Contrast:

Robert Cialdini’s book “Influence, The Psychology of Persuasion”” offers a primer on the contrast principle.

“Sell the expensive item first then sell the accessories…if they buy a shirt first they may not buy the suit, but if they buy the suit first they will most certainly buy the shirt”

Patrick Williams of The Selling Sherpa advises “Start at The Top”

“…when people ask your price, start at the top. Trust me, if they can’t afford it, they’ll let you know. But what if they can afford it and you don’t offer it?

Starting at the top rung of your price ladder also discourages those who would make a buying decision based solely on price, and shoppers rarely become your most profitable customers.”

Seth Godin post on “Triangulation” highlights the contrast principle brilliantly,

There are two wines for sale at dinner: $9 a bottle or $16 a bottle. Which one do you order?

Now, imagine that there are three, and the third is $34. Are you more likely to buy the $16 bottle now? Most people are.”

Restaurateurs as a group have this aversion to asking top price for their offerings, why? Perceived value is a concept that relies totally on the contrast principle. A guest perception of a restaurant is influenced by their experience at other restaurants and their price points. You do not want to be the lowest price provider period.

Put the expensive items on the top of the menu. The principle of leading with your high cost, high margin items and relegating low cost, thin margin items to the least noticeable place on the menu is valid and workable. If they buy the Château Briand , they will buy sides, dessert and a bottle of wine. If they buy hamburger, they will not order sides and have water with their meal. Highlight the Chateau Briand

Restaurateurs will be pleasantly surprised when they apply the principle of Contrast!

Wham! Bam! Thank you!

Brand Autopsy post “Pick up Lines Don’t Work” offers some clear insight into how to build customer advocacy. (paraphrasing a bit)

“Restaurateurs need to stop delivering clever pick-up lines to customers and instead, start building a connection with customers.

It is not enough for a customer to be attracted to a brand. The customer must become invested in the conversation because the more time a customer spends interacting with a brand, the more likely that customers will want to begin a transactional relationship.

My advice? Be playful, be challenging, and be unpredictably predictable.

Be a playful brand. Customers do not want their brands to take themselves too serious.

Be a challenging brand. Customers want to tango, they want a give and take relationship and not one-sided take relationship.

Be a predictably unpredictable brand. Customers are turned off by complacent brands. They value brands that are willing to take calculated risks.

Keeping a customer involved in a transactional relationship is an on-going process. You cannot keep a customer on-the-shelf and simply use them whenever you need a sale. No. Customers need attention, love, cuddling, etc.”

The key that you should focus on is that the relationship is an ongoing process. To often restaurants take their guests for granted and assuming incorrectly that the guest does not need attention, the menu does not need revamping, the space does not need to be revitalized.

Customer Advocacy is a long term relationship and not a one night stand, Wham! Bam! Thank you!

One is not a Lonely Number:

Entrepreneur.com highlights the rise of One Item restaurants:

"They say one is the loneliest number, but judging by the growing number of specialty restaurants, going solo can draw a crowd. Some restaurants and food vendors are taking simple items like hummus, Belgian fries, crepes and even cereal and creating a menu based solely on them. Often, these specialty food stops feature nostalgic favorites or indulgences you simply can't pass up.

One classic making a comeback is macaroni and cheese. "We draw crowds from age 1 to 100," says Sarita Ekya, co-founder of S'Mac in New York City. "We've hooked a lot of people simply through word-of-mouth."

Less is more, sorry for the clichés, however simple is definitely better. One of the ways to get very good is to do only one thing and do it better than anyone else. Chipotle has built a brand on a very simple two item menu.

You might have an item on your menu right now that outsells everything else, or that your guests constantly talk about? Have you ever thought of spinning that item off into its own concept. The article stresses how word of mouth has spread about these locations. Customer advocacy is being created by doing one thing well.

Pizza, cereal, mac and chesse, cheesesteaks and a variety of other items are all proving that One is not a Lonely Number!

Show Time:

Patrick Williams at the Selling Sherpa Blog hit it dead on in his post when he stated:

“When it’s time to open the doors, its time to put away the personal issues and put on a show. Disney theme-park employees understand this concept very well. Outside sales professionals should also adopt this philosophy.

Anytime you are in front of the customer, they should see nothing but a professional presentation, regardless of what is going on behind the scenes.

Even when you are having a “bad day”, the show must go on. Maintain a professional demeanor at all times because you never know when you might be auditioning in front of a future prospect.

When you walk into a restaurant, you are there to resolve an issue, not to solve the staff's problems. The sooner a restaurateur understands that, the faster the restaurant will create customer advocacy. Restaurants are exactly like theater, a patron would be very annoyed if during the play the actors stepped out of character and started dealing with their own personal problems. The audience would walk out. The same thing will happen in your restaurant.

