Congratulations, you have just completed your journey through 2007. Movement has power beyond understanding. Keep on going! Keep creating customer advocacy!
May 2008 bring peace, understanding and greater customer advocacy!
“Orders could be placed through a media player, wireless PDA, or cell phone. The obvious benefit to customers would be in avoiding the wait in line to order their favorite coffee drinks or hamburgers.
But the system would also have benefits to restaurant owners beyond providing better service. Each customer using the system would get a unique identifier for tracking the establishments they visited and what they bought. The information would be stored in the devices and synchronized with the computers of participating merchants.”
An expectation has been created by parcel delivery services, that customers can track their purchases online. The natural outgrowth of the WiFi protocol is that restaurant customers would have the ability to follow their order from the moment the order is placed, through the preparation, until the food is delivered. This functionality will enable customers to time the experience at your restaurant. The discomfort caused by the ambiguity of wondering when their meal will arrive will be eliminated.
The technology exists today, however at price points that are not feasible. This vision however will quickly become the standard. Whether you are ready or not, customers will demand tableside tracking.
”Restaurant operators were also less optimistic about sales growth in their establishments. Twenty-nine percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down from 39 percent who reported similarly last month and the lowest level on record. Twenty-eight percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, up from 25 percent who reported similarly last month.
Restaurant operators are also scaling back on plans for capital spending. Fifty-one percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down from 55 percent who reported similarly last month.
National Restaurant Association's Restaurant Performance Index
Values Greater than 100 = Expansion; Values Less than 100 = Contraction
Source: National Restaurant Association
It would seem that some of your brethren are battening down the hatches. It is much easier to differentiate yourself and provide an exceptional customer experience when your competition is focusing on survival.
Seize them because Opportunities Abound!
In fact if everyone wants to be your customer, that is a problem If you are very good there will be individuals who do not like you, that’s Ok. For passion to be real there will be both a positive and a negative reaction. You have an obligation to treat everyone in the same manner, however everyone will not have the same reaction to you.
Everyone will not be your customer.
“you have the power to change everything that's to come. And you can do that by asking yourself (and your colleagues) the one question that every organization and every individual needs to ask today: Why not be great?”
New Years is a time to reassess, I personally use the Winter and Summer Solstice. Whatever the metric, why not be great?
Venture Capital Lawsuits:
Patrick Hosking, Times Online commentary The law is now an asset is very disturbing.
“The notion of litigation as a separate asset class is a novel one. It's hard to imagine fund managers one day allotting a bit of their portfolio to third-party lawsuits, alongside shares, bonds, property and hedge funds.
But some wealthy investors are starting to dabble in lawsuit investment, bankrolling some or all of the heavy upfront costs in return for a share of the damages in the event of a win.
Profiting from other people's lawsuits, a practice known as champerty, is illegal in some jurisdictions and risks accusations of ambulance-chasing, is concentrating on backing business plaintiffs, where the practice is better established and more accepted.
Pursuing legal claims can be frighteningly expensive. Plaintiffs have to commit management time and cash years into the future with no certainty of success. Getting an outside investor to share some of the financial pain can be very attractive. So can tapping their litigation experience. While most large companies are well resourced with in-house lawyers, few have litigation experience. “
An unfounded lawsuit can put tremendous strain on your restaurant, even if you are properly insured. The
(Link Marginal Revolution)
“customers bring up the coupon on their cell phone screen and present it to the clerk to redeem the coupon.
With cell phone coupons, restaurants can learn a lot more information about who is asking for and redeeming coupons and can follow the coupon process from start to finish, as opposed to only keeping track of how many coupons go out and how many come back.
Cellfire shares demographic information with its merchant clients.
The coupon is based on permission marketing where the customer has given permission to have coupon of restaurants marketed to them. Cell phone use is pervasive in the younger demographic that will grow into an older demographic and expect your restaurant to market to them in channels that they are comfortable with?
What is your restaurant’s Cell Phone Strategy?
Christmas Bells by Henry Wadsworth Longfellow
I heard the bells on Christmas Day
Their old, familiar carols play,
And wild and sweet
The words repeat
Of peace on earth, good-will to men!
