In 2022, our focus needs to be on recovery, which means starting strong, gaining steam, and keeping momentum going throughout the year.
The past two years have been a nonstop flurry of starts, stops, and false starts for American and Canadian operators.
Every challenge operators face during a “normal” day has been compounded. Recruiting, hiring, training, marketing, increasing traffic and revenue, managing inventory…it’s all more challenging.
However, “challenging” doesn’t mean “impossible.” Under the best of conditions, restaurant, bar, and hotel operations are a challenge. Overcoming adversity, in other words, is a consistent element of daily operations.
Now, whether we should view constantly overcoming challenges as a badge of honor… Well, that’s a different conversation, one about industry-wide changes that are long overdue.
For this post, my focus is on starting 2022 off right, building momentum, and keeping it.
Last year, we launched a coaching program called KRG Momentum.
KRG is known for our Roadmaps to Success, which include of our in-depth feasibility studies and detailed business plans, both of which help operators secure funding. However, some of our clients aren’t ready for our full suite of startup and expansion solutions.
KRG Momentum was designed from the ground up for these clients and consists of two programs. On one hand, we have Momentum for startups. On the other, Momentum for current operators looking to improve operations.
Both Momentum programs include a dedicated KRG coach; one-on-one video or phone consultations; and reviews of multiple operational elements. Of course, startup operators have different needs in comparison to experienced operators. And new concepts require different strategies than established operations.
For example, KRG Momentum’s startup program includes (in part):
review and navigation of startup questions and challenges;
weekly sessions that evaluate the past week and identify the next week’s focus; and
identifying blind spots throughout the project, positioning a startup operator to maintain their budget and desired opening date.
And current operators who choose KRG Momentum will receive, in part:
an in-depth discovery session to uncover the strengths, weaknesses, opportunities, and threats;
review of P&L statements, menu engineering reports, labor scheduling reports, menu design, online reviews, marketing campaigns, service sequence, and other pain-points; and
strategies to improve both revenue and profit margins within 90 days while working less hours per week.
All hospitality professionals—from business owners to staff—are members of a tight-knit family. Unless you’ve lived hospitality, you just don’t know the challenges, risks and rewards.
That means that startup operators and established operators don’t have to try to navigate the industry alone. Whether you aren’t sure where to even begin your ownership journey or aren’t sure how to overcome the hurdles you’re facing, the team at KRG Hospitality is here for you.
If you’re ready for us to help, click here to learn more about KRG Momentum. And click here to schedule an introductory call.
Take Steps to Become a More Sustainable Operation this Green Monday
by David Klemt
You’re probably being inundated with emails about Green Monday today.
Given how the meaning of the word “green” has evolved over the past couple of years, many people may think Green Monday is similar to Earth Day. In reality, it’s about the color of money.
Green Monday, a term coined by eBay, is sometimes called Cyber Monday 2. It’s the busiest online shopping day of December and second only to Cyber Monday in terms of online sales.
eBay and other retailers often promote the idea that shopping online is greener than shopping in person since people aren’t driving to and from stores. The reality is likely closer to the meaning of Black Friday—businesses are trying to boost revenue.
We’ve decided to take a different approach to Green Monday. Sustainability and responsible business practices are important to today’s consumer, including restaurant and bar guests. Significant swaths of people want to know they’re supporting businesses that share their values.
This Green Monday, take a look at the sustainability of your business. Evaluate what can be changed to make operations greener and implement those initiatives for 2021.
Go local. Source produce and other ingredients from local farmers and suppliers to reduce carbon emissions.
Go hyper-local. Grow produce using a restaurant garden or containers. Garnishes, items for salads, veggies for entrees… Get creative.
Reduce and reuse. Inventory software can help reduce food waste by sending alerts when items are nearing their expiration dates. Reconsidering portion sizes can also help avoid food waste, as can cross-utilization: use as much of an item in as many ways as possible, such as tying food and beverage together with the same ingredients. If you can do so safely and legally in your area, donate excess food items before they expire.
