Shane Murphy (00:02.062)

Welcome back everyone. Today we're here with Sterling Douglas. He's the co -founder and CEO of Chowly, which provides point of sale integrations with third party ordering solutions, as well as offering their own online ordering, smart pricing and digital marketing solutions to over 17 ,000 restaurants across the country. Sterling, super excited to have you on today. Thanks for coming and sharing your wisdom and knowledge and just your story in general.

Sterling Douglass (00:30.263)

Thanks for having me on Shane. I'm looking forward to sharing some stories and talking about some marketing tactics that some restaurateurs can take home with them.

Shane Murphy (00:37.422)

Awesome, I love that. Maybe before we dive into the tactics, can you share a little bit more about your background and the story that brought you into the industry here?

Sterling Douglass (00:46.679)

Yeah, I think like a lot of people, I kind of stumbled my way in to the restaurant space. I was originally an actuary for those of you who actually know what that is, but it's pretty nerdy profession, a lot of math and left after a couple of years because I just had that entrepreneurial bog. I just had that itch to scratch. So I started my first company was a look as a bar ordering app. So customers in a crowded bar could order and pay for drinks on their phone. And the company failed after six months and.

But one of the problems that we discovered was that there was point of sale integration was a problem. And so this kind of led us to discover the idea for Chali and that integrating instead of our own app into point of sale systems, why don't we integrate all the apps that already exist? Like, you know, the time Grubhub and E24 and Caviar. And that's how we kind of got started. We built really strong point of sale integrations and then the more...

we built those up the more restaurants that we added, the more they asked for other things like first party online ordering, digital marketing tools and things like that. So fast forward a few years and, you know, I kind of fell in love with the SMB restaurant space. They are entrepreneurs as well, which is my true passion. So it's kind of a dream. I get to help entrepreneurs every day.

Shane Murphy (01:58.35)

I absolutely love that. It's funny, there's a lot of overlap between your background and story and mine. I originally started an online ordering company and we pivoted, it was not an actuary. I don't have the math jobs for that. So definitely not, but my online ordering business, we ended up seeing all of the challenges with like customer data and decided, hey, what if,

Sterling Douglass (02:08.378)

Nice. But were you an actuary before that?

Shane Murphy (02:26.03)

What if instead of being the ordering platform, we sit on top and help manage the data flow? And so, you know, definitely understand a lot of those problems and have loved what Chowly has accomplished through the years. You know, maybe the focus of this type of conversation is obviously on the tactics that these restaurant operators can go and take away. What have been some of the favorite tactics that you've

Sterling Douglass (02:47.129)

Mm -hmm. Sure.

Shane Murphy (02:55.342)

seen and helped others to implement through the years.

Sterling Douglass (02:59.707)

Yeah, so I'll be honest, I'm a little newer to the digital marketing side of the restaurant business. We acquired a company last year called Targetable, which was basically a done for you digital marketing tool for SMB restaurants. And one of the reasons that we really wanted to do that is because when we were talking to restaurants, right, we were doing, we were integrating their third party orders, we were doing their first party orders. But at the end of the day, the value of your ordering is how many orders you're actually bringing.

And especially in the SMB restaurant side, they can't afford these, you know, these marketing teams. Right. And so when we acquired Targetable, it was to solve that exact problem and start to leverage the different tactics and things that they were doing to help their restaurants. And it's been really interesting, Shane, as I've been getting educated on the space from the folks over at Targetable. And so when you ask about like basic tactics, I try to zoom out and try to think what the restaurant is trying to accomplish first.

because there's a lot of different things you can do in the digital marketing side of things. And some things are more geared towards, you know, generating demand in the first place, like actually creating more demand for your restaurant. And some things are actually more for creating more repeat orders and trying to get them. A common one I think about is email marketing. Email marketing is not going to find you new customers. Email marketing is going to generate more orders from your existing customer base. And so it's a very different...

tactic, if you're going to try to put more into email marketing or SMS or push or whatever you want versus, Hey, maybe we want to do more awareness campaigns. Maybe we want to see, you know, who is actually searching for us. How can we increase traffic from Google? and how can we make sure that we have our ratings and our hours up to date? You know, one of the number one things we tell our restaurants before we do anything else is make sure your listings are all up to date.

because I think of each one of these as, I think of restaurants with a physical storefront, I think of them with a digital storefront. And every one of these listings is another door to your digital storefront. Google's the biggest store. But a lot of times you go to Yelp or TripAdvisor or Apple Maps, these are smaller doors, you might appear as closed. And so you have digital foot traffic that's walking by that literally can't open the door to get into your digital storefront. So when I think of tactics, I really zoom out and think about what are you trying to accomplish?