And thought how, as the day had come,
The belfries of all Christendom
Had rolled along
The unbroken song
Of peace on earth, good-will to men!
Till ringing, singing on its way,
The world revolved from night to day,
A voice, a chime,
A chant sublime
Of peace on earth, good-will to men!
Then from each black, accursed mouth
The cannon thundered in the South,
And with the sound
The carols drowned
Of peace on earth, good-will to men!
It was as if an earthquake rent
The hearth-stones of a continent,
And made forlorn
The households born
Of peace on earth, good-will to men!
And in despair I bowed my head;
"There is no peace on earth," I said;
"For hate is strong,
And mocks the song
Of peace on earth, good-will to men!"
Then pealed the bells more loud and deep:
"God is not dead, nor doth He sleep;
The Wrong shall fail,
The Right prevail,
With peace on earth, good-will to men."
Creating Customer Advocacy requires first and foremost a myopic focus on the customer. Nothing else matters, focus on delivering an exceptional experience every time.
Two it really is best to do one thing really, really well. There are not too many sushi Italian delis for a reason.
Third, great is not good enough. Here others seem to differ, however let’s exam that. The essence of not good enough is to test, measure, implement and improve
The spread of the pride of being associated with a brand that delivers consistently it's brand promise, with a brand that puts them at the heart of the promise, a brand that exists to create value for them....creates the community. A community is a powerful, free salesforce - all it asks for in return for all this wonderful free work they do on your behalf, is to be respected and for you not to break that trust.
Anna’s most salient point is that when you create customer advocacy, your advocates will tell your story with glee to whoever crosses their path. There is an exponential aspect to this type of word of mouth advertising. Over deliver on your promise and you will reap the vast Benefits of Community!
Fast Company’s Chris Dannen article about Entrepreneurship in an entertainment family has implications in your business.
“…entertainers are. But no matter the niche, startup owners have to be almost myopic about preserving the integrity and reliability of their brand. Lose the trust and regard of your customers, and any further efforts your business makes will be laughably disregarded…
…they reinforce each other, compounding the knot of incompetence and rendering each of their brands' values -- and their common brand -- increasingly devoid in value. Rarely does celebrity news have too much to teach the business world, but in this case, take some heed: no one operates in a vacuum, especially a family. And personal life and business are rarely as divorced as anyone would like.”
Chris’ point is that your business is interwoven with your personal life, that of your employees’ and your business partners. Part of the deal that a business makes is to behave in fashion that encourages further interaction. The price of breaking that trust with your customers tends to be insolvency of the brand.
Eternal vigilance is the price to avoid Deconstructing the Brand!
Great organizations have a culture where it is ok for everyone to test recipes, steps of service, menu and marketing placement. Give yourself and your team that freedom.
Test, Measure and Implement!
Execution by Larry Bossidy and Ram Charan advises “listen to tomorrow’s customer.” The myopia that sets in when a concept is flowing is frightening. The restaurateur believes they can do no wrong. They believe that they have it all figured out. They are perfectly in tune with the customer and meeting every need. In this type of mindset the future looks pretty much like the past, so if it is not broke, do not fix it.
Life is non-linear. The past does not predict the future. If you are not listening to tomorrow’s customer, how can you be prepared to meet those needs.
Here is a short list of some must know terms.
• Blogs (short for Web logs) are online journals or diaries hosted on a Web site (you’re reading a blog now).
• Online games include both games played on dedicated game consoles that can be networked and “massively multiplayer” games. These involve thousands of people who interact simultaneously through personal avatars in online worlds that exist independently of any single player’s activity.
• Social networks allow members of specific sites to learn about other members’ skills, talents, knowledge, or preferences. Commercial examples include Facebook and MySpace. Some companies use such systems internally to help identify experts.
• Web services are software systems that make it easier for different systems to communicate with each other automatically to pass information or conduct transactions. A retailer and supplier, for example, might use Web services to communicate over the public Internet and automatically update each other’s inventory systems.
• Widgets are programs that allow access from users’ desktops to Web-based content.
• Mobile marketing is direct cellphone text couponing and personal messaging.