Recycle and compost. Getting in the habit of recycling can be as easy as placing dedicated bins in strategic locations throughout the back of house and bar. Composting can be more complicated, particularly for venues with limited space, but there are local organizations and farms that will pick up compostable items.
Be efficient. The more energy-efficient pieces of equipment you can use, the better. Flow restrictors and low-flow toilets can save millions of gallons of water. Eco-friendly cleaners and sanitizers are safer for people and the environment.
Audit your packaging. Are you using recyclable or compostable packaging?
Audit your suppliers’ packaging. Many brands have committed to reducing packaging or opting for more sustainable materials. Speak with your suppliers and request reduced packaging.
Significant, Permanent Restaurant Closures Expected to Rock Canada Unless Situation Improves
by David Klemt
Industry surveys continue to reveal how dire the situation is for operators.
On December 8, Restaurants Canada, a non-profit that represents and advocates for the Great White North’s restaurant industry, shared the results of a survey they had conducted between November 26 and December 4. A total of 511 surveys representing 3,000 restaurants were completed.
According to Restaurants Canada, the nation’s foodservice industry consists of 97,500 establishments ranging from QSRs to bars and full-service venues.
More than eight out of ten survey respondents answered that they are either barely staying afloat or are operating at a loss. Drilling deeper, significantly more restaurants are operating at a loss—65 percent of survey respondents fall into this category. Just 19 percent of restaurants represented by survey respondents are able to break even.
That’s 2,400 restaurants of 3,000 struggling to survive, and 78,000 restaurants out of 97,500, assuming the survey sample size accurately represents the overall industry in Canada.
To understand the long-term effects of government-mandated restrictions and shutdowns, one has only to digest another startling statistic: Restaurants operating in the red aren’t expecting to return to profitability for a minimum of 12 months.
Under optimal conditions, the average Canadian restaurant operates on razor-thin margins. Per Restaurants Canada, restaurants keep just five percent of every $10 in sales on average, or 50 cents. The industry is Canada’s fourth-largest employer (it’s number five in the United States, for comparison), accounting for 1.2 million jobs, 58 percent of which are held by women. Over thirty percent of owners, operators and staff belong to a visible minority, further illustrating how important restaurants are to diversity and the economy; half of all restaurants in Canada are operated by immigrants. Just like in the America, restaurants are the first employer for most Canadians.
The industry is crucial to Canada, but this vital resource is under serious threat. One of those threats comes from lawmakers whose restrictions are making it much more difficult for operators to wring any profits out already miniscule margins. Much like the situation afflicting the industry in the United States, the situation is going to get worse in short order without government relief.
Restrictions are simply nails in coffins unless they’re accompanied by relief.
“Our members are seeking a new year’s resolution from government, not only to support their survival but our industry’s vital role building back a stronger, more resilient Canada,” said Todd Barclay, president and CEO of Restaurants Canada. “Restaurants Canada is calling for a national working group to pave the way for the foodservice sector’s revival, building on the commitment in the federal government’s 2020 Fall Economic Statement to provide targeted, sector-specific support to restaurants and other hardest hit businesses.”
That national working group, according to Restaurants Canada, should focus on providing businesses being affected by government-mandated restrictions with “sufficient, efficient and effective aid”; developing campaigns that make it clear to Canadians that restaurants are capable of safely and reliably providing safe meals; promoting delivery and takeout as a viable way for the public to support restaurants; connecting with operators to understand the industry’s needs and pain points to ensure they’re in as strong a position as possible when entering the post-pandemic economy.
The next six months are crucial to the survival of Canadian restaurants. If things don’t improve, should the government not address the industry’s situation and provide relief, 48 percent of single-unit operators surveyed by Restaurants Canada indicated they expect to close within six months. That number jumps to 56 percent for multi-unit operators, who expect to close at least one of their locations (also within six months).
Restaurants Canada is asking for anyone who supports the formation of a dedicated national working group to contact their Member of Parliament via this link.
Once your idea has been researched and the market, location, technical, business, and financial viability of the idea has passed a series of reviews throughout a feasibility study, a concept development plan can then be started.
