talked about here. One is standard yield management scenarios; e.g., airlines change ticket prices gradually as the flight gets closer; the whole aim is to get the best total $$$ amount for the whole plane.

That's very different from remembering the orders of specific customers and treating them accordingly. Big companies (casinos and their affiliated restaurants) try to computerize this approach, and smaller companies (mom & pop shops using OpenTable) just practice it informally based on employees' memory. At that level it's just human nature but the institutional version somehow takes on a sinister feel...

Exdoorhore

As an hostess that used OpenTable, I can tell ya that we DID track big spenders. We flagged them and they almost always got the benefit of getting a res anytime they wanted, perhaps to the detriment of other customers... We only negatively flagged people 86'd due to bad drunken behavior, not cheapness... But, since we were a neighborhood restaurant in san francisco, we all knew the regulars who were cheap, complainers, etc...

Lord

The staff routinely do this, and did so before there were computers, but it generally affects quality of service and particularly seating location.

BitterOldPunk

I've worked as a headwaiter, maitre'd, bartender, and house manager. It's my experience that good customers get better tables quicker, unknown customers get average tables, and "problem tables" get the tiny booth by the kitchen door. This is never "policy", and often the chef and/or owners don't even know it's happening. There is a secondary information network that flows between the servers and the hosts that determine seating, and if you spend and tip well, I'll ask Mr. and Mrs. Cheapskate if they'd prefer to linger over coffee in the bar so I can get that table ready for someone who's going to take care of their server.

Seth

I'm not sure if restaurants black list bad customers, but i know that at least some use this type of data to reward good ones.

When I lived in Massachusetts, I used to frequent celebrity chef Ming Tsai's restaurant Blue Ginger. I would generally go as part of a party of at least six, everyone would order apetizers, plenty of wine would flow, at least a few desrts would be ordered and some nice port or other after dinner drinks would often round out the meal. After my very first visit -- one at which we had tipped fairly generously, as well (I and many of my friends are ex waiters/bartenders)-- I noticed that we always received an round of amuses-bouche and that Ming would personally visit our table if he was in the restaurant. Other diners at nearby tables would not seem to receive the same treatment and I have to assume it had something to do with an efficient system of tracking diners spending habits.

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Robert R.

I recently spent some time in Italy, and aside form learning about the benefits of Government paid health care, I had the pleasure of enjoying many fine restaurants, of which there isno shortage in Italy. Never duringmy stay did I experience a sense that the restaurant wasinterested in "turning over" my table. In fact quite to the contrary, I had the sense that the table was mine to linger over wine and coffee as I saw fit, and enjoy myself to the maximum. I believe this attitude is good for business in Italy, and that we might learn something from them. The hurried pace of life hear is causing us to loose some of the more pleasant aspects of life. Slow down, and enjoy the present. If I am not mistaken, there are statistics to demonstrate that a slower pace doesnot actually limit GDP on either a per capita or gross basis.

marc-paul lee

i was amused with our waiter at a seafood restaurant. after we placed orders for cocktails and appetizers we idly wondered where our bread was. he candidly told us that they now wait to serve bread because if they served bread earlier diners were less likely to order appetizers. coincidentally i happend to be in the middle of reading 'super crunchers.' dinner, service and the insight into the dining industry were all excellent so i left a larger tip.

Sandi B

We had an indicent at Tru restuarnt in Chicgo. The prima donna we were dining with pitched a "hissie fit" because the restaurant had run out of Amaretto!! She was so uncomprimising that when they found some (my husband told the manager to do whatever he could to get some) she said it "wasn't her brand". I was embarassed and annoyed as it ruined our evening.
The next time I called for reservations, I asked if they would please remove the black mark next to my name!!! Since they had my phone number in their system, I assumed they could have placed a note next to it so say remind them of the bad behavior at our table. I also use opentable........and there is no reason that they could not make use of technology.
I think it is more likely that behavior that is difficult for the staff is noted rather than the money spent!! If you have a bunch of drunks who spend lavishly but annoy the other guests, that is more difficult for a restuarant than cheapskates.

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AndreaZak

At my last job, the VP used to have his assistant places reservations under his "code name." In the event her ever canceled at the last minute or was a no show, he didn't want to wind up blacklisted from the A-list restaurants he took clients to. He advised everyone to NEVER put a reservation under our real names, just to cover ourselves.