Sterling Douglass (05:20.858)

because there's a big difference between trying to create more orders from existing customers and trying to get more customers in the first place.

Shane Murphy (05:27.438)

Yeah, and obviously both have a space and are important in this game. Why, I guess, when we're thinking about maybe the repeat side of things and where email marketing could come into play and increase in that purchase frequency, how should restaurant owners be thinking about applying that type of tactic versus the...

Sterling Douglass (05:31.993)

Mm -hmm.

Sterling Douglass (05:42.553)

Mm -hmm.

Shane Murphy (05:57.07)

the demand gen and the new customer acquisition in the first place, and why would they spend resources in one versus the other? Not necessarily at the expense of the other, but there is a difference there.

Sterling Douglass (06:11.708)

Yeah, look, there's a certain amount of customers that will become repeat orders, right? And there's only so many in the area. If you whittle it down and think about the different characteristics those customers have to have, you start getting into somewhat small numbers. One, they just have to be willing to go out to eat pretty often, which not a lot of people don't. A lot of people, that is a special treat. They're only going out to eat once a month.

So that means you only have 12 opportunities a year to try to get them to go to your restaurant. So if you've already got one and you're competing against 11, that's going to be some stiff competition. So you've got to think about, all right, well, number one, they have to love our food. Number one, they probably have to be, or number two, they have to be close by. Number three, they have to actually go out a lot. Number four, they have to have an incentive, you know, to come back. All right. And that's where things like promo codes and emails or LTOs or things that give them something new to try. Those all kind of come into play.

And so it just depends on where the restaurant believes there is more meat to chew on. Like where is there more meat on the bone? And a lot of times you can actually tell fairly quickly. We're big proponents of actually buying branded keywords for restaurants on Google ads. If you talk to digital marketing agencies, a lot of times they'll tell you not to do this, because people are already searching for your restaurant.

Why would you wanna pay Google for that click and for that view? But the other piece of value you get other than the click is they're going to give you more information about what people searched for that wasn't your branded name, but that ended up clicking on your name. And a lot of times that can inform how to create more awareness for your brand. For example, we have a lot of groups where instead of there being food near me,

if there's a lot of Spanish speakers in the community, it'll actually be near me, but in Spanish. And that keyword is a completely different keyword that you can actually acquire usually for quite cheap on Google ads. And you wouldn't find that out if you weren't buying that branded keyword in the first place. And so a lot of times what you're paying for is learning and that can increase a lot of awareness and get more of that top of funnel demand creation for your restaurant.

Shane Murphy (08:33.582)

You know, that concept of paying for learning, I think is interesting because so many restaurant owners, especially if you're a small restaurant operator, you've tried so many different marketing tactics through the years, and often you don't know if they're working, you feel like you're throwing money at the wall, and you wasted dollars. But if you're doing it right,

Those are investments in learning either what to do or what not to do so that you don't keep spending money frivolously. You want to learn from every dollar that you spend and see how it can make you more.

Sterling Douglass (09:15.101)

It's really hard to do, especially in a restaurant industry where the margins are so slim. It is so hard to accept a soft cost or it's so hard to accept learning as something to pay for, but it is so critical. And it's not just restaurants, it's every business. There are tons of times where at Chowly we have spent money and we haven't gotten the dollar ROI, but what we did get was a very important learning.

Whether we learned more about our customers or whether we learned more about our data, or we learned more about the market, we learned more about our product. Those things have value. It'll always be difficult to try and like to try to monetize like, all right, that value was worth, you know, $800, but it is incredibly valuable. And so for a restaurant learning more about their customers is a really great investment because they may know the customers that come in the door, but it's really hard for them to know the ones that are searching and passing by their digital storefronts.

because unless they're making some type of investment, those are really hard to see.