Remember, outside of being scalable, you want to build a concept that is sustainable, profitable, memorable, and consistent.
Bar concepts over the years have gone from being tame (or lame) or overplayed, like tiki bars or sports bars, to concepts that push the boundaries of what a bar can be. One of the best ways to build a customer base is to go off the beaten path to create a bold and fresh new bar concept.
A concept plan will focus on ‘chapters’ and visual storyboards that include an overall:
Concept Summary (a one page summarization similar to that of an Executive Summary)
Owning a bar is a dream for most that must be met with the right research, planning, and mind-set.
One’s market will, and must, define the concept. To be successful, you must be open to building a venue the market both wants and needs.
Concept development is giving your ‘idea’, both soul and character. A bar’s concept is the lifeline of its brand and longevity in the market. It makes your venue stand apart from the competition, and it’s ultimately your bar’s unique selling proposition.
Have you ever walked into a bar and been confused about its identity? The interior doesn’t match the beverage offerings, the social media experience doesn’t reflect the actual experience, and even the music doesn’t seem to match the vibe of the bar.
This is what happens when there isn’t a clear and detailed concept development plan in place, and it is a sure fire way to be just average at best.
It’s More Than Just a Drink
Most conceptual ideas start at the food & beverage level. A bar however, needs to remember that they don’t just sell food & beverage; they sell experiences through the enhancement of guest emotions.
When planning a concept, it’s imperative to have a focus on the style of menu and niche of entertainment – but a winning concept will elevate a guest’s variety of senses. Here’s how:
Visual: Use the mindset of a traditional bar meeting on-trend beverage effects. Consider the style of beverage vessels, the use of unique ice cubes or even dry ice, the garnishes used, and potentially a variety of ‘smoking’ techniques within a variety of your signature cocktails, providing a visual effect that grabs every guest’s attention.
Plus, it will be hard to find a guest who is not taking a photo and sharing it on social media – an easy promotional tool to make each of their individual networks feel as if they’re missing out (FOMO) on the best experience in town.
Auditory: Music, drinks, and food share an intimate connection. From the beginning, this should be a focus. Every day, every weeknight, and every weekend must be filled with strategic decisions around sound.
From your day-part strategies, to the sound of cocktail shakers, to live music calendars and even proper speaker placement – your venue must see why 76 percent of bar customers surveyed believe they stay longer due to the sound of the environment.
Olfactory (smell) System: Like sound, a pleasant and subtle fragrance can lead to an improved perceived quality of the environment and can enhance the mood of guests, causing them to stay longer. Our sense of smell is after all, directly linked to the part of the brain responsible for memory and emotion – two things bars need to strive for.
For example; consider a Smoked Cedar Plank Whiskey around the Christmas season. The scent of the smoked cedar will fill the bar area with a subtle Christmas tree aroma, prompting the guests attention and need to spend more money.
Gustatory (taste) System: Food & beverage pairings have never been more important, and it isn’t just for wine. Consider appetizers (snacks) within your food & beverage program that pair with miniature versions of your signature beverages (beers, wines, and even cocktails) that could be served on flight boards; elevating all flavor profiles.
Your remaining food & beverage menu should be small, balanced, and targeted around flavor profiles that your ideal guests desire.
Summary; When you combine these efforts, it’s easy to see how a successful brand can build a community around thousands of fans – within 30 days of opening.
This is something you can easily replicate if you focus your decisions on layout, design, food, beverage, training, and events around the above sensories.
We Have a Problem – There’s No Team Spirit in Many Bars
Within the industry, we always talk about ‘experiences’ – and rightfully so. At the end of the day, experiences are what bars and restaurants sell to customers. All of the emphasis however, is on customer or guest experiences; but what about staff experiences?
Do your staff show up, do their job, and go home? Is there any sense of ‘family’ in your establishment? Is there laughter, or just silence, or even worse…complaining?
Time to Hit the Reset Button!
