Monday, March 30, 2009

Negative postings.

Martin Brossman has a strategy for dealing with negative posts about your business.

How do you handle a negative posting? Imagine a restaurant owner finding a bad comment on a blog where her restaurant was reviewed. It might read: “I had to wait too long for the food and the server had an attitude!” A good responsive post would be, “I regret that you had anything less then an excellent experience. We are committed to providing great food, at a fair price, with friendly service. If you are ever having a problem, just ask for me or my shift manager.” Give a simple apology, state your commitment, and provide a guideline for future problems.

Sunday, March 29, 2009

The informed customer:

Back in the good old day’s information was power. Today your customer knows more about your business or more precisely the perception of your business than you do. Jeffery Phillips' post about the new marketing mantra is enlightening.

With all the information readily available, what's the new marketing mantra? Well, rather than fear I think it is probably confidence or hope. Rather than encourage people's darkest fears when purchasing, we probably need to play to their goals and the things they want to accomplish. Rather than uncertainty, which has been all but eliminated anyway, we need to communicate the information and value they are seeking. Let the customer find it from us, rather than some third party site. This also means you can't hide your failures but must confront them honestly.

Saturday, March 28, 2009

Performance enhancing caffeine.

Are you feeling blue there Bunky, a little concerned about your ability to take that hill, walk that extra mile or run through that wall?

Gina Kolata's NYTimes report highlights the performance enhancing features of a cup of coffee:

The beneficial effects on exercise, though, remain. Even if you are a regular coffee drinker, if you have a cup of coffee before a workout or a race, you will do better, Dr. Tarnopolsky said. “There is no question about it,” he added.

Help your customers perform better, give them a cup of coffee.

Earth Hour 2009


Friday, March 27, 2009

Pothole adverstising.

In the northern half of the United States where winter is fierce, the roads take a beating with the cold, the corrosive nature of the salt used to melt the snow and ice and the continual thawing and refreezing. The road begins to form potholes, actual holes in the roadway that inflict untold damage on hapless car tires. Municipalities expend substantial sums of tax revenue to maintain the roadways and fill the potholes.

KFC has come up with a creative way to solve the drain on municipal tax coffers. They will pay to fill the pothole, if they are allowed to stencil their logo on the street. The Chicago Tribune reported that:

The fast-food chain has sent off a letter to the nation's mayors, offering to patch their potholes for free. The company will leave behind a stenciled brand on the patch informing people the road has been "Re-Freshed by KFC.

While this story represents word of mouth advertising at its best, personally it is a horrible idea. I detest floor advertising in a grocery store. Allowing advertising on municipal assets is disgusting. First highway billboards, then buses, then bus stops, then cars and now streets.

I fully realize that many a municipality will jump at this because it brings in revenue without taxation, the "fools gold" of politics, however I am steadfast against anymore intrusions by advertising into every aspect our lives.

The shedding has eased.

Dina Berta reports that a study shows the downsizing has eased a bit;

Seventy-one percent of the 111 restaurant companies that participated in an online study by Dallas-based People Report said they were closing units or reducing the number of new openings, but they noted that most of the downsizing has already occurred.

“We interpret the results of this survey to indicate that a lot of the worst misery could be behind us,” said People Report senior analyst Victor Fernandez. “While there are not a lot of operating executives willing to promise any employee that they are not going to lose their jobs in 2009, there is still a note of cautious optimism in these results.”

Any break in these storm clouds is welcomed? Are you ready for the coming boom?

Tuesday, March 24, 2009

Enough with the word stimulus

If you are the one lone restaurant who has not used the word "stimulus" in your marketing efforts, don't. The word no longer sparks any interest. The customers are indifferent to the word. The audience you are hoping to target will not notice your marketing efforts.

Dispel the Myth

Memo to Howard Schultz: It is the Myth!

I did not know whether to cry or laugh when I read the Chicago Tribune story about the Starbucks annual meeting.

Despite a number of moves to reposition his coffee-shop chain, Starbucks Chief Executive Howard Schultz said the company is still seen as a symbol of excess in the downtrodden economy. And he's tired of it.

