Tag Archives: transactions

DotMenu CEO Frank Blot: Converting College Diners into Lifetime Customers

Acquiring customers at an early age and getting them to use your services or products through their various life stages has been an appealing strategy for everything from autos to cigarettes to newspapers. Can it apply to online food ordering when it starts from a college dorm?

DotMenu Inc. CEO Frank Blot thinks it can. I met with Blot, President and founder Michael Saunders and CMO Tony Wills in their office in New York this week. Blot says that by offering enhanced features for restaurants and users alike, their original service, campusfoods.com, can become “a springboard into local” via a second site, allmenus.com, where everyone from busy families to shut-ins utilize the service. “A large group in a retirement community ordered $700 of food last week,” says Blot.

By offering convenience, value and selection, and adding new functionality, such as mobile apps, neighborhood data (from Zillow’s API) and social games on Facebook (Food Friendzy),Blot thinks he’s got consumers covered.

For restaurants, the sites are offering a wide range of services, including landing pages, search engine optimization (including a direct relationship with Google) and especially, bill processing. More than 2,500 restaurants are currently participating, processing more than three million orders a year.

The 12 year old company also offers coupons, typically handing out 1,000 free coupons on quality paper to restaurants when they sign up. We tie them specifically to loyalty and they’re time sensitive,” says Blot. He notes that they’re much more effective than point, or frequent diner programs, which can be used everywhere (and are sometimes not used anywhere).

Blot adds that some of the company’s restaurant customers make the mistake of thinking of the company as just a technology company. In fact, it is a business partner that drives orders.

“Some (restaurants) have implemented their own ordering technology and immediately see that the orders they were receiving through our program stop,” says Blot. “These orders are actually redistributed to our other restaurant partners in our virtual food court. Within days these restaurants are asking to be placed back within the virtual food court with a clear understanding of the value we deliver to our partners.”

Restaurant owners under 35 really get it, adds Blot. The challenge is to sell across every age group.

As for the transaction-based business model, it has proved to be the best approach since the company doesn’t need to ask for money upfront, a la OpenTable, the upscale restaurant reservations service. But it isn’t always easy convincing restaurant owners to give the company its required piece of the online order – typically around 4 percent. Two thirds of the company’s revenue comes from transactions, and 1/3 comes from advertising.

“Four percent of $100,000 is $4,000,” he notes. That’s not bad for all the extra business the company delivers to them, and “much cheaper” and better than building their own ordering system and advertising.

Blot also notes that while the economy has been difficult for restaurants, his company’s business has been steadily growing as it adds more and more markets and increases its local penetration. “We’re taking a formula for local and replicating it,” he says. At the same time, the restaurant business isn’t always an easy one to work with. “It’s a complex-simple business.”

Dulski’s New Thing: Events and Plans Front and Center’d

Is there room for a new, locally-oriented social network if it is more practical than Facebook, MySpace, Bebo, LinkedIn et al? That’s what Norwest Partners and Keynote Ventures are betting $6.5 million on with the launch this week of Center’d, formerly known as FatDoor.

The service is headed up by former Yahoo! Marketplaces head Jennifer Dulski and former Microsoft Virtual Earth exec Chandu Thota (hence a mapping orientation). Former Intuit president Bill Harris sits on the board.

Currently in soft launch, or “first draft,” the service is sort of women focused and bent on helping friends get together locally. “People, Places and Plans,” is the tag. Historically speaking, its first iteration, FatDoor, is now considered a false start. It had most of the money, and some hot tech, but no plan.

As currently conceived, Center’d allows friends to get things done that they’d normally do via their email lists and round robin calling. Friends can pick a place, pick a time, pick service providers, send invites, host and communicate.

For instance, Friends can form unique groups (i.e. “Theater Group”), plug in variable information (i.e. “Oh! Calcutta”), and even figure out who brings what to a pre-show tailgate party, or share baby sitters. Birthday parties, road trips, and concerts are other types of possible events that might be aided by the site.

The site goes quite a bit beyond its initial concept of “Location Date,” and it goes beyond Evite too. Beyond events and plans, friends can also use the service to stake out future events, as listings of local events are crawled from the Web ala Zvents or Eventful. More importantly, users can tag and review “shared places” that they like.

Center’d also has very nice mapping integrated so one may zoom in-or-out of specific areas with real ease, with various categories highlighted. Yelp reviews have also been brought in. The site may also integrate with Fandango, ServiceMagic and Matchpoint. There is a lot going on with this site.

Eventually, the site is also planning to integrate payment processing, which would be at least one revenue generator in addition to Google AdSense. Payment processing would make it easier to plan events and more importantly, not stick one person with the bill for 27 tickets, which Dulski says is the size of a typical social group.

“Getting people to the site isn’t enough,” says Dulski. That’s the ultimate shortcoming of all the local search sites, she feels.

While there may be Facebook fatigue among the digerati, social networks really haven’t hit their stride among ordinary folk, insists Dulski. “People aren’t using other tools very actively,” she says. In fact, the site is exhibiting this weekend at the National PTA meeting in San Diego. Similar non-digerati events will be targeted during the launch phase and beyond.

She also notes that while Center’d has been created as a unique platform onto itself, aps are also being created for Facebook and Open Social.

What to make of all this? The site is well executed, if overly busy. It appears to be an outstanding laboratory for social aps. But really, is it more than a Facebook ap? I guess the idea is that events and plans will be the new driver, in much the same way that news and mail drove traffic in the Web’s first iterations. Ultimately, there are hopes that enough people can be aggregated to branch out more widely to other aps, and allow the site to be supported by ads and more intriguingly, by transactions.

It would be fine with me if it all worked out. I hope it does. But every city guide that ever launched thought that plans and events would be core features for them. Ultimately, what you had was a bunch of overworked Yahoo! and Microsoft workers who knew that they worked around the clock, but imagined that a lot of people go out all the time.

Do I relate to it personally? My own primary friends group has 12 people in it. We get things started on email. When things get serious, we hit the phones. Last Christmas, we finally hit on a Web-based tool that helps us with an important task: sharing our good times.

But you know what? It isn’t a social network. It is a photo sharing site called Shutterfly. It will be a wake up call to me if an extended planning site is what ultimately gets people center’d.