Archive for the ‘Restaurant Turnaround Management’ Category

A New Perspective on Special Offers in the Restaurant

July 24, 2013

Providing special offers such as ‘daily deals’ and ‘happy hours’ in the restaurant is nothing new. That said, creation and participation in such programs can be a rather costly affair. As a result, an increasing number of chain and independent restaurants alike have been creating, managing, and posting their own special offers and coupons on their websites and utilizing the new technology that is available as a cost-effective means of stimulating more visits from their best customers.

Giving Your Best Restaurant Customers Exclusive Benefits

The general rule of thumb is that 80% of your restaurant’s business comes from about 20% of your customers. Therefore, it makes sense to do everything within your power to reward that 20% for their patronage. While it’s smart to have regular coupons posted on your website which any consumer can use, it’s even smarter to provide exclusive coupons and offers to your most loyal customers.

Typically, this is done through the creation of membership programs or the joining of exclusive mailing lists. A recent study by LoyaltyPulse shows that 77% of participants feel that the most important feature of a loyalty program would be earning points toward free or discounted meals. Another 70% said they would like to receive unexpected benefits in the restaurant, such as receiving a free appetizer or dessert. Special birthday coupons were in high demand for 72% of participants, and an additional 58% wanted holiday coupons and discounts for trying new menu items. More that 50% said that being the recipient of exclusive offers unavailable to non-members was their primary motivator for joining.

Cause-related marketing is also powerful and using the technology that is available would allow you to easily set up a system in which you donate x% of a customer’s bill toward the charity of their choice. Additional examples of exclusive membership rewards include offering a certain percentage off their ticket during their entire birthday month or even year-round discounts for members!

Tailoring Your Special Offers to the Unique Tastes of Each Customer

With the technology that we have available to us, it is easier than ever to create highly customized, special offers unique to each customer. For example, if a customer never orders dessert when they visit your restaurant, it’s useless to send them a coupon for discounted dessert!

Instead, it is far more powerful to send that customer a coupon for a meal or food item that they regularly order when they visit your establishment. Not only does this increase the likelihood that they will actually use the coupon, but it demonstrates that you are really paying attention to what they like and are doing everything within your power to reward them for giving you their business.

Utilizing Technology to Track and Retain Customers

Aside from allowing you to really customize coupon deals, using technology to track your customers’ behavior also tells you important information such as how frequently they come to your restaurant. This is useful because if a customer who normally comes in once a week hasn’t shown up for three weeks straight, you can set up the system to automatically generate, say, a 10% off coupon to be delivered to their in-box, encouraging them to return.

The take-away message here is that it is critical to look for creative ways to engage and exclusively reward your most loyal customers. With the technology that we now have available to us, this is a task that is easier than ever to do.

Restaurants and Social Media: Responding to Negative Commentary

July 17, 2013

It’s a fact of life that as a restaurant owner, you’re occasionally going to get an unhappy customer. Unfortunately, in today’s age of social media and online connection, that customer’s negative commentary has the potential to do a lot more damage to your business’s reputation than it ever had in the past. Therefore, learning how to address negative commentary on social media properly is more important than ever.

Having a Social Media Presence for Your Restaurant is Critical, and Encouraging Commentary Is Key

With more than 65% of online adults using social media forums such as Facebook, it would be foolhardy not to create a social media presence for your restaurant. In fact, many restaurants have vastly increased their traffic and customer loyalty through social media campaigns.

Social media presents an incredible opportunity to engage and communicate with your customers, and you certainly want to encourage commentary as much as possible. That said, how you respond to the occasional negative comment that pops up can end up having far-reaching retributions which you may not have considered.

What not to Say When Responding to Negative Feedback about Your Restaurant

The worst thing you could possibly do when responding to negative feedback is to get into an argument or tell the person that they are wrong. Remember, everything you say online is broadcast to the whole world, and once it’s said, it can’t be taken back – it’s forever there for potential future customers to see.

Therefore, it’s crucial to be as professional and diplomatic as possible in all of your online communications. If someone voices a problem, the best thing you can do is thank them for alerting you to the issue and assure them that you will look into it. Apologies are appropriate, denial and excuses are not. The old adage applies here as well – if you can’t say something nice, don’t say anything at all!