At the company's 18th annual shareholder meeting in Seattle, Schultz told shareholders he aims to knock down the "myth" that Starbucks coffee costs $4 a cup.

Without myth Starbucks is a commodity and not a good one at that. Myth resonates, people relate to myth, myth creates culture, myth is LIFE. The notion that Howard wants to dispel the myth is absurd at all levels.

Saturday, March 21, 2009

How profitable are your Customers?

Mary Ellen and I were having dinner in our favorite Mexican restaurant when I noticed that every table but ours was having margaritas. I was reminded of the fact the television networks are not in the business of providing programming for the viewers, they are in the business of providing viewers for their advertisers. Same concept applies to sports teams, concerts and most entertainment venues. They are really in the business of selling seats, beer, hot dogs and logo merchandise. Mexican restaurants are really set up to find customers for their margaritas. The food is just a diversion.

That intro brings us right back to the question of how profitable are your customers? If a customer walks in to your Mexican cantina, orders two Diet Cokes which comes with free refills, the free chips and salsa you provide for them will only encourage more free chips and salsa before their meal arrives. An analysis of customer behavior will no doubt reveal that the aforementioned customer is marginally break even and more than likely costs you more to service than you are receiving in revenue. A customer that walks in orders two margaritas before the chips and salsa arrive, and then orders another round of margaritas with dinner is much more profitable than the Diet Coke crowd.

There are two issues at play here, first the challenge would seem to be to find a way to encourage the non alcoholic crowd to purchase the higher margin products on your menu. The challenge of profitably only becomes relevant when you have reached a level of revenue that supports the business. In a perfect world you would only encourage really profitable customers and encourage customers that are less than profitable to change their behavior. The reality is usually different. Less than perfect customers start coming in when you are starting out and you expand a great deal of energy to service these customers because you have not reached break even yet and you do not want to turn anyone away. “Never loses a customer” is my old friend John’s favorite line.

Secondly, the profitability equation takes into account only current activity. It does not incorporate any future value. That is a horrible mistake because remember the purpose of business is to create a customer and have that customer tell others about you. The Diet Coke crowd might only be marginally profitable now however they might be the ones who create the critical mass for your business.

Friday, March 20, 2009


The dark cleansing night of winter has passed. The first light of dawn welcomes Spring.


Thursday, March 19, 2009

Answer to the first question in every joint enterprise

Starting a business by yourself is always the preferable route. The moment more than one person starts a business the question of ownership percentage rears its ugly head in all its myriad forms.

Seth has a post about how to start a conversation about dividing ownership shares

So, my best advice is to say, "Today, right now, your contribution is worth 5% of the company and my creation of the company is worth 5%. The other 90% is based on what each of us does over the next 18 months.

The advice offers a good starting point. The gentile nature of the discussion is interrupted by ownership bias. The person providing the capital values their input very highly relative to other contributors. The person providing the sweat equity values their input highly relative to other contributors. Any future partner providing capital also values their input higher relative to all others in the organization.

All are correct of course. The creation of the idea has a value, the original capital has a value, working for the enterprise has a value and subsequent capital has a value. The situation is usually handled with a even split (if 2 people-50% split) in the initial capitalization, a generic list of which tasks need to be handled by which partner and an opportunity to buy into future capitalization's. If the enterprise is a success no one is ever happy with their share of the profits. If the enterprise fails each partner blames everyone else for the failure.

The incremental ownership percentages that Seth advances are a valuable starting point for the discussion. Bringing up questions and having a binding arbitrator offers valuable pressure values in the business relationship. Entrepreneurs when they start a business rarely think of an exit strategy. Asking and resolving questions up front saves a lot of energy down the road.

Tuesday, March 17, 2009

What is it about Entrepreneurs?

The Economist has a nice piece about Entrepreneurs:

growing body of evidence suggests that entrepreneurs have certain distinctive psychological traits. Noam Wasserman, of HBS, suggests that many entrepreneurs are unusually, sometimes excessively, confident. They are convinced that, against all the odds, they will be able to turn their dream into reality. This sometimes allows them to do something at which most people fail, but it also means they hardly ever hit the forecasts in their business plans.