Remember when the door opens, it is Show Time!

Move in Day:

The inspectors have completed their examinations and you have passed. The furniture is in place. The paint is dry. It is move in day. You’re elated to finally bring perishable product into the space. This will be one of the happiest day’s in your business life.

The long struggle of the build out is behind you, no more contractors until the next project. The sucking sound in your checking account will ease a bit. Do not get accustomed to that. Operations can be just as challenging as a build out, but it is challenges that you signed up for. Opening a restaurant, you had no idea you had to become a contractor for six months to a year. Ahead of you lies the joy of operating a restaurant, personnel issues, menu challenges, customer service and the hope of customer advocacy.

Here comes the first truckload of produce, yes it is Move in Day!

80/20 Rule:

Wikipedia describes the 80/20 rule as:

“for many events, 80% of the effects comes from 20% of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. It is a common rule of thumb in business; e.g., "80% of your sales comes from 20% of your clients."

Gassner Company website refers to it as the “only logic rule that millions of people rely on to help separate the "vital few" from the "useful many" in their activities”

The positivity blog does a nice job of enlightening the path by stating:

“So, focus your time and energy on those important 20% of tasks and activities that will give you 80% of the results.”

The rule has endured because it is useful across a wide variety of applications.

80% of your restaurant sales come from 20% of your customers, drill down even further and 64% of your sales comes form 4% of your customers. Identify those 4% immediately. Market to them and sell them more of the products and services they are buying. The process of creating customer advocacy finds fulfilment in this 4-20% grouping.

The legendary Jack Welch of GE fame had a revision of this rule with his 20/70/10. Jack believes that 80% of our revenue comes from 20 percent of our staff. The remaining net 20% comes from 70% of your staff, with the last 10% actually losing money for you and netting out the surplus from the 70%. That is why you need to regularly prune the poorest performing 10% of your staff, your customers, and your suppliers.

20% of the time that you spend working on a project produces 80% of the results. Time management is very important to a harried restaurateur, hence the overriding importance of prioritizing. Review your daily routine and ask yourself, is this the best use of my time? If it is not then delegate duties to others.

One of the most useful rules in business is the 80/20 Rule!

Understand your Competition:

The secret to selling is to understand your competition. If your competition offerings are in the aggregate better than yours, than why are you selling your products and services? When a customer comes into your restaurant to order corporate catering are you prepared to highlight your offerings in comparison to your competitors? You should be, you should be prepared to offer your customer more information about your competitor, than the customer would be able to obtain on their own.

In the wonderful movie Miracle on 34^th Street, the Macy’s Santa sends a customer to Gimbel’s because they have the product the customer wants. When a guest, friend, future customer advocate, or citizen marketer walks into your restaurant you must be prepared to satisfy whatever need they present. At times that need can only be satisfied by one of your competitors. For you to know that requires that you Understand your Competition!

The Dark Side:

Web 2.0 is a wondrous thing. It enables Wiki models of collaboration in a myriad of guises. RSS feeds of the collective wisdom of some of the most innovative thinkers on the planet happen daily in your Goggle Reader. You as an entrepreneur are able to broadcast your story to billions of people at virtually no cost. Web 2.0 allows this humble blog to be created and you to read it. Truly Web 2.0 is a wondrous thing.

There is a Dark Side however. A recent NY Times article “Dealing With Damage from Online Critics” highlights part of the problem:

“As the power of the Internet grows, businesses small and large find themselves confounded by disenchanted employees, suppliers and competitors who seek fertile ground to air grievances online.

Armed with little more than a Web connection and a keyboard, these detractors can do everything from irritate, via a scathing review, to causing serious business problems by using message boards to reveal company secrets or spread rumors of unethical behavior. They may also start a gripe site or register a Web address in their target’s name.

“There is all type of damage by miscreants on the Web to a business,” said Marc S. Friedman, chairman of the intellectual property practice at Sills Cummis Epstein & Gross in Manhattan. “The number of methods depends only on the creativity of the wrongdoer.”

A multitude of sites such as Yelp, Zagat, and Yahoo among others allow anyone with an internet connection to review a restaurant experience. The change here is that if you had a bad experience you would share that experience with the manager and allow them to correct the situation. Now one simply publishes their views online with no interaction with the restaurant. There are many cases of legitimate grievances that are handled in this fashion and restaurants need to adjust their responses to deal with it.

The real danger and the Dark Side that this posting is about is the nefarious grievances. Someone can post a story about your restaurant that is an outright fabrication, and because of the internet, the fabrication could spread worldwide before you as a restaurateur are even aware of its existence. It is this Black Swan that poses the greatest danger. While you sleep, the world’s view of your humble little enterprise could be totally miscast. The damage can be irreparable and your recourse is limited. Sadly people will notice a negative view far more than they will notice a positive truth. I put the question out there, how can you protect yourself? At a minimum, restaurants need to Google themselves daily to discover what might be out there.