Learn to See Negative Commentary about Your Restaurant as an Opportunity

While it may seem counter-intuitive, negative commentary can actually represent an opportunity for you to build relationships with your consumer-base and demonstrate your commitment to creating a quality experience and furthering goodwill. While you might be tempted to simply delete a negative comment, doing so creates a lop-sided conversation that is suspect to your viewers. In some ways, people actually pay more attention to how you respond to negative feedback than they do to the feedback itself.

Allowing the comment to stay and demonstrating how you respond to such feedback shows your followers that you are a real person who sincerely cares about your customer’s experience and that you are comfortable enough with the quality of the service you provide not to be threatened by receiving feedback that may be tough to hear.

Social media truly does have the power to make or break your restaurant’s reputation, and while it can be a powerful tool to build your customer base, it can also be a highly damaging medium if you don’t handle it correctly. Taking the time to respond with sincere, professional responses that demonstrate your commitment to excellence can go a long way toward building the reputation you truly want your establishment to have.

3 Reasons Why Your Restaurant Could Benefit from Turnaround Management

July 3, 2013

Success in the restaurant business can often feel like quite the balancing act to achieve. Sometimes, even the most successful business person can use a hand to maximize efficiency, profits, and improve the bottom line. That’s where the services of a restaurant turnaround management company come in. Following are just three of the many areas in which such a company can provide invaluable assistance to help set your restaurant back on the path to success.

Turnaround Management Offers Restaurant Assessment Services

There are a lot of factors that a restaurant owner has to consider in order to determine the overall success of the business. With so many areas to consider, it is easy to overlook a ‘leak’ in the system that is causing the entire operation to falter. Sometimes it’s helpful to have someone come in and take a detailed look at each area of operation in order to clearly see what is working and what isn’t.

A thorough assessment includes analysis of everything from overall operations to your marketing, brand positioning, safety and risk management, menu options, and finances. Generating a detailed report of each of these areas can be invaluable in determining what is working well, what isn’t working so well, and what the next best step to take truly is.

The Logical Step after Assessment is Restaurant Consulting Services

While sometimes a simple assessment provides enough information to make the change that is needed, other times it is nice to receive the logical next step – which is having someone provide suggestions about how to fix the areas that are performing poorly. Turnaround management companies specialize in providing only as much assistance as is asked for, so you can just get an assessment and call it good, but you can also opt to receive consulting services and savvy suggestions for how to improve.

Turnaround Management to Assist the Financial End of Restaurant Success

If your restaurant is in trouble financially, utilizing the services of a turnaround management company can be your saving grace. From providing due diligence lender and acquisition services to being your court appointed receiver, bankruptcy industry adviser, examiner, and trustee, turnaround management companies typically provide full scale financial assistance services. This also includes borrower analytics in which a lender would like more information prior to negotiating concession.

Obviously, if you’re a restaurant owner, it’s critical to utilize a turnaround management company staffed with people who truly know and understand the restaurant industry. Managing a successful restaurant takes a specialized skill set and requires unique considerations which differ from other types of businesses. Therefore, you want to be working with restaurant professionals who have very specific areas of expertise – ranging from culinary operations to financial reporting and profitability. You want a team who is able to deliver specialized results from the top down or from the bottom up and obviously, you want to work with people who can provide the necessary guidance to achieve real results.

If your restaurant is struggling in any way or even if you simply want to make sure that things are running as smoothly and efficiently as possible, utilizing the services of a restaurant turnaround management company is the smartest way to go.

Restaurants can Expect Beef Prices to Continue to Rise

June 24, 2013

According to the U.S. Department of Agriculture, beef prices have hit an all-time high – topping the record set in 2003 at more than $2.11 per pound for choice grade beef. While this is a record in dollar value, when adjusted for inflation the number isn’t quite so startling. These prices represent a long-term sustained inflation on beef and veal prices that won’t end any time soon.

Factors Influencing Rising Beef Costs

There are a number of factors that have been contributing to the rising cost of beef over the last several years. The most obvious is the unusual weather patterns that have affected the ability of farmers and ranchers to be able to provide enough feed for their herds. Sustained drought last year made the production of corn difficult. It also caused many ranchers to sell their cattle because they couldn’t come up with enough grass or water on their land to sustain the herd.