Desirable experiences shouldn’t stop with just your customers – your team craves experiences too! As owners, operators, and managers, it is up to you to make your concept more than just a ‘job’ or way for staff to ‘pay their bills’.
Implementing the right culture statement and team-based strategy, will assist in controlling your labor costs and reduce turnover – resulting in not only stronger consistency within your operations, but a positive environment that will flow to your customers and help amplify word-of-mouth marketing.
Here are some #BarHacks to help you get started:
Web Presence & Social Media
Bar enthusiasts are seeking to learn and understand the culture of a bar when deciding on their eating, drinking, patio, or party destination.
This is a great opportunity to showcase your team on your social media channels and on your website. Create a bio for your staff noting something unique about them, take a photo (or better yet, a video) of them and share this content to your ‘community’.
This will equally make your staff feel like they’re a part of a team and the business development process.
Create That Stay Interview
Many of you have likely heard the term ‘exit interview’, but what about a ‘stay interview’? Take video to the next level by interviewing your staff and developing a series of testimonials as to why they love working for your bar.
This tactic will create a sense of place and family among your team and also assist in your hiring process; positioning you to attain higher quality candidates who seek a positive working environment.
A great team member is one who craves learning and one who brings the same set of values as you do to the table. Keep in mind …
“A bar is only as good as its worst bartender”
Every bartender must be of the same quality at your bar. If not, guests may become a fan of one bartender (and not the bar itself) – leading them to follow the bartender if he/she were to leave for another bar.
Take the time to invest in further training and education for your entire team.
Depending on your overall bar concept and financial model, consider developing an educational program for your team.
Think outside the box and create culinary/hospitality scholarships and/or consider sending your team to farms, breweries, wineries etc. to learn about specific products you offer and their development processes.
Continuous education will create a sense of appreciation, enticing your team to stay loyal to your establishment while benefiting not only their experience, but your customers’ experience as well.
Profit Sharing Programs
It’s safe to say, everyone enjoys working towards a common goal. Consider creating a realistic monthly revenue goal (slightly above your current average) for your bar. Now share this goal with your staff and create a SMART plan for the month on how to collectively obtain that goal.
If you surpassed that goal (congratulations), distribute a percentage (5% for example) of the monetary difference among your team.
Repeating this process each month will not only increase your revenue and profit, but will develop a team working environment, reduce turnover, and make your team feel important to the business and its success.
SMART Staff Reviews
Speaking of goals, there should be team oriented goals (profit sharing) and also personal goals developed within an overall action plan.
You should sit down with each individual teammate at least once every three months.
During this meeting and using SMART (Specific. Measureable. Attainable. Realistic. Timely) objectives, give each teammate something to work on over the next three months.
This could be increasing revenue per transaction averages, providing accurate inventory counts, reducing waste levels, or having accurate end-of-day cash out reports.
Of course, reaching objectives should be rewarded; therefore create a reward program that works for your concept and financial model.
Don’t let your staff get complacent behind the bar by having the same menu month-after-month and year-after-year.
This will lead to boredom, which will eventually lead to turnover. Allow your team to be creative by ‘creating’ food or beverage options that fit within the confines of your concept.
Consider holding an in-house contest each month to choose one featured food and one featured beverage option created by a staff member.
Highlight this on your social media and in-house marketing (effectively creating a story) while rewarding that individual with a commission on sales from that item for the remainder of the month.
If the product sells really well, consider adding that item to your everyday menu the next time you re-engineer your food & beverage menu.
In summary, execute a marketing plan approach to your staff recruitment and staff development program.
The time, resources, and effort spent on this will be well worth it in the long-run.
Let’s be honest, the traditional bar setting serving cocktails is an environmental nightmare.
Let’s think about it; there is high use of energy within ice machines, refrigeration, and glass cleaning appliances. There is enormous waste in garnishes, straws, bottles, and napkins (to name a few). And finally, there are corporate wineries, distilleries, and breweries producing a large carbon footprint delivering spirits to the bar.