Kate

As a waitress at a mid-scale restaurant, we do not keep track of spending habits as we do not take reservations, but I personally keep track of customers. I've been working brunch for about a year, waiting for almost 3, and living in my current city for 3 years as well. I know my regular customers and I know how to stereotype pretty well the non-regulars and tourists that come in. I don't always do it intentionally, but when I am busy tables that have been good to me in the past or that I think will tip me well are the ones that I devote my time to. The other employees and myself even tip each other off to good and bad customers when they sit in your section-- nothing to do with accepting reservations, but a behavior that many waiters and waitresses can admit happens in their own service.

gabe

One of my mom's friends used to own an organic produce business that supplied restaurants in California. Nobody got better service than her friend - who would also routinely spend 2-3 times as much at a meal as I would. But nobody knew that when she walked in the door...She always had to ask the waitstaff to talk to the owner or the chef, who would then come out and offer a tasting menu or a pile of free food.

Stuart

Re: #29

Being in England and dining out regularly, I can only comment on passing on American serving habits, but one thing that I have found in the past is the turnover of tables is much different between Europe and the US. In most sit-down restaurants (i.e. not McD's, Burger King, etc.) they base there prices partly on the turnover they can expect for each table. In Europe, that can be as low as 1 party per table per night, in the US my experience has been 2 or 3 for the same level of restaurant.

This is due to the differing dinning experiences, in Europe dinner is usually considered the main event of the evening, in the US it's the start before going onto something else. Just my observations and experience :-)

Richard

It's normal to just give a surname when booking (unless you think that your full name will get you some sort of preferential treatment), so restaurants can't track their customers anyway.

Martin

Does anyone just turn up to a restaurant on the night and pay in cash these days?

Gina Coggio

I've been a server for years and worked in everything from a college dive bar to an upscale restaurant. In the classier places I've worked, the pressure is on to be the best server you can be and to try to get sales up. We would learn the eating and spending habits of return customers but that happened so infrequently that it was almost useless to try to remember the specifics. We were concerned with making money both for the restaurant and for ourselves, and while it was nice to have a big spending table because our tip would likely be higher, most people ate and spent modestly.
You'll mostly be remembered for stiffing a server on the tip. The expected tip is 20% in the finer restaurants and if you leave less than that, like many older people do (namely my own parents after which I always return to the server and leave more), it's frustrating for servers. Do it once, fine. Do it twice, that sucks. Do it three times, and your service is going to suffer.
As far as tracking customers through computers, no one's willing to put in that much energy. The restaurant business is stressful enough as it is. Instead of blocking customers, it's much better just to improve service. So you'll get a cheap table here and there, but that's nothing to get all fussy about.
The jerk tables are the worst--the people who don't acknowledge servers as humans; these customers are bossy, self-righteous, and demanding. Customers who are rude to servers and workers are the ones who are likely not to be served again.

ginacoggio.wordpress.com

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gina

#29:
I think dining in different countries is a completely different experience from dining in the US. I live in Brazil and it's very much along the lines of what you're talking about in Italy. The table's yours for as long as you want it and you have to ask for the check when you're ready to go. There's no rush or hurry and it's wonderful.

Linda Loomis

Funny, the San Antonio Food Bank doesn't seem to have that problem:

http://www.mysanantonio.com/news/columnists/cguerra/stories/MYSA090107.01B.GuerraPoverty.33647cd.html

As Labor Day approached, the Center for Public Policy Priorities released "What It Really Takes To Get By In Texas," a detailed analysis on how widespread poverty is in our state, where millions of us don't live in huge mansions, own oil wells or trot around on show horses. ...

When it was concocted, the FPL [federal poverty level] assumed that poor people spent one third of the absolute minimum income they needed on food. Now, 48 years later, we still define poverty as three times the absolute minimum needed to keep from starving, without even accounting for regional differences or other costs.

Since the 1960s, food has become slightly less expensive when adjusted for inflation, Deviney says. But this decline has not come close to offsetting increases in other expenses — such as housing, health care, utilities and transportation — that are now larger shares of everyone's bare essentials.

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