This year the opposite problem is occurring in many parts of the Corn Belt, wherein they are getting too much rain to get the crop planted. The fact that many ranchers have been forced to significantly reduce their herd numbers, or worse, sell out completely, has also contributed to the rising cost of beef, as quite simply, there is no longer as much beef on the market as there used to be.

Given that it takes about two years for a cow to be old enough to go to market, it will take ranchers some time to be able to build their numbers up again, assuming weather and economic conditions permit the ability to do so. As a result, the cost of beef is projected to continue its rise well through 2016.

What Rising Beef Costs Means for Restaurants

A major issue for restaurants is the fact that their menu prices aren’t rising in-step with the increasing cost of beef. As a result, profit margins are much thinner than they once were. This puts restaurant owners in a tough position, given the fact that increasing your establishment’s menu prices typically doesn’t go over well with your consumer base. As a result, restaurateurs are having to get creative to make up the difference in other ways.

How Restaurants are Managing Rising Beef Costs

One obvious way to deal with the rising cost of beef is to simply rely more heavily on alternative protein sources such as chicken or pork, which are typically much cheaper than beef and veal. Aggressively promoting these menu options allows a restaurant to keep menu prices fixed while still receiving a decent profit margin.

Choosing less expensive cuts of beef is another option some restaurants are resorting to in order to close margins without increasing menu prices. Working with beef suppliers to ensure that the measurement specs for a cut of beef are as accurate as possible and looking for other ways to reduce cost such as eliminating packaging are methods that are also helping restaurants address the inflating cost of beef.

One positive in all of this is that the higher cost of beef is tempering its demand, which ultimately will help bring things back into balance. Until the time at which beef prices level out again, however, restaurants are going to have to keep looking for creative strategies to manage the rising cost of America’s favorite meat.

Why Developing Your Virgin Cocktail Menu is Good for Business

June 19, 2013

The demand for a well-crafted cocktail has seen a resurgence over the last few years and has restored some of the honor and respect that a good bartender deserves. While having a distinctive cocktail menu can do a lot to set your restaurant apart from the crowd, having a well-developed virgin cocktail menu can do as much or more for your business. Here’s why.

‘Mocktails’ are Sadly Missing from many Restaurant Menus

The biggest reason that it’s smart to develop your virgin cocktail, or ‘mocktail’, menu is quite simply because there aren’t a whole lot of restaurants doing it. When it comes to virgin drink options many customers are stuck with club soda and cranberry juice as the extent of their choices, so it’s no surprise that their eyes light up when they discover that they too can get the same delicious drink options as their alcohol-drinking counterparts. 

Virgin Cocktails Appeal to a more Diverse Crowd, Equaling more Money for You

The second obvious reason it’s a savvy move to vamp up your virgin cocktail drink menu is the fact that you can then appeal to a more diverse crowd of customers – which, in turn, means more money coming into your establishment. It’s a well known fact that people who are ordering drinks end up creating a higher tab.

It’s also not uncommon for tables who are ordering drinks to get better service from the waitstaff than those who are not. Having mocktails on the menu means that customers who are underage or are simply not interested in consuming alcohol are not relegated to having only boring drink options.

Instead, they too can enjoy the treat of having the palette-pleasing variety that cocktails have to offer. This also helps them feel more included if they are among alcohol drinkers and gives them the added benefit of receiving the more attentive customer service that alcohol drinkers tend to get.

Cocktails are an Opportunity to Show off Your Quality Ingredients and Classy Taste

The final reason why it’s smart to develop both your cocktail and mocktail menus alike lies in the opportunity that cocktails are a way to show off a well-developed palette and the use of classy, high-quality ingredients. Instead of relying on your big soda houses for your carbonated options, scout out the beautifully crafted tonics and sodas that are lower in sugar and offer more unique flavor combinations. When developing your cocktail menu, stay in communication with your savory and pastry chefs so that you can utilize the fresh fruit, herbs, and spices stored in their pantries.

Finally, make sure that several of your cocktail options can then be converted into virgin versions that are equally tasty.