When it comes to bars; (or any other food & beverage service provider) the producers, manufacturers, delivery drivers, owners, managers, and servers ultimately share the responsibility to create an enjoyable guest experience within ones concept. As we have seen with restaurant kitchens over the past 3-5 years, there is now also a ‘movement’ towards eco-friendly and sustainable bars, something many guests are seeking as part of their desired experience.
On the surface, it may sound like an easy change, but creating cocktails in particular that are ‘sustainable’ (zero waste), is in-fact difficult to produce while maintaining the required quality, speed, and profit margins both operators and guests, look for.
So how can independent bars make a simple impact within this craft-cocktail ‘movement’? Let’s begin to have a look at some strategies (#barhacks) that one can implement starting today:
Re-Purposed Ingredients – How can you use 100% of an ingredient? Start by looking at the beverage menu. How large is it? Does it have focus? What ingredients are used in each and every drink that’s made? Which ones are used for infused flavour versus visual appeal? Which ingredients are only partially used with the remaining components discarded into compost, for example fruit scraps? Review each drink and look for ways to re-purpose ingredients and their counter-parts, within both the bar and/or kitchen.
Edible Garnishes – Obviously, cocktail garnishes are decorative ‘ornaments’ that often add character or style to a cocktail. They are often used to complement and enhance the flavours in a drink by stimulating the special nerve cells in our nose and mouth. The days of plastic straws, festive umbrellas, plastic skewers, and other non-edibles however, need to stop. Instead, use fresh fruits, flavour infused salts, edible stir sticks, edible flowers, house-made flavor-infused lollipops on candy sticks (yes), and steel skewers for olives and other edible garnishes, if so desired.
Energy Conservation – Take a close look at your glassware and how it is washed. Are you using over-sized glasses (ie. martini glasses) that are taking up too much space on the wash-rack, leading to unnecessary additional washes (which costs money and uses more detergents)? How many glasses could you fit if you changed glassware sizes?
How much ice are you using in each drink? Does the beverage really need ice or could the glass be simply pre-chilled? Take a look at your menu, glassware, fridge space, freezer space, and use of ice machine. Is there a way to reduce used energy within the bar itself to help create sustainable cocktails?
Supply Chain Management – Transparency, traceability, and accountability must be a top concern when deciding on vendors to ensure all products (both food and beverage) entering your bar or other food service business, are not only safe & sustainable for your customers, but for your community. Work with beer, wine, and spirit makers who are equally trying to make a difference. With the growth of local distilleries, breweries, wineries, and produce suppliers; supporting local and reducing the carbon footprint within a bar, is so much easier! Collaborate and work together to make a difference.
In summary, don’t start a goal of 100% zero waste or sustainability – it’s likely not going to happen overnight. Instead, set SMART realistic goals to reduce waste by 15 or 30% over the next 6 to 12 months to begin building a sustainable cocktail and/or bar venue. Once that goal is obtained – double down on that goal for the next 6 to 12 months. You and your customers will notice a positive difference!
Festive Season. These two words signal colder weather (in most areas), delicious comfort food, creative drinks, memorable parties, laughter with friends & family, and of course – gift giving.
These are also two words that nearly everyone seems to look forward to throughout the year, including that of restaurant owners. The reason is quite simple; consumers are often in a generous mood which equals longer stays and more spending dollars.
Restaurants, bars, and cafes have the opportunity to generate an abundance of awareness, an increase in revenue per guest, and even repeatable business in what can be defined as the often slower months following the Festive Season (yes it is possible).
Let’s jump right into some Festive strategies your concept or venue should consider this holiday season:
Make sure that special events and other winter-related promotions are planned for well in advance, ideally 1-2 months prior. This season is such a large opportunity, that a true marketing plan should be developed just for the season. The festive cheer that starts the season, for example, can act as a forerunner to both Christmas and New Years Eve parties, packages, and other revenue generating opportunities such as gift card sales.