• Collective intelligence refers to any system that attempts to tap the expertise of a group rather than an individual to make decisions. Technologies that contribute to collective intelligence include collaborative publishing and common databases for sharing knowledge.
• Mash-ups are aggregations of content from different online sources to create a new service. An example would be a program that pulls restaurant listings from one site and displays them on a Google map to show where they are located.”
Creating customer advocacy is integrated because there are many ways for your customers to tell others about you. The myriad of social networks offer limitless opportunity for your customers to interact with their friends and with you. It is possible to have your daily specials as a widget that updates the desktops of all subscribers. Smart phones will be Web 2.0 enabled. Online gaming is the fastest growth segment on the planet. Mash-ups are unbelievable,
“If local restaurateurs have their way,
People go out to be with other people and in the company of other people, however when they get there, they are shy! What if a restaurant starts seating complete strangers together at the same table. Yes there are going to be times where you will think this is not a great idea, however in order to grow human beings need to experience new things. It is no different than sitting next to complete stranger on a plane or train. If some authority figure, the host or hostess seats you next to someone, that is more comfortable than you picking a seat next to someone that you think might be interesting.
OK Chicago, starting January 1 every restaurant in the city will have a Communal Table, what do you think?
“This growth is largely driven by consumer demand for convenience, eating on the go or elsewhere off-premise, and the trend toward changing meal-occasions and types.
Ranked as the number one challenge for restaurant operators, recruiting and retaining employees will be an industry priority in 2008 and into the future.
Today’s restaurant customers are more demanding than ever and expect more from their restaurant experiences than great meals.
The cost of food and beverages account for approximately 33 cents of every dollar of restaurant sales and is one of the most critical items on their income statements (along with labor costs, which also represent about one-third of restaurant sales).”The forecast reinforces the need to provide your guest with an exceptional experience every time. Creating customer advocacy is your competitive advantage!
Rent, advertising, decorations, promotions all get paid from the gross margin number. Top line revenue may be glamorous, however never forget everything is context.
Keep those gross margin percentages high!
Aditya’s post “Mantra for Entrepreneurs’ reminds us to just get out there and do it. Forget what the “experts” and well meaning friends tell you, just drill! Do not stop until you find that oil well.
This is so simple it sounds stupid, but it is amazing how few oil people really understand that you only find oil if you drill wells. You may think you're finding it when you're drawing maps and studying logs, but you have to drill. -- John Masters
That's why I said, if you have some idea that you want to start, just drill it. Don't worry about not having related prior experience or competency. Don't worry about the domain knowledge …. There are tons of ways to acquire that knowledge and get started.
“I spent eight or nine straight hours one New Year's Eve on my office phone. I called close to 100 people I worked with…to thank them for their help in the prior year. In addition to enjoying the chats, … I admit that I was purposefully engaging in an ADRE ... Act of Deliberate Relationship Enhancement.
While I fully buy "If you aren't sincere, it won't work," I nonetheless urge you to develop some similar ritual. Moreover, I urge you to do it in the next couple of weeks!”
Creating customer advocacy is about engaging the customer and doing so at a personal level. Restaurateurs have the ability to positively impact that advocacy by making phone calls to your best customers, vendors, even employee’s and thanking them for being the reason for the achievements during the last year.
Go ahead pick up the phone and start a New Years’ Ritual!
"It's remarkable that most restaurants miss out on a golden opportunity by failing to get to know their customers and, using a few simple tools, draw them back to their tables over and over," he says. "Yet, at the same time, they spend money on untargeted advertising that doesn't bring in new or repeat customers and drains their wallet."
Restaurants spend inordinate amounts in a misguided effort to get anyone through the door. The best ROI is always marketing to your best customers and having them create new customers for you.
(hat tip: Lindsay)
“…a convergence program designed to enable single or multiunit restaurant operators to view real-time video of operations, point-of-sale transaction detail, employee time and attendance data, and temperature, weather and traffic information for each location…”
The article focuses on the cash management issues in the restaurant space, however this post is about how integration of surveillance and POS enhances customer service. You have the opportunity to view customer interactions, customer patterns and customer preferences in real time. This functionality enables you to remotely study how different promotions and initiatives translate into sales. This aspect of surveillance integration will yield far more information and translate into substantially more positive cash flow then whether a sale is registered properly.