Web 2.0 is a wondrous thing, however there most definitely is a Dark Side

The Story You Want To Tell:

Every restaurateur wants to tell a story. The story is crafted by the design of the space, the character of the furnishings, the quality of food, the warmth of the service and the overall feel of the experience. Restaurateurs believe they can guide their guest smoothly done this path. They further believe that the story they tell will be comprehended in the manner in which it was fashioned. Nothing could be further from the truth.

One never knows where a guest will enter the story and how the story will be perceived. Touchpoints are important here because the story must be authentic at all touchpoints. The telephone or online reservation, the hostess, the server, the space, the food and drinks, the valet, the physical plant, the coat check must all convey the same story.

When touchpoints are not synchronized, then the guests might not hear The Story You Want To Tell!

Celebrate:

Today is the one hundredth post of this humble blog, it is time to Celebrate!

Every day someone is celebrating somewhere. Every day that the restaurant is open is a reason to celebrate. If you need other reasons to celebrate something today in your restaurant, click on the link:

Earth Calendar

Thank you for visiting, commenting, sharing and creating customer advocacy!

Celebrate!

Some Like It Hot!

Sacha Pfeiffer’s Boston Globe article Some Like IT Hot explains the spicy trend in foods is because aging boomers are losing their olfactory senses.

“In the restaurant business, that change is well underway. Thirty-five percent of all chain and white-tablecloth restaurants mentioned the word "spicy" on their menus a decade ago; by last year that number had risen to 54 percent, according to MenuMine”….

…Chiefly because of degenerating olfactory nerves, most aging people experience a diminished sense of taste, whether they realize it or not. But unlike previous generations, the nation's 80 million boomers have broad appetites, a full set of teeth, and the spending power to shape the entire food market.”

Tyler Cowen at the Marginal Revolution blog has a different take.

“Spicy foods are addictive. Most importantly, spicy ethnic food is often better than what we had before, which indeed was usually horrible.”

Clearly the introduction of geographically diverse foods into the American diet has spice things up. Chili peppers in New Mexico, hot sauce in Louisiana, red pepper on pizza, cayenne on meats used to provide a little spice. Those are no longer enough.

It would seem that many, not just Some Like It Hot!

Over Deliver on Promises:

John Moore’s excellent book Tribal Knowledge, Tribal Truth #21

“When businesses follow through on the promises they’ve made to their customers, they’re displaying an integrity that’s necessary to building trust between customers and the brand; and they’re also showing a pride in the work they do—the products they make and the services they deliver. Ultimately, how a company follows through on its promises is more a reflection of who that company is and its reason for existing than anything else.

But delivering on promises is not enough today. Businesses, big or small, must find ways to over-deliver on their promises, implied and expressly stated, to customers. That means exceeding the usual expectations and going beyond the minimum corporate standard.”

How simple is this, the way to create customer advocacy is to Over Deliver on Promises!

99 Seasons:

The Chicago Cubs are on the verge of the extraordinary. Having been eliminated Saturday they have now gone 99 seasons since winning their last championship in 1908. One would think the law of averages would work in their favor, it has not. Everyone in Chicago was concerned that the Cubs might spoil the Hundredth year party next year by winning it all this year. Thankfully that did not happen. The universe however likes all things to tend toward equilibrium. A team’s postseason success tends to benefit sports bars and neighborhood taps at the expense of sit down casual and fine dining restaurants. The effect is also felt by other entertainment venues such as, movies, art openings and cultural events. If your team is making a run, the citizenry tend to rally around the team, eat lots of pizza, burgers, nachos, chili, hot dogs etc. and forget about finer points of pasta, seafood, salads and culture.

Now thankfully restaurant activity can get back to normal, without the disruption of a World Championship run, just like its been for 99 Seasons!

Is Everything OK?

A manager or server sheepishly approaches the table after the meal has been served and asks Is Everything OK? Why ask that question? Does not that question presuppose that something might be amiss? A restaurateur should have no doubt about the meal that she presents to her guests. I admit a bias, that question gets my skin crawling, because there is no better time to create customer advocacy and a billion times a day that opportunity is wasted. The guest will tell you if everything is not ok. Focus on the positive, start a conversation.

A better approach is:

Hello my name is Alexandria and I am the proprietor?

Congratulations Jane on that new promotion!

When people smile it brightens up the restaurant, Thank you.

May I offer you another glass of wine?

The spices in the meat were just right tonight, what do you think?

The chef is proud of the Butternut Squash Ravioli.

The Merlot is perfect with that pasta.

Accentuate the positive, engage the guest and do not ask Is Everything OK?