Speaking of gift cards – create a marketing program specifically around these money-makers. Restaurants are the most popular choice for consumers to purchase gift cards, with 41% of total gift card spend going to restaurants. But don’t just sell the one card. Create a promotion that includes spending an ‘x’ amount of dollars on a card before Christmas, and receive a second card with an amount of ‘x’ that can only be used in January or February. Add value, be aggressive, and get people through your doors over the next two months when sales are traditionally lagging.
2. Labor Management
Similar to that of the retail sector and depending on the size of the restaurant, additional staff may need to be hired to handle the extra covers that are waiting to come in. This is where planning ahead really comes into play. To be fair to yourself, your team, your new hires, and your guests, you need to ensure you leave yourself enough time for interviewing, talent selection, onboarding, and training before the peak of Christmas season truly hits.
Both front-of-house and back-of-house systems and their teams need to be reviewed to ensure your operations are prepared. Customer service and speed in the kitchen or bar should not be hindered by the fact it’s getting busier. You can ‘scale’ your business by being prepared; create mock schedules and see where there may be gaps to ensure a high standard of service is available when your restaurant needs to shine.
Speaking of staff, let’s not forget about their valuable time! Ensure they’re given time to spend with their friends and family too. Be flexible with your scheduling – and don’t forget to thank them for their loyalty and commitment!
3. Off-Premise Dining
With the increase in delivery and off-premise dining, the Festive Season may not show any signs of slowing that segment down this year. Is your restaurant prepared to market the catering and delivery of food and beverage to office parties and house parties?
This presents an opportunity to offer the catering of a traditional or concept-infused, Christmas focused meal or buffet style dinner — right to their door!
Create a variation of value-added packages for different sized parties and request 72 hours (or more) notice (with deposit) to have it prepped and delivered, right on time. Just don’t forget the high-quality take-out containers and plates for an easy clean-up afterward!
Pre-ordered packages such as this will generate cash-flow, control potential waste, and control staff costs.
4. Food Menu
Is your restaurant in a position to offer a traditionally plated meal or other harvest/winter flavors? How about a unique variation or infusion based on your restaurant’s concept and kitchen structure?
Don’t be afraid to think outside-the-box and get creative. For example, if you’re a Quick Service Restaurant (QSR) near a parade route, create an easy-to-eat holiday inspired option for ‘on-the-go’.
Develop a holiday-themed menu with your entire team (kitchen and bar team) with your target market and concept kept close in mind. Make it a fun exercise for everyone. As always, keep the specialized menu small and inviting to reduce inventory, prep-time, additional staff requirements, and potential waste.
You also want to keep in mind that a lot of the guests visiting may have never stepped foot in your establishment before because they’re just tagging along with a large party. Think of allergens and include dishes that vegans, vegetarians, and guests with other primary food sensitivities would still enjoy.
5. Beverage Menu
Having the right drinks on your menu is just as important as the food. The Christmas season is the best time of year to sell both pre-and-after-dinner drinks if you’re a dine-in restaurant.
You have to have the mindset that every drop counts!
While pre-and-after dinner drinks are big sellers, you can make a larger impact by offering ‘session drinks’ – drinks with a lower level of alcohol – or just zero-proof drinks all-together.
The drinking ‘culture’ associated with alcohol, in particular, has definitely changed over the past decade thanks to strict driving laws, the cost of ‘going out’, and the sophistication of consumers.
Show off your bar teams talent by creating ‘theatre’ in your beverages in addition to a balance in alcohol levels which should be promoted with the right mix of marketing.
When crafting your beverage menu, keep sustainability, speed, price, and perception of value in mind – for both non-alcohol and alcohol driven drinks.
6. Christmas & New Year’s Parties
You have the square footage, you have the approved capacity, and you have the kitchen/bar. These are the needed ingredients required to host an exclusive or intimate type event at any venue. Whether you have the capacity for 20 or 200 plus guests, there is an opportunity to generate awareness, revenue, and repeat customers by becoming known within your community for being the ‘best host in town’.
To make event management work for your restaurant, it must create a unique and memorable guest experience, which is no different than traditional dining strategies. Whether you’re hosting your own New Year’s Eve party or renting out your space before Christmas for a variety of private events – ensure there are defined (but value driven) food & beverage packages and a financial deposit made to protect your bottom line.