“Profits aren't cash; they're accounting. And accounting is a lot more creative than you think. You can't pay bills with profits. Actually profits can lull you to sleep. If you pay your bills and your customers don't, it's suddenly business hell. You can make profits without making any money.”Profits aren’t cash. That is the most difficult lesson for restaurateurs to learn. Even after three or four locations, the perception is still that if the restaurant is making “profits”, then everything will be ok. When auditors review your financial record, they do not care what your profits are, all auditors want to see is the cash flow. “follow the cash” is the popular mantra because that is the real lifeblood of the business. Income statements reports on trends in the business, balance sheets detail the actual health of the business. Please take Tim rules to heart, “you can’t pay bills with profits”
Cash Flow Rules!
“I trust the weakest pen more than the strongest memory, and note taking is—in my experience—one of the most important skills for converting excessive information into precise action and follow-up.”
Too often in the mania of day to day we forget what we should remember. Take copious notes and review them at the end of the day when life has settled down to a manageable chaos.
“Influences from the global pantry have also had their effect. More exposure to meze, dim sum, sushi and tapas has changed how Americans think of the structure of a meal. As a result, chefs feel free to break out of the traditional French model of restaurant dining by offering small, intense tastes of global flavors, said Eve Felder, an associate dean at the Culinary Institute of
“It’s more of a reaching back into the way in which people celebrate the table,” she said.”
The reordering of the menu from the hierarchical entrée has implications on the revenue streams and theoretical costs to produce the menu. Those inflows and outflows need to be examined with a fresh perspective.The “go large” mantra appears to be getting moderated by the $1 value menu items, the de-emphasis of the big protein entrée, and the Rise of the Small Plates
The requisite culture is simple, put the customer first, give your front line associates the tools, authority and the responsibility to make every customer experience in your restaurant outstanding. Let them do it.
That is the formula for making every experience outstanding!
“What I can't figure out is why so many decisions are made from panic or desperation, or in the face of an emergency, rather than as a reasonable decision considering the risks and returns. Inertia plays a big part I suppose…Most businesses reward the avoidance of risk and any heroic effort, even if the heroic effort was caused by a lack of decision making. Few businesses reward a good decision that was made with the correct information on a timely basis, so there's really no incentive to make a good decision without additional pressure or an impending problem.”
Restaurants have a well earned reputation for being reactive instead of proactive. Creating customer advocacy is all about meeting the customer’s expectation and exceeding it. That process requires effort and planning. Is your restaurant Rewarding Inertia?
I recommend you invest the time to view the video, buy the book and refer to it often.
“Employers faced with labor shortages will have to welcome the growing number of tattooed candidates with open arms.” … “why let some body art get in the way of hiring the best qualified candidate? A growing number of employers recognize the benefits of diversity in all its forms and are embracing the unique attributes that make people stand out from the crowd.”
Talented, energetic, customer maniacs with tattoos’ want to work for your restaurant. Will you welcome them with open arms or risk them taking their talent to your competitors?
Single tasking, the forgotten middle child of business organization, has returned to vogue. Studies have determined that all the multi-tasking disciples are not more productive than their single tasking brethren. Actually “all the guide books say that should focus on one thing and do that better than anyone else”, with that as a premise it is easy to see how trying to multi-task is not all its crack up to be.
Less is more, forget about multi-tasking and return the serenity of single tasking!
Nelson Schwartz’s article in the NY Times portends the rise of the team oriented leader.
“Now, management experts and longtime watchers of corporate
“It’s someone who can assemble a team that functions as smoothly as a jazz sextet,”
The superstar leader is passé, the new paradigm is the leader who builds teams, who can assemble teams quickly. The successful restaurateur is one who has a team oriented perspective, who values the contributions from employees, who understands that customer advocacy is created when the all the aspects of the operations are executing cohesively. A restaurateur can not pontificate from on high and have his minions scurry about with any expectation that their restaurant will create advocacy.
Long live the Collaborative Leader!