Developing a signature cocktail menu is an easy way to set your establishment apart from the crowd and adding virgin cocktail options to the mix distinguishes your business that much more. Doing so is a simple way to extend your hospitality to your non-drinking consumers while significantly increasing the average tab per customer in a way that feels truly special and distinctive.

What Restaurants should know about Appealing to Generational Differences

June 14, 2013

Most restaurants hope to attract customers of every age and generation. That said, appealing to people of all ages requires appealing to a vast variety of different values and expectations. Given that the restaurant industry is only expected to grow some 4% over the course of the next ten years, it’s critical to reexamine generational differences and shift your marketing tactics accordingly in order to find opportunities for growth.

What Restaurants should know about Appealing to the Millennial Generation

Millennials are born between 1977 and 1992. As of 2013, they are between 20-35 years old. Numbering more than 68 million people, this is the group that has been hardest hit by the recession with more than 16% of those under the age of 25 unemployed. As a result, more than 40% reported cutting back on eating out due to financial reasons. Given that this group was historically one of the strongest patrons of the restaurant industry, this represents a significant loss and finding ways to bring them back into your establishment is crucial.

Fortunately, appealing to the Millennial generation can be done fairly easily. Not surprisingly, they are drawn to deals, coupons, and discounts more than any other group. They also respond very well to happy hours and home delivery options and are more likely to choose locally-owned, independent, sit-down restaurants than any other age group. They grew up with the Internet and are most likely to use all forms of technology to research and connect with restaurants.

What Restaurants need to know about Appealing to Generation X

Gen-Xers were born between 1966 and 1976 and as of 2013, are between 36-46 years old. Nearly 90% of this generation is employed. This is the group that is most likely to have children at home and be squarely in the midst of trying to balance work and family life. As a result, they now frequent restaurants more than Millennials and are big users of take-out food.

Time and efficiency is important to this group, as is spending quality time with their kids. As a result, providing easy, convenient, kid-friendly options in your restaurant with minimal wait times is what is going to appeal to this generation the most. The hallmark of Generation X is pragmatism and practicality, so marketing messages that are straight-forward and direct are what will resonate with this generation.

What Restaurants should know about Appealing to the Baby Boomer Generation

Baby Boomers are those individuals born between 1946-1965, and will be between the ages of 47-66 as of 2013. With over 82 million people, this is the largest generation with the biggest buying power. Consumers in this generation tend to spend more per visit than younger generations and have a much higher per capita visit rate. This group tends to place a larger emphasis on having healthy eating options, and they don’t think they should have to pay more for those options. Value to the Boomer generation means things like fresh, high-quality ingredients and the ability to have choices such as portion size, substitutions, etc.

Baby Boomers are more tech-savvy than they often get credit for, and are more than capable of utilizing the web to research and evaluate restaurants prior to visiting, so it’s important to keep your website up to date with your most current specials and promotions.

While there are similarities between the values of the different generations, there are key differences as well that are important to keep in mind when designing your marketing messages. The ideal is to find the sweet spot between catering to the values of the individual group while still meeting the needs of every generation who might walk through your door.

Building Restaurant Customer Loyalty by Learning to Really Listen

June 10, 2013

As a restaurateur, you already know how important it is to deliver an experience that your customers want if you hope to have them return to your establishment – let alone recommend your business to others. One of the simplest ways to ensure that you are meeting and exceeding their expectations is, quite simply, to ask for feedback. That said, just asking for general feedback isn’t enough – you’ve also got to ask the right questions, ask in the right way, and act on the information you get.

Ask Your Customers Questions that Really Matter

Learning to ask the right questions of your customers makes all the difference in the world when it comes to getting truly useful feedback about improving their customer experience. Many restaurants make the mistake of asking only questions that are designed to help them better understand their customers’ habits rather than questions that help them understand how they could improve their experience.

For example, while it may be useful to know how often your customers eat out or where they tend to go, it is more instructive to ask questions about how you could improve their experience with your establishment or what you could do to entice them to return more frequently.

Provide Multiple Avenues for Constructive Feedback

Not everyone is comfortable providing honest feedback on the spot. Therefore, it’s smart to provide multiple avenues for customers to tell you how they are feeling. Whether this comes in the form of feedback boxes on a customer’s check, social media pages where they can post their feelings, or simply hospitality ambassadors whose sole job is to make the rounds while people eat to make sure that everything is up to par, you want to provide multiple avenues for people to talk to you.