You also want to ensure there is a communication strategy in place to let other guests know if your venue is closed for a private event. Maximize each event by being organized, well staffed, and engaged. Take it a step further by providing guests at the event – an opportunity to revisit in January or February with a measurable gift (a coupon for a free appetizer or $10 gift card, for example).
By truly knowing and understanding your target market, your concept, and the neighboring business environment, the Festive Season is an excellent time to showcase your brand and your creativity – ultimately generating awareness, revenue, and repeat business opportunities, ultimately setting the tone for the following year!
Should restaurants ditch third party delivery apps and create their own in-house off-premise strategy? I recently took part in a few online conversations surrounding third party delivery apps – from both the consumer and the restaurant operator point-of-view.
If you follow along – I am not a fan of these services (at all). I’ve never used them nor suggested a brand to use them.
While I embrace technology in the restaurant space (and off-premise dining options) – I feel the business model surrounding these apps (in particular UberEats and Skip the Dishes during these most recent discussions) are lacking in both customer service and transparency while further killing overall restaurant profits (like operators today need anymore of that).
Let’s look at a recent transaction. I recently saw a screenshot from a consumer using a third party delivery application. After a delivery fee, a busy area fee, a peak delivery time fee, and the delivery fee taxes, a meal that was listed as $8.89 on the menu ended up costing them $30.36.
Of that, the restaurant earned a mediocre $6.67 of that order.
It’s not exactly a traditional breakdown of revenue that we see in restaurants, and operators today are struggling to adapt to this ever-changing restaurant landscape. I feel it came at them much too fast and many have jumped on board because they felt they had to.
But I have a question – why are we not doing a better job to get guests to spend that $30.36 they were willing to spend – in the restaurant or at least through our own off-premise dining program?
With a little effort – it can happen!
Here is what we know. Delivery and off-premise dining has disrupted the restaurant industry more in the last five years than anything else. Digital ordering paired with the outsourcing of delivery has impacted restaurant traffic, revenue, profit and overall restaurant operations like no other piece of industry-wide technology.
Based on the conversations this past weekend it seemed liked the only party benefiting from the use of these apps – was the third party. However, if you ask them, they’re apparently not making ‘huge profits’ either.
Here are a few notable quotes from the public chat that took place on Facebook – again from both consumer & operators:
“I’ve deleted the app – every time I’ve ordered, something goes wrong and a lot of times it’s the drivers fault not paying attention” – Consumer
“If you’re doing takeout, pick it up from your local business. Other than that you’re rolling the dice” – Operator
“Their chat-bot told me ‘we are deeply disappointed that we have failed to provide you with optimum service during your orders and for this reason we have decided that it is best to remove ourselves from this relationship’” – Consumer
“Best thing to do is get out and support your local restaurants, leave these rip off merchants congeal back in the gutter where they belong” – Operator
“I had no idea these apps take such a percentage from the restaurant on top of the delivery fee. I will no longer order through an app. I thought I was supporting my favorite restaurant, but apparently I wasn’t” – Consumer
Not much of anything positive.
Here’s the thing; recent stats are showing staggering numbers such as 60% of consumers ordering delivery in the past 30 days. Based on trend reports, this is ‘unfortunately’ only going to climb – even though I personally wish more people would visit restaurants, engage in the experience, get out of their home, and socialize with others away from their smart-phone.
But out of those that do order delivery through these third parties, 30% are experiencing poor customer experiences – with either the app or the restaurant – or both.
That is significantly higher than the number of complaints one would receive at the restaurant level without a third party being involved.
Here’s the next problem; according to a study by Steritech, consumers are placing over 80% of the problems on the restaurant through the use of these apps (even if most problems are not their fault).
Due to the third party app, a gap in communication immediately happens between the consumer and the restaurant. This leads to the restaurant not being able to often resolve the problem in a timely manner before that consumer blasts them for something on social media.
Not a pleasant situation.
This is because they’re sending their complaints directly to the third party app (