Rethink Value Creation

Umair Haque pulls no punches

Reconceiving value creation depends on new ideals. Ideals shape what we wish to achieve in the first place: freedom, peace, fairness, justice - all are ideals vastly more powerful than mere business models. That's because they are what ensure the value we are creating is authentic, deep, meaningful value - not just the shabby, threadbare illusion of value.

Any mention in the press is good.

The motives may or may not be altruistic, however you have to like the spunk.

Cara Buckley piece in the New York Times:

All this week, Nino Selimaj is promising free meals to victims of Mr. Madoff at Nino’s 208, on East 58th Street a few blocks from the Lipstick Building, where Mr. Madoff kept offices. To be entitled to the normally pricey grub — $9 daily soups, $19 spaghetti, $25 osso buco — at no charge, people must mention their victimhood when making reservations, then discreetly show the restaurant’s manager a monthly statement from Madoff. Libations are extra.

Sunday, March 15, 2009

Lessons from a Traveling Man.

There is much that traveling can teach someone about life. When you travel from point A to point B, there are always detours that one takes to have lunch or explore the countryside. At first the adventure is alluring, then feelings of dread and self doubt appear as no destination comes into view and the road seems to meander on. The mind creates all of these doomsday scenarios. I have taken a wrong turn. I do not know where I am going. How I will ever make it back to the main road? It is in these moments of dread, in the darkest hallows of our soul that one turns a corner and finds the perfect spot to have lunch.

Being lost is normal. Fear is normal. The belief that one will survive regardless is also normal. Trust the belief whenever you feel lost.

Friday, March 13, 2009

Little perspective:

John Baldoni's article offers a little perspective:

Gain perspective. The magnitude of this recession is unprecedented to anyone born after 1945. Millions of people have lost their jobs and many more will do so. Yet, if the past is any indicator, most companies will survive and new ones will be born. More importantly, we as a people will persevere.

Keep and Change:

Seth’s post drills down to the essentials:

Keep your customers, but change what you sell to them.

Keep your staff, but change what you do.

Keep your customers, but change how much you sell each one.

Tuesday, March 10, 2009

The ability to execute effectively has no rival:

Tim Berry’s post nails the fundamental connection between ideas and execution. Quoting Dr. Kanwal Rekhi:

Execution intelligence. Investors pay a premium for this rare skill. For every great idea that you have, there are 10 very smart people with the same idea. What will make the difference is the ability to execute. Ideas are a dime a dozen.

Customers recognize when your business executes effectively.

I’ll have Decaf:

Really how can you tell? Katherine Harmon article explains

long-standing debate among the caffeine-wary is whether decaf served in restaurants is actually what it's billed to be – or is really a cup of the high-octane stuff. Among the skeptics? Read on.

Do-it-yourself caffeine detectors called D+caf Test Strips will tell you if your beverage is – or isn't – the real thing. Just stick one of the tiny strips into a spoonful of coffee or tea (
sans any milk or sugar, which eliminates drinks like lattes and sodas) and you'll have your answer in less than a minute, according to Discover Testing, which makes the strips. If the line above "D" (decaf) on the strip is darker, you're good to go; if it's darker above the "C" (caffeine), beware – your drink probably contains more caf than you'd like.

Civic pride in Illinois Government:

Chicago is the greatest city in the world and my home. The state government of Illinois has had a lot of issues recently however, they still find time for the really salient challenges of our time. John Matson reports:

Pluto's demotion to the minor leagues spawned heated debate, as well as the requisite protest T-shirts and conspiracy theories. Now it's the subject of legislation in the Illinois Senate, which recently adopted a resolution declaring that Pluto had been unfairly downgraded. As such, lawmakers proclaimed that Pluto is now "reestablished with full planetary status, and that March 13, 2009 be declared 'Pluto Day' in the State of Illinois in honor of the date its discovery was announced in 1930."

Saturday, March 7, 2009

It's Beer Week

When is it ever not Beer Week?

Managing different channels:

I am a huge advocate of embracing the social web. Online presence offers relationship building opportunities like no other, be it a web site, blog, Facebook, Twitter and a variety of niche specific communities. The evolution has occurred so rapidly that many of your customers have not adapted or are lagging.