You want to encourage honesty and breed a constructive environment through which you can gain information. Rewarding your employees who get great feedback is a part of this process too – the more that people can see the tangible effects of their efforts, the more likely they are to continue their good work.

Close the Feedback Loop by Taking Action

Last but not least, you want to make sure that you actually take action on the feedback you have garnered. Going to the effort of collecting feedback from your customers but then not bothering to do anything with it can actually hurt your business more than if you didn’t ask for feedback at all! You want to encourage honest responses and demonstrate that you’re really listening by nurturing an attitude of ‘let’s fix it!’ This breeds a culture of respect and integrity that your customers will truly appreciate.  

Taking the time to gather genuine feedback from your customers has the dual effect of helping you create an establishment that truly exceeds peoples’ expectations while simultaneously building the loyalty of the customers who frequent your restaurant. There is always room for improvement and in today’s economic environment, it is more critical than ever to do everything within your power to ensure that your customers’ experience is as remarkable as it can be.

First Quarter Review for the 2013 Restaurant Industry

May 31, 2013

In comparison to a year ago at this time, sales in the restaurant sector during the months of January and February weren’t quite as good. There’s been a variety of factors influencing the downturn which we will discuss below. That being said, March actually saw most restaurants moving back into positive territory, although consumers’ willingness to spend continued to fall (as indexed by Consumer Edge Research.)

Given the slow start to the first quarter, the opening of the second feels somewhat uncertain, though opportunities to solidify market share and attract new consumers can still be found.

Challenges to First Quarter Restaurant Sales

There have been a number of factors which have influenced the sales for the restaurant industry in the first quarter of 2013. Part of it has to do with the impact of payroll taxes and delays in tax refunds, which certainly hurt consumer spending as compared to a year ago. The bad weather that many areas of the nation have been experiencing over the last couple of months has also played a role in first quarter results.

March seems to have shown a recovery to some of these challenges, but the economic environment continues to be somewhat fragile.  In addition, Easter fell in March this year (as opposed to April last year), which alters the numbers somewhat.

A Look at First Quarter Statistics for the Restaurant Industry

Interestingly enough, during the month of March restaurant same-store sales rose by .5 percent, yet same-store traffic declined by 2.0 percent. In comparison to February, this is positive news (February same-store sales declined by 5.0 percent, and same-store traffic declined by 4.2 percent). In addition, 107 out of 171 DMAs reported positive results, compared to only one such report in February.

Overall for the first quarter of 2013, same-store sales fell by 1.3 percent and same-store traffic declined by 3.7 percent. Consumer Edge Research puts out a report called ‘Restaurant Willingness to Spend Index’, which shows that consumers’ willingness to spend their money came in at 83 for January, 82 for February, and 81 for March.

Turnover Results and Niche Market Opportunities

Analysis of turnover rates for the month of March shows that turnover in management positions is decreasing while turnover in hourly positions is increasing. This makes sense given that everyone is looking for ways to make more money – those who aren’t getting paid enough are going to look elsewhere and those that have good jobs are going to want to keep them. Overall job growth for the first quarter remains right around 0.9 percent.

First quarter sales have also seen an increase in adult-only parties, with many families saying that it is simply too expensive to eat out with the kids. This trend represents an opportunity to recapture the family audience through strategic positioning and brand messages.

All in all the first quarter results are a little disappointing, but many businesses are looking forward into the rest of the year with optimism as our economy continues to improve and people are better able to relax the need to be hyper-vigilant over their budgets and expenditures.

Superfoods in the Restaurant

May 23, 2013

The last few years have seen a marked increase in a variety of different foods getting elevated to the status of ‘superfoods’. You’ve probably heard all the hype about how these superfoods go above and beyond in terms of the provision of essential nutrients that your body needs to stay healthy. In fact, you may have heard too much hype and are tempted to simply dismiss these foods as passing fads. Do so at your own peril! Superfoods are here to stay, and Americans are embracing them whole-heartedly.