Shane Murphy (10:15.694)

Yeah, so we're talking about the importance of data and you highlighted a great way to get those learnings, which is buying some digital ads through Google Ads, which can often be done for fairly cheap to get some of those learnings. What are other ways that restaurant operators can get learnings about their customers or data that could actually be used for marketing?

Sterling Douglass (10:27.58)

Mm -hmm.

Sterling Douglass (10:44.764)

Yeah. I mean, man, data that can be used for marketing. I mean, any attribute that they can get on their customers is going to be helpful. I mean, man, yeah, there's a lot of, a lot of ways we can go there. in terms of competitive analysis, I think that there's a lot that they can glean off of by looking at their competitors, you know, in the areas, restaurants on the whole, if you look at the entire U S.

It's a relatively oversaturated market. There are typically more restaurants per square mile than are needed to meet the demand of the consumers in that same square mile. This makes it hyper competitive, especially on the local side of things. And so making sure that you have a very good grasp on what your area does, what they can handle, what the competition is like, can give you...

a ton of data that can inform decisions. Something as simple as Google ratings can actually be really helpful and not just the ratings themselves, but the velocity of them, right? How many ratings per month are some of your competitors getting and how do you compare? This can actually give you insight into how they're doing from a total sales.

perspective. If they're doing 10 reviews a month and you're doing 20, that's an indicator that you might be actually doing significantly better than them from a volume and you're winning more of the customer's wallets in that very competitive area that you're in. Now, there's also other variables. If you have a polarizing staff, you're going to get a lot of views because reviews usually come in the form of one star or five stars.

Shane Murphy (12:33.102)

Yes.

Sterling Douglass (12:36.381)

So if you have a polarizing experience, you might just generate more reviews because that's what people write about. But it is something, it's an indicator, it's a piece of data that can help inform kind of how you're doing and what your expectations are.

Shane Murphy (12:51.502)

Yeah, and you talked earlier about, there's your physical storefront, but there's also the digital storefronts. And every listing that you have is a door that can potentially be opened and lead to orders and transactions. You mentioned how Google is one of the largest digital storefronts. Maybe -

Sterling Douglass (13:10.757)

It's a big door. It's like 10 feet tall. It's like barn doors opening up to your restaurants.

Shane Murphy (13:16.462)

Yeah, can you maybe like speak to that a minute on like how do restaurants take advantage of that barn door and build towards that because there are opportunities there to drive more revenue even without going and saying hey I have to spend a ton of money to optimize this. Can you speak to that a little bit?

Sterling Douglass (13:38.429)

Yeah, it's less about money and more about time. And we talk a lot to our restaurants about this idea of return on time. Everybody talks about ROI, like return on investment. And a lot of restaurants do that. When you're a smaller operator, when you're one, two, three stores, and as the owner or kind of the lead operator, you, your time is actually your biggest resource.

And making sure that you're spending time on the things that are getting maximum impact is critical. You could be a Michelin star chef. That doesn't mean that you can, you know, or like orchestrate and like lead an orchestra or like write a song. Could you do that? Yeah, probably. If you're a Michelin star chef, your creativity and your brain's off the chart, but it's not the best use of your time. And so when I think about operators and I think about optimizing for, for, for Google and making sure that that's done,

It's not, it's less about the money. It's more about the time that it takes. Cause not only the, the, the one time kind of like set up and fill out all the fields, there's constant upkeep and Google changes it so often. Like every, every month or two, Google changes that, right? They, they just added promos to their section for that, that Google play sheet. And when you search the restaurant thing that shows up, you can link your socials now.

Shane Murphy (14:48.75)

same.

Sterling Douglass (14:59.806)

so you can post on Instagram and those posts will actually show up there. There's a bajillion different metadata fields that, that you can put on there. And the way that Google tends to rank whether your restaurant shows up is how much information you have given them because they believe that the more information you give them, the more the customer wants to see it. Right. Customers want to, they have questions. They're trying to see if you're dog friendly. They're trying to see if you have a patio, they're trying to see if you're what your hours are for, for Memorial day.

And typically, the more data you have in Google, the more likely you're going to be to answer that question and give the information that that consumer is looking for, and that's what Google loves. And so making sure that that Google profile is as rich as possible is key to driving more traffic, and Google will reward you for that work. But the question is how, if that's how you want to spend your time. And there's a lot of great tools out there. And look, it's more than just Chally. Chally will definitely help with this. We do this all the time. And it's...

something that we love to help with, but there's other tools too. And it's a great case where you can get a pretty good return on your time if you can outsource that one to a tech provider who does it all day.

Shane Murphy (16:09.134)

Yeah, I love that. So the more information you can have in that Google listing, the bigger that barn door can open for your customers. I absolutely, I love that analogy. I'm gonna start saying that so often.

Sterling Douglass (16:23.102)

I do it, I do it, I love it.

Shane Murphy (16:26.606)

And another piece to the puzzle is that enigma of how do I know that the marketing tactics that I'm implementing are actually working? And this is crucial because marketing in SMB restaurants historically has been a throw it at the wall and you don't know if it stuck or didn't. How have you seen operators go about actually tracking what's effective and what isn't?

Sterling Douglass (16:38.098)

Mm -hmm.

Sterling Douglass (16:55.424)

Yes, and this is a giant, it depends answer. Every restaurant is going to want to see if I spend $1 ,000 on ads, how many sales did I get from that ad? That is what they want. They want to see a direct return on ad spend, a ROAS. This is what a lot of enterprise restaurants talk about all the time. But we found...

Shane Murphy (17:00.974)

Mm -hmm.

Sterling Douglass (17:24.513)

The overwhelming majority of time, that's actually not what they should be focusing on because there's an order of operations that you need to do to build a foundation before you can start trying to use ads as a direct way to generate net new sales. Now that's something that we do and it's something that is important, but you have to take care of two things first. You have to take care of your awareness and you have to take care of your acquisition.

Once those two things are complete, then you can look at attribution or conversion, depending on the platform you're on. They call it something different. And those things are measured differently. Awareness is going to be much more measured on things like how often are people searching for your restaurant? So the example I give a lot, there's a place near near me, a little South of Denver. It's an ice cream shop and everybody in Colorado Springs knows this ice cream shop.

So when they Google stuff, they don't Google ice cream and find this restaurant. They Google the restaurant and then order from it, but they have another location that's up north of Denver. And it's the opposite story. People are searching for ice cream and finding them. What that means is that their stores in Colorado Springs have excellent awareness. So we don't need to be spending money on trying to increase awareness. They are, everyone knows they exist. Right. But that other store.

We need to start with awareness and we need to make sure people actually know the brand is there. So we need to just generate more of that super top of funnel trap digital traffic to that door. But let's go back to that one in Colorado Springs that everybody knows this restaurant. Right. So now we got to make sure, all right, are we, is that digital? Are we capturing it? Like, is that, is that digital traffic? Are we actually acquiring those people who are searching to them? And this is when we look more at cost per click.

Right. So as that cost per click super low, because everyone's kind of already searching for the restaurant. So that's a metric that you'd actually look at if you were focusing on acquisition. But then you've even got to go further. All right. If we, if we know that they they're searching for us and we're acquiring the click, now we can start looking at attribution. If we do an ad, are we going to get more of those? And we can actually connect that and see that, Hey, we spent a thousand dollars in ads. It generated $8 ,000 of sales.

Sterling Douglass (19:43.138)

Here are the 120 customers that did it. Here's what they ordered. Here's their email address. Now let's throw them into the email marketing so that we can try to turn them into repeat customers because everyone knows repeat customers are actually the most profitable. So when we kind of zoom out, you know, and we think about this process, we really think about creating the demand, which is the awareness, the, awareness acquisition attribution. We think about capturing it and making sure that we have a high performing online ordering site. And then we actually think about converting it.

That means it needs to be integrated. That means it needs to be profitable. And that means we can kind of convert them into repeat customers. Cause at the end of the day, all this is for not, for not converting this into profits.

Shane Murphy (20:22.478)

Absolutely. And I love the funnel that you described and that especially at the end, the target is to have that repeat guest. If you can have that repeat guest who loves the place, loves the food and keeps coming back and likely is gonna bring their friends or go with others, that becomes your most profitable customer. And...

Sterling Douglass (20:33.155)

Mm -hmm.

Shane Murphy (20:48.366)

once you've established the baseline of the awareness and the acquisition, then your dollars go a longer way because you can focus on that repeat guest. That's a fabulous way to describe that. Now, I know that you talked about Chalet's acquisition of Targetable and the goal to really have this done for you marketing experience. And I know,

Email marketing has been a tool that Chowly has implemented for a lot of their customers along the way. Can you speak to the types of results that people get with email marketing? And if you're just a first time operator who has never done email marketing before, how does one go about actually setting that up and what do they do for email marketing?

Sterling Douglass (21:44.998)

I mean, the first thing they have to do is actually have emails. right. And, and your email list is, is incredibly important. And there's a, there's a, there's a size that it gets to that will kind of inform you that you, that you have enough. I've talked to restaurant tours who know that per location, once I get 4 ,000 emails on my email list, I know that restaurants going to start making money.

Like there is, there are, there are like, that's how important it is. So having just an email list and it seems so simple, but whether you're getting that from one of the wifi setup tools, whether you're getting that from your first party ordering, whether you're getting that through just like a newsletter sign up, or if you're, if you're trying to get a loyalty program, they're more expensive, but it's all these ways to collect data. And at the end of the day, you're trying to collect that email list or you're trying to get the phone number and get a phone number with text marketing is incredibly effective.

You have to be careful you don't spam them because it is a bit more intrusive. But in terms of open and reply rates, it's significantly higher than email. And so you've got to collect those data and you can do that a number of different ways. And then it's a matter of, all right, what am I emailing them? Am I providing value? The value can be simple. It can be just a picture of a delicious meal. Like it can be a 10 % promo. It can be a BOGO. It can be a limited time offer.

It can just be a, hey, we missed you. Like it's gotta just provide a little bit of value. but really you're just trying to stay top of mind and capture some of the mind share, you know, all of those customers. because the more you do that, the more connected they'll feel. There's a customer, there's a restaurant by me. you know, I live right outside of Denver and, their loyalty program, Solaris. there's no points. there's, there's no, they don't even leave your email. It's just your phone number.

And all it is is the owner texts you a dad joke every Monday. That's it. So every Monday I get a dad joke. Some of them are good. Some of them aren't, but I'm connected like to that brand and it's always top of mind. So when I'm in that area, I'm going to go grab a hot dog from Harley's.

Shane Murphy (23:56.718)

Yeah. I love that. That's probably one of the more unique, like actionable tactics that I've heard in a while is the dad joke text loyalty program. I love it.

Sterling Douglass (24:03.91)

You

Sterling Douglass (24:08.334)

Monday dad joke every every Monday I start off with a little smile.

Shane Murphy (24:13.55)

That's fabulous. And that's the other thing to remember that it's not always sheerly about this marketing impacted and brought a transaction directly. It's that connection that Harley's made with you that causes you to them to be at the top of your mind when you're hungry and you need to go eat or, hey, I'm in the mood for something fast. well, Harley's is at the top.

And I'm thinking of the dad joke because I have this connection and this relationship with the brand.

Sterling Douglass (24:46.119)

It's the hospitality moment. Every great, every great brands in the restaurant space all have a hospitality moment. There's one thing that they do, maybe two that you associate with them. Everyone knows that when you go to Chick -fil -A, they don't say you're welcome. They say my pleasure. Right. And there's a million different ways to do it, but that hospitality moment is how you connect with, you know, with your customers and knowing what it is, and then just repeating it over and over again. It's one of the keys to the fastest growing restaurant brands that we see every day.

Shane Murphy (25:15.918)

awesome. Sterling, this has been just an action -packed 25 minutes here. Thank you so much for coming and sharing these tactics, these insights, and more of your story. How can restaurant owners follow you and and or learn more about Chowly?

Sterling Douglass (25:34.44)

Yeah, of course. I mean, simple chally .com to learn more a little lead forum there. Tons of content with tons of case studies, blog totes on a lot of the stuff that I talked about today. I am obsessively posting on LinkedIn. I post about this stuff a lot just because I love talking to you about it. I love talking about it and I love talking about entrepreneurs. So, you know, feel free to give me a follow there too so that you get more of the content if it's interesting to you.

Shane Murphy (26:01.102)

Aasimul Sterling, thank you for coming on. We really appreciate your time and your insights today, thanks.

Sterling Douglass (26:06.696)

Thanks for having me, Shane.