Archive for April, 2007

Questions From Readers

Question: Since most loyalty programs involve some sort of comp (discount) what do you propose instead as the incentive?

Answer: Whatever they want - except my money!

If you want to be successful long term, you have got to have an ongoing conversation with your guests in order to understand:

1. who they are (segmentation) and
2. what they want from their relationship with you – period!

Loyal guests (read raving fans) will tell you that they are not looking for discounts. They are looking for things from their relationship with you that mean/bring more value to the relationship – not their wallet. Things like members only events, information, acknowledgement of their contribution to your relationship, first offerings, input into the process – to be a part of things going on, etc. This is about relationships – not money! If you continue to play in the price/money mud pit, you will never get out without some major pain.

Marty Neumeier wrote a book late last year called “Zag” (must read!) and in it, he uses the same six reasons why loyalty programs don’t work, as I have used to denounce the use of discounts in general.

1) Most Loyalty programs are based on discounts, which ‘train’ existing customers to expect lower prices and wait out normal pricing,
2) They attract loyal customers who would happily pay a premium,
3) They discourage new customers by making them feel punished or excluded,
4) They encourage competitors to retaliate with me-too programs,
5) They reduce profit margins, which
6) Reduces the company’s ability to serve customers at formerly higher levels.

The truth is, loyalty can’t be programmed.

Two more of the biggest factors why discounts are not a long term strategy that we have yet to cover are the lost opportunity cost, and loading up on the “low return” guest versus the “higher return” guest, in terms of their long term profit contribution to your operation. I intend to address these in a post very soon.

Have Fun Today!
Jeffrey Summers

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Those Damn coupons!

WARNING! THE FOLLOWING BLANKET STATEMENT IS ISSUED CONCERNING ANY AND ALL TYPES OF DISCOUNTS.

There is NO place in a serious Restaurant Marketing plan for ANY Discount option. This includes all coupons that offer discounts of any kind – INCLUDING Loyalty Programs!

More to come later.

Have Fun Today!
Jeffrey Summers

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Speaking of Talking with your guests!

Customers want to hear from you. Really.

Earlier this week at the Genesys Telecom Lab’s G-Force customer conference, president and CEO Wes Hayden and Nicolas de Kouchkovsky, head of marketing and business development, revealed the results of the company’s 2006/7 Global Consumer Survey. According to the findings, customers are open to cross-sell, but using different media based on the context and if the offer is relevant. What percent of the 4,500 consumers surveyed said this? 95 percent. Wow.

In fact, 89 percent of respondents expect proactive communications from companies. But, they don’t always expect it to be a “sales call.” Eighty-five percent said they would have a more positive opinion of a company they buy from after receiving a courtesy call from that firm.

As much as customers love phone interaction, 86 percent say they also want to communicate via email, and 45 percent say it’s their preferred method of communication. Additionally, 28 percent like the option of Web chat. Interestingly, while 17 percent of the respondents globally say they would like SMS notifications, only 2 percent of Americans concurred.

Customers also want to be able to reach you.

More than three quarters of respondents say they feel pushed to use self-service instead of speaking with an agent, and 66 percent say they react negatively when pushed this way. In fact, 76 percent fell less loyal or will take their business elsewhere if they feel pushed to use self-service when preferring to speak to an agent.

Although self-service is an important option to offer customers, beware pushing customers to use it and be sure to deliver a compelling customer experience whether that experience is via self- or assisted service. Why? According to the survey, 40 percent of consumers have stopped doing business with a company due to a poor contact center experience, and what’s more, 38 percent say that service makes the biggest impact on their loyalty to a company.

What does this mean to you?

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Questions From Readers

Subject: Profit

Question: Our small cafe is supported right now with in house catering. We see any were from 325.00 to on a good day 625.00. I need to know good was to bring in more patrons and see our cafe break a grand a day. Any ideas?

Answer: You are in the same boat as a lot of my former clients used to be. You are not going to grow your success by doing more “things” but by doing things differently. Let’s understand one thing up front. The only thing that will make you money in your business is MARKETING! Everything else in your restaurant is an expense.

Now here are my top 10.6 things to start doing today to grow sales tomorrow.

1. Change your way of thinking about doing business. Realize that everything you do in your business is a marketing event at each point of the guest experience - each guest that walks in your door, sits at your tables, eats your food, pays their bill and then departs, is receiving a marketing message from you and your staff. What are you telling them at each point? WOMM (Word of Mouth Marketing) will make or break you!

2. Realize that every time a guest walks in your door that is it an event of some kind in their lives! Treat it as such and add to its “specialness” for them! Birthday, anniversary, job promotion, job loss, first date, last date, lunch with a colleague, lunch with a family member, etc…every day means something, find out what it is and then celebrate it with them! This is the only true, 100% guaranteed way to make them regulars.

3. Make sure you get your operations in great shape because good marketing can kill a bad business. Don’t promise them a great food offer if it takes your BOH more minutes to prepare it than they can get elsewhere – or screw up the service side!

4. Analyze your market. Don’t continue the cycle of “doing” without thinking first as most operators in your situation do. You have begun to feel like you need to “do” something, so you start “doing” things like ads, discounts etc… While these acts may work to some degree in the short term, you will not have substantial long-term success in your marketing effort if you do not objectively look at your market area to see where you fit or don’t fit and therefore your marketing events ability to drive home the right message to the right people at the right time in the right manner.

5. Determine your USP (Unique Selling Proposition). What do you do different, make different, offer differently than you competition – hint: it’s not your food or service!