We Live in an Increasingly Health Conscious Nation

Thanks to all of the media coverage about how Americans are some of the most obese people in the world, in combination with new insights about how to stay healthy, our nation’s people are becoming increasingly health conscious. They recognize the importance of proper nutrition and the effect that it has on our performance and well-being. More and more people want to both look good and feel good. It’s no surprise then that they are looking for healthier options on restaurant menus when they eat out as well.

What Criteria Classifies Something as a ‘Superfood’?

When you hear something called a ‘superfood’, you can expect that it means it is packed full of vital nutrients. In most cases the food either has more than the normal level of certain nutrients or it has quantities of nutrients and/or amino acids that are difficult to find elsewhere. That being said, there actually isn’t yet any set, formal criteria to consider something a superfood. As a result, there is currently a wide variety of foods housed under that umbrella and you should conduct your own research to conclude which are genuinely worthy of being additions to your regular menu options.

Superfood Hits from 2012 Restaurant Menus

Thanks to consumer pressure to provide healthier options and pending legislation about the disclosure of calorie counts on the menu, many restaurants have already added a number of superfoods to the menu. Avocado had the largest menu penetration for restaurants in 2012 – appearing on 35.6% of restaurant menus (an 8.9% increase from 2011). Olive oil followed its heels closely with an appearance on 30.1% of menus. Walnuts hit 23.6%, blueberries at 20% followed by sweet potatoes with an 18.6% appearance rate. Other foods such as kale, quinoa, beets, acai, and brown rice all also made substantial gains in appearance on restaurant menus across the nation.

Now, it’s obvious that consumer trends can change quickly in terms of the specific ingredients they want to have available to them when they eat out. While keeping up with these trends is somewhat important, it’s not necessary to try to feature each and every one on your menu.

The specific foods that are going to fall into the superfood category will shift somewhat according to the tastes and fashions of the moment. Instead of trying to follow every one, what is more important is simply the recognition that the current consumer trend for more healthful foods is a trend that is here to stay.

The Benefits of Using Tech Tools to Manage Labor Costs

May 17, 2013

Balancing your cost of labor against the amount of sales you’re making at any given time is often a big challenge for restaurants. It can be hard to predict whether or not you should keep staff on in preparation for potential customers or send them home to save some money on labor costs.

Fortunately, there’s some great new tech tools designed to not only address this issue, but provide a wealth of other information as well. It’s called POS (point of sale)-based scheduling software, and if you’re not using it yet, you should be!

Restaurant Staff Scheduling Becomes Streamlined

When utilizing POS scheduling software, you no longer have to deal with irritating questions such as, “Do I work today?” Instead, you send out an approved schedule via email, text, or smartphone push alerts letting everyone easily stay on the same page.

Even better, if employees want to switch or trade shifts, it can’t happen without management approval and once the change is made it’s sent out to everyone else on the team immediately.  This system also helps to keep overtime in check as well as assisting your ability to stay within your labor budget. You can see how effective a communication and planning tool this can become for your team.

POS-Based Software Boosts Your Bottom Line

Along with making scheduling far more convenient, POS scheduling software also keeps track of information such as historical sales data, labor expenses in real time, and labor to sales percentages. This information can help improve predictive scheduling, control costs, and catch mistakes as they happen so that there are no surprises at the end of the week.

Above-store access allows district managers to view multiple locations at once, in real time if they wish, to see how closely actual costs are paralleling budget targets. This wealth of information is particularly useful in fine-tuning the actions of your managers. For example, if business has dropped off at 2:00 but the manager has kept everyone on until 3:30, it’s easy to see the impact of that choice.

Generate Forecasts so that You can Better Predict Staff and Sales for Your Restaurant

The final major benefit of implementing POS-based scheduling software is that it can utilize your historical sales data, labor budget, current events, and even extraneous factors such as the weather to help determine the amount of staff you should keep on during any given time frame. Managers who have a forecast of sales revenue handy are better able to schedule labor accurately for all positions and wage levels. It makes them more conscious of scheduling on a focused basis rather than just letting a shift ‘happen’.

Now granted, this technology isn’t fool-proof. Utilizing it effectively still requires some gut instinct on the part of your managers, but when used as a guide it can be a very powerful tool to both streamline your restaurant’s business as well as give you some clear insights on how to best manage the cost of your labor against the amount of money your business is actually bringing in.