Cooperate or Perish:

Cheryl Jackson’ s Sun Times article on independent restaurants highlights the creative ways that are available to help market your establishment. The Chicago Originals website offers the following:

“The ChicagoOriginals exists to promote dining in local independent area restaurants, to provide diners with a unique local flavor and to raise awareness of independent restaurants in Chicago and its suburbs.”

Independents in many industries have always aligned themselves with each other to increase their buying power and marketing strength. Given that these restaurateurs have aligned a marketing strategy, what other business alignments are possible?

Independents need to find ways to Cooperate or Perish!

Holiday Gift Giving:

Ahaaaaa, the holiday season is in full gear. Most restaurant management teams have mapped out strategy to maximize the revenue this season. Corporate Catering and Private Dining Managers are out in force with brochures in hand, hoping to land the big holiday party. Along with the planning of how to book parties, a sidebar discussion about what and when to give the best customers as gifts sprouts up. Usually the dialogue goes something like this, “we’ll put together gift baskets of goodies and deliver it the Thursday before Christmas because everyone takes the Friday before Christmas off”. That is an excellent strategy to make no impact at all. The gift if it is acknowledged at all will soon be lost among the hustle and bustle.

Holiday gift giving is actually a golden opportunity to create customer advocacy and cross market a variety of your products (i.e. gift cards, delivery services, curb side pick up, private dining etc). The best time to deliver gifts to your best customers is the Friday before Thanksgiving. The timing has two distinctive advantages

1) You will stand out from the other restaurants, because they will remember your unexpected early gift. There is more time to talk to your contact and discover what other needs your restaurant might be able to fill. There is more time to get honest feedback from your customer about your performance to date and what improvements they might want to see implemented.

2) Your restaurant has all kinds of services that your customer might not know you provide. The gift visit is an excellent time to educate your customer and pick up some new business between now and the end of the year. Gifts given just before Christmas rarely result in new business because the customer has already spent their holiday dollars.

What benefits will you accrue if you reinvent your Holiday Gift Giving?

Set Your Own Price:

The band Radiohead has set the marketing world abuzz by offering music and allowing the consumer to set the price. Would such an idea flourish in the restaurant space? A first pass would yield an unqualified NO! The cost to create the music is the original investment. The distribution cost using the internet is virtually nothing. Restaurants have a huge upfront capital investment and the distribution cost is the ongoing operating expenses (i.e. labor, COGS, occupancy and a host of direct and indirect expenses). The idea would seem to have no relevance whatsoever to discussions involving restaurants.

Ignore the economics for moment and consider the dynamics of a marketplace. You the entrepreneur create value, whether a product or service and then decide on a pricing strategy for the marketplace in which you operate. To a very large degree you are surrendering yourself to that marketplace. The marketplace decides whether to purchase your product or not. You make adjustments in your price if the marketplace gives you indications that your pricing strategy is flawed (i.e. no one visits your restaurant). Allowing the guest to set the price, thus creating the equilibrium in the supply demand equation, would seem to be the logical destination for that strategy.

The Internet has created an auction economy where information is readily available and consumers make pricing decisions. That information has shifted the balance power from the producer to the consumer. Producers as a group no longer have the pricing power that they once enjoyed.

“Discussion in Theoretical Economics is always fascinating” you might be saying to yourself, “yet there is no way I can operate a restaurant with the hope that my guest will pay the correct price for my menu”. There is to my knowledge no restaurant that allows the guest to set the price today. There used to be very few restaurants that would let the guest have a menu item prepared their way. That has changed.

Let me know what you think, however the day is coming quickly when the guest will Set their Own Price!

Ambiguity:

Marc Andreesson’s post “Guide to Career Planning” offers some solid advice on dealing with ambiguity in your business

“In my opinion, it's now critically important to get into the real world and really challenge yourself -- expose yourself to risk -- put yourself in situations where you will succeed or fail by your own decisions and actions, and where that success or failure will be highly visible.

…If you're going to be a high achiever, you're going to be in lots of situations where you're going to be quickly making decisions in the presence of incomplete or incorrect information, under intense time pressure, and often under intense political pressure. You're going to screw up -- frequently -- and the screwups will have serious consequences, and you'll feel incredibly stupid every time. It can't faze you -- you have to be able to just get right back up and keep on going.

That may be the most valuable skill you can ever learn. Make sure you start learning it early.”

The single best indicator of success in entrepreneurship is the ability to deal comfortably with ambiguity. Restaurants are a daily exercise in ambiguity!

October Sky:

Top Five Chicago Pizza’s

When you are next in Chicago, you must visit one of these pizza sanctuaries. They have created customer advocacy in their own way

1) Edwardo’s

2) Burt’s Place

3) Pequod’s

4) Gino’s East

5) Caffe Baci

Pizza is Nature’s most perfect food. Pizza is Life. Pizza is great anytime especially under an October Sky!