Restaurant customers have always been powerful and the internet only further stacks the deck in their favor.

With 970,000 restaurants across the U.S., customers have always enjoyed a variety of meal-time options. Pre-internet, however, it was much harder to find reliable, new restaurants, so customers likely allocated most of their 150 annual dining-out experiences to familiar places.

The internet significantly widened the potential pool of restaurants to choose from, increasing the power of consumers to choose based on proximity, promotions, reviews, etc. With 89% of consumers going online to search for nearby restaurants, and crowd-sourced recommendation sites like Yelp and Urbanspoon impacting consumers’ decisions, any single-unit restaurant with a nonexistent marketing budget can amass a following. Large-scale restaurateurs need to decide how they want to compete in an increasingly level playing field.

To app or not to app?

Initially, as customers moved online, the question was whether to differentiate by building a website, and then more recently as customers moved into mobile, a mobile optimized website. Now, with 16% of restaurants already offering their own app, and the Yelp-like apps of the world influencing most meal-time decisions, the question becomes: should more restaurants fight back with an app of their own?

The answer, of course, is yes. If a restaurant can offer features like a restaurant locator, access to its menu, ability to store and accrue loyalty points, and/or online ordering services, it can use its app to compete for consumers.

Once a restaurant offers its own app, it can immediately begin to distinguish itself from other dining options, as it now has a controlled environment to communicate directly with its loyal customers. Mining the app’s data affords new opportunities for segmentation and performance tracking.

My restaurant has an app, now what?!?

Once the app exists, there’s still a lot of work to do. First, customers must be motivated to download the app. Then, customers need a reason to continuously engage with the app. And ultimately, it’s any marketer’s dream to be able to assign the app an ROI.

Ways to motivate app downloads:

• Actively market the app in each location: Restaurants with their own app differentiate themselves from other less tech savvy dining options.
• Drive downloads with a promotion: This was a successful strategy for Denny’s and Squeeze In. Customers who downloaded their app were entered in a contest or received a small token of appreciation (in Squeeze In’s case: free toppings).

Ways to continuously engage your loyal customers and drive repeat business:

• Offer relevant content: Include location information, promotions, and menu options.
• Push location-based content to customers: This content could include happy hour specials, messages about new menu items or loyalty program status updates. Some location-based messaging technologies do not even require the app to be open, so these messages also drive reengagement with the app.
• Generate a new level of analytics on customer foot-traffic: It’s now possible to passively track each time a mobile phone with the app installed enters the restaurant. It’s like being able to track web-style analytics on real-world locations.

Ultimately, how well the app drives customers and increases sales will determine its success. And as argued above, it’s not hard to imagine using an app to offer relevant and timely communication and send targeted location-based messaging in order to influence customers to choose a specific restaurant a few extra times a year. Each incremental visit times an ever increasing base of app users translates into a powerful weapon to distance one restaurant from the rest of the industry.