Customer service through technology

7/3/2024

When business owners want to increase profits, one of the first places they often look to is decreasing costs. One of the biggest expenses for any business is payroll. As technology advances, companies are looking for opportunities to reduce that cost. And, sometimes, it means replacing a human with technology. 

However, with the rising controversy over the use of artificial intelligence (AI), consumers are becoming increasingly skeptical of new technology. That’s why listening to customers and shifting focus may be the best route for reducing costs — even if that means changing the business model or implementing new tools.

 

Introducing ghost kitchens

Darren Warth, owner of Smokey D’s BBQ in Des Moines, is a lover of all things food. When he is not running one of his restaurants, he is traveling the country, researching and eating all kinds of food. In 2020, an opportunity presented itself to try something new. When the catering business next door to Warth’s sauce warehouse shut down, the landlord asked him if he wanted to take over the kitchen. And he did. But it sat empty for nine months until Warth got the idea of bringing locally owned and operated ghost kitchens to the metro.

Ghost kitchens, a.k.a. virtual kitchens, are a new business model in the restaurant industry. Rather than a traditional dine-in experience, ghost kitchens focus on online orders through both curbside pickups and deliveries. There is no wait staff, no tables, not even any plates. Everything is served to go.

“I started researching what the most popular food items for food delivery were,” Warth said. “Wings was the No. 1 delivery food that was the biggest shortage… Well, if you’re going to have a wing concept, we might as well have other chicken items.”

Hence, The Ornery Chicken at 121 S.E. Shurfine Drive, Suite 6 in Ankeny was hatched. Because Warth did not have to employ any front-of-house staff or purchase any dine-in equipment, he was able to focus entirely on the food. He developed a crispy chicken sandwich recipe that keeps its crunch even after sitting in a to-go container for 30 minutes. 

Warth could run the ghost kitchen on a busy commercial street but, instead, saves money on rent by operating in an industrial part of town. And, he only needs two to four people to work in his kitchen. This all means he can sell customers a chicken sandwich and fries for only $9.99. 

“You can’t go anywhere else in town and get a chicken sandwich that big and a side for under $15,” Warth said. 

“Our biggest challenge is people that are scared to order something online. It’s the older generation,” Warth said. 

It’s a double-edged sword. He could use a large marquee to advertise his restaurant from the outside, but then he runs the risk of confused customers walking in. Instead, Warth does his best to educate the public.

“You’re really just dealing with a kitchen and electronics, and we’re fully electronic,” Warth said. 

 

Using an AI Chatbot

A visit to Golden Rule Plumbing, Heating and Cooling’s website reveals a small red button on the bottom right-hand side. It reads “Chat with Us” with two chat bubbles. Is there an actual person on the other end? No. Rather, it is a new AI chatbot meant to increase efficiency. 

Golden Rule, 904 N.E. Main St., Grimes, implemented this tool less than a year ago. The bot is there to help customers schedule service appointments with the company. Meant to streamline the customer experience, there are some challenges with this new technology. 

“The theory is that AI-driven databases and chat features and bots get smarter over time,” Jesse Peters, sales and marketing director, said. “But, initially, they’re pretty dumb, which is a frustrating customer experience.”

Peters and Golden Rule opted to use a closed AI model. This means that the data and information their chatbot uses is private and only available to their company. The downside is a much slower learning process. If they had gone with an open AI model, like the popular ChatGPT, the tool would have access to a lot more data and learn much more quickly. However, their information might be used to help competitors.

Only time will tell if this investment will pay off in the end for Golden Rule. They can use information like booking rates to track its effectiveness, but humans are the ones who bring in the business.

“Is it less expensive than a person who has a personality, who has health insurance, who has all these things attached to them? Yes,” Peters said. “But the trade-off with booking rate just absolutely isn’t there yet. By the way, I teach that robot with human interactions that I get from a person.”

 

Other new technology 

A chatbot is not the only online technology tool used by Golden Rule. Another is an online appointment scheduler. Simply filling out a form on their website gets customers into their system. But even that can be a barrier to getting customers booked.

“What I’m seeing is about 60% of the people who engage with one of those online systems choose to abandon it because we have too many hurdles,” Peters said. 

Their form used to be much longer than it is now. There was even an option to upload photos of whatever issue the customer had, but nobody was doing it. So, Peters took an intentional loss of efficiency.

He adopted a mindset of asking as few questions as possible to get customers scheduled as quickly as possible. After a customer submits an online form, a human must go through each entry and follow up with the customer for more information. They’ll call and even offer an earlier appointment if available. While it may seem tedious, the call center team agreed it is a time saver. 

Another tool the company uses on the dispatching side is Buck AI. The tool helps assign technicians to the right call at the right time. Rather than sending a technician out to Ankeny and then responding to an afternoon call in Indianola, why not have the technician in West Des Moines run that call instead? 

Golden Rule has more success with tools like Buck AI because it is not customer-facing. Tools that try to imitate humans tend to fall flat on their face, according to Peters.

“I think, if done correctly, (technology) should actually require and help us to hire more employees,” Peters said. “How do we not create a hurdle for our customers but allow our capacity to increase is a really healthy way to look at it.” 

 

Changing a business model

Co-owners of The Side Garage, Ashleigh and Elena Leon, tried a brick-and-mortar retail store. They sold their line of branded apparel; however, the customer-service side of their business outgrew their retail. So, they decided to put their focus where demand was.  

In addition to its online branded apparel, The Side Garage offers a variety of services including custom screen-printed apparel, live event printing and creative design services. Their change of business model allowed them to cut some costs. 

“If we were to get a retail space this size, it would probably be three times the rent,” Ashleigh Leon said. “In an ideal situation, we’d love to be back in a neighborhood with that kind of scenario, but it just didn’t make sense for our next step as a business.”

In 2023, The Side Garage moved out of its Valley Junction location into a former mechanic’s garage nearby at 1848 Fuller Road, Suite 3 in West Des Moines. With the new and bigger location, they were able to save on rent. They also no longer have to attend to foot traffic coming in and out of their store. Instead, they meet with customers by appointment only, and customers can only pick up online orders at designated times. 

“The nice thing about having it be more of a print shop versus an actual brick and mortar retail is we have a lot of flexibility in setting our hours around our workloads,” Leon said. “We can take off at 4 on a Friday if we don’t have any pickups.”

To further cut costs, the company uses an online tool called Printavo. This software automates the print shop’s workflow, creating online quotes, invoices and calculating prices.

However, maintaining relationships with customers is still an important aspect of a business. The Side Garage keeps a presence in the community by making appearances at the Downtown Farmers Market, hosting “garage sales” around the holidays and remaining visible on social media. 

“It’s worked out for us to be a little bit more diversified, and it’s been a little bit more enjoyable because we tap into the communities that we wouldn’t be exposed to if we just focused on our brand,” Leon said. “You’re never married to one direction. You can try a few different things and see what works best for you.”