This was brought into focus for me when Mary Ellen related a story about an experience she had at a quick serve restaurant recently. A customer walked up to the counter and noticed that this location had delivery. The customer asked the counter person, “what is your delivery area?” The counter person replied that “they were not sure but thinking it was 3 miles.” The counter person added, “go online and search for the accurate info.” At this the customer, a mature individual got that glazed look over their eyes, glanced toward Mary Ellen and laughed.

Businesses need to guard themselves against the “gee whiz” of their cool internet channels and remember that everyone is not on those channels. Some people do not text, go online, read informative blogs (like this one) or even fax the order in. Some of your customers just want to use a telephone (how quaint), to call in the order and have you deliver it.

Friday, March 6, 2009

Happy Days are here again, soon!

Stanley Bing’s post “Another week closer to Recovery” reframes the discussion and is the perfect remedy for another week of horrific economic news being deluged on the hapless consumers.

No, but seriously. Every horrendous week that we suffer through this thing brings us closer to the day when everybody will wake up singing. We don’t really know when it’ll be. We will all have to go through a lot to get there. But it will come. And then there will be dancing in the Street and people will start getting jobs again and feeling like they can put their money in a bank without crossing themselves twice.

3 6 9

Early March this year has proved to be a treasure trove for mathematical oddities. Today is 3/6/9. Pi Day is just around the corner

Thursday, March 5, 2009

How to get things done.

Bre Pettis' has created the Cult of Done Manifesto

here is just a few:

There is no editing stage.

Pretending you know what you're doing is almost the same as knowing what you are doing,
so just accept that you know what you're doing even if you don't and do it.

Banish procrastination. If you wait more than a week to get an idea done, abandon it.


Phil Vittel's article offers tips on thriving in any environment.

We know we're not going to come anywhere near having one of our best years," Melman says. "But we can build a foundation for the future with better hiring, better training, better buying. When so many things are out of your control, you have to work on things in your control."

More friends more wealth.

Tom Geoghegan's article encourages us to be friendly.

It's widely accepted that friendships are invaluable to the soul but few of us were aware that they could also boost the bank account.

A study of 10,000 US students over a period of 35 years suggests the wealthiest people are those that had the most friends at school. Each extra schoolfriend added 2% to the salary.

The researchers said this was because the workplace is a social setting and those with the best social skills prosper in management and teamwork.

The best way to make new friends is to smile at people.

Tuesday, March 3, 2009

How have you become more valuable to your Guest?

Martha Lagace's article in HBS Working Knowledge offers guidance

The rule of thumb here is simple: In an economic downturn, consumers consume less of many products. Invariably, this creates the need for substitutes ... at least for some of the most essential products. Another outcome of a drop-off in consumption and employment is a need for products that become more valuable during such periods when consumers have more time on their hands.

Chakravorti goes further and warns against the cost cutting mentality that has so infected businesses,

Think business model, says Chakravorti. Consider the unintended consequences of cost cutting, and instead focus holistically on the interconnected parts of your entire business model.

Happy Square Root Day

There is always a reason to celebrate life. Today is 3 - 3 - 9 which for you lover of numbers out there will immediately realize is 3x3=9.

Monday, March 2, 2009

Demand outstrips supply

Restaurant Week is extended through March 6, so go out and eat it up Chicago!

Sunday, March 1, 2009

How to ask for a referral?

Andy Sernovitz’s tweet makes asking for a referral pretty simple:

Just ask. "I'd be grateful if I can quote your kind words" is how I ask.

Tips for making new friends.

Gretchen Rubin’s post at "The Happiness Project” offers several tips for making friends. Restaurateurs should follow all the tips, however two are listed below.

Show up.


Easy Ice:

Today's tip for all you enterprising servers hoping for a tip. When a guest orders "easy ice" with their initial drink order, it means "easy ice" every time you refill the drink too!

Looking for a good cup of coffee in Milwaukee?

Monica Eng’s article lists the best bet for a cup of joe in your town:

in Milwaukee it’s Alterra Coffee (