How To Make Your Restaurant A “Third Place”

The concept of the “third place” was first developed by Starbucks, and anyone who has been in a Starbucks immediately understands the principle: make your business feel like a home-away-from-home. Unfortunately for Starbucks they made way too many homes just as the economy turned south – tripling the number of locations in just three years before closing 600 stores at the height of the recession.

Now other fast casual chains are cashing in on the third place concept, most notably Panera, which has weathered the economy with strong profits and steady growth.  Panera has a lot of things going for it – customers view the brand as healthy, comfortable, and welcoming – the perfect place to eat, socialize, and work when you’re not at the office or at home – the quintessential third place. These companies have proven that the concept of third place works.  No other approach has been as successful in the past decade in terms of creating customer loyalty and word-of-mouth marketing.

So how can your restaurant cash in on the third place concept? 

Set the mood. Booths and tables with four chairs around them is standard restaurant furniture – and that’s exactly why your customer doesn’t quite feel at home in your establishment.  Comfortable, spacious seating is the first thing that jumps out at customers who walk into a Starbucks or a Panera. Of course, that kind of seating is expensive to buy and expensive to house because it eats up so much space.  That doesn’t mean you can’t convert one section of your restaurant into a homey retreat and keep the rest of your restaurant an efficient table-turning machine.

Provide entertainment. Interactive digital signage, high def TVs, and super fast WiFi are all great ways to make your customers feel right at home.  With all the technological amenities they need at their fingertips your guests will settle in and stay awhile.

Take the long view on table turnover. “Turning and burning” – getting customers in and out of your establishment as quickly as possible – has long been the way most restaurants make their money.  When you convert part or all of your restaurant into a third place concept, you have to take a much longer view on the table turnover question. When you let customers lounge around for hours on end you may not be turning over a lot of customers but the ones who do stay tend to invite their friends, and when those friends discover your comfortable, homey atmosphere they’ll come back with their friends… and so on.

Don’t drop everything to become a third place. For most restaurants the most effective way to leverage the third place concept is going to be a hybrid approach.  Take a cozy corner in your restaurant, convert it into a comfortable lounge, and watch your lunch/afternoon shift grow in business.  During the dinner rush, go back to doing what you do best and let customers waiting for a seat or happy hour spillovers fill up your little third place – to the envy of your customers in regular seating.

Creating a home within your restaurant will take some investment, to be sure.  That investment can also pay off in a big way by taking those long hours between lunch and dinner and turning them into a solid moneymaker.  More indirectly, customer loyalty and word-of-mouth buzz will almost certainly make your cozy little investment one of the most effective marketing tools in your arsenal.