6. Create a smart marketing plan. Create a plan to leverage what it is you do differently and better than your competition. Outline marketing events that you will pursue that leverage your USP. Create a marketing calendar for the quarter, then 6 months, then a full year. Track events and make notes on your successes to use next time you revisit this event to use in the future.

7. Develop a target market. Communicate the story of your difference to those people who will put their butts in your seats because your difference is what they want– target market.

8. Seamlessly execute the plan to a target market. Website, email, data base, direct mail, etc…whatever tools fit your plan best, make sure you use each medium to drive the same consistent message. Don’t send out an email blast about your new product, service or offer without pushing people to your website where they will see and read more about it and where you can capture guest personal information to build a database from which to send out more marketing messages! Follow this up with good POP inside your four walls to drive home the message or to begin the conversation in the first place.

9. Measure your ROI (Return On Investment)for each marketing action. Never undertake a marketing event without knowing what it will cost and what profit you will make!

10. Re-engineer your plan to leverage actionable results. Use these results to measure the success of each event and then re-engineer your plan to accommodate those things that work and eliminate those that do not.

10.6 Wash-rinse-dry-repeat!

Last thoughts at random:

• If you are doing a good inside catering business, maybe that’s what your market wants, maybe you should analyze the possibility of doing that as your main operational focus & not a restaurant. You wouldn’t be the first to back into a different business after starting a restaurant.

• Instead of using the catering to support your restaurant use your restaurant to support your catering. Create your catering menus by utilizing you guests as “food focus groups” to try new dishes that will go on your catering menus. Use them to fine tune offerings that you can become known for and that can only be gotten from you!

• Look at other sales programs. Retail, delivery, take-out, etc…

• Expand you inside sales programs to include features you currently do not offer. Ask your guests what they want next!

Finally, if you do not feel like you have the expertise to take on this project, then by all means, hire someone who can Coach you to success! Can you really operate on yourself? You should not do your own marketing if you do not know what you are doing. Do what it is you do best for your operation and hire out the rest of what needs to be done. You will see much more success in theses areas and much more quickly if you do.

Have Fun Today!
Jeffrey Summers
Restaurant Coaching Solutionsâ„¢
www.RestaurantCoachingSolutions.com
TOLL FREE! 1.877-535-2324

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Questions From Readers

Subject: Food costing a salad bar

Question: Jeffrey, my question is two fold. One, is there a standard food cost formulation for an extensive salad bar (one with more than 50 items)? Two, what is a good food cost (avg.) for this same type of salad buffet?

Answer: 1.Yes. But the number of items has nothing to do with the calculation except that obviously, the more you offer on your salad bar the most expensive it can become – relative to your pricing model and volume.

2.There is no standard because no two bars are alike. The ratio for measurement comes from comparing your actual cost to your margin. Actual in this case is – for all practical purposes – your ideal since we assume waste is at a minimum and the products can be rotated through without any spoilage.

I have a Buffet Menu Pricing Spreadsheet available for free on my website. The link is given to you here. You will need to copy and paste it into your browser.

Buffet_Menu_Pricing_Worksheet.xls

Yes, I could recommend one, but I would need to see a lot more information to do a more complete analysis.

Have Fun Today!
Jeffrey Summers
www.RestaurantCoachingSolutions.com

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Questions From Readers

Subject: Franchising
Question: Jeffrey, when an operation is considering franchising it’s organization, what can be considered reasonable growth on a year by year basis? I’m thinking in the 1st year, 3yr and 5yr spectrum.

I know there are many factors to both success and failure in franchising, what is the single biggest factor for both success and failure.

Answer: Huge question!
There are no numbers available that can be used to extrapolate any type of realistic growth matrix for an indeterminate and as yet, untested franchise operation. The biggest factor that can be used to gauge potential growth is the amount of unsolicited franchise inquiries you currently receive. If you are looking for a way of determining potential, use the number of inquiries you get per year as a conservative MAXIMUM potential - obviously all potential franchisees would not qualify, but this could be your “ideal” target. Then you could simply extrapolate your current operations sales numbers to fill in the rest of your future potential numbers.

As for the second part.

The single biggest factor for success is the degree of uniqueness and differentiation you can bring to your concept. Both franchisees and guests want something different and the more unique and different your concept, the better the attraction for both growth in the number of probable franchisees as well as system wide sales in each market you and your franchisees play in.

The single biggest factor for failure is the same thing. Simply grilling a better burger or mixing a better margarita just won’t cut it. The world really doesn’t need another restaurant. So if you can’t answer the question of “why would people want to patronize my business over the guy next door?” then I would go back to the drawing board until you can.

Have Fun Today!
Jeffrey Summers, Head Coach
RestaurantCoachingSolutions.com

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Dates Set For Next Restaurant Marketing Session

June 9th & 10th.

For more information call me at 877.535.2324.

This is two intense days of analyzing your current Restaurant Marketing efforts in order to design a better Marketing plan for your business. continue

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Bruce Tulgan: It’s Okay To Be The Boss

Get This Book!

I don’t recommend a lot of other people’s books,
but when I come across one as good as this one,
I jump in with both feet!

It’s Okay to Be the Boss

Bruce Tulgan
$16.29

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Convection oven 101

Don’t let the fancy terms throw you. All ovens are radiant. Heat radiates from the element to heat food. Convection ovens have built in fan to circulate the heat more equally, which shortens the cooking time.

The Washington Post

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How to make employees want to stick around

Retain employees by focusing on the factors that make them want to stay instead of those that lead them to leave. Offer and deliver perks, such as day care, career counseling or discounted memberships, that tie employees to the company and community.

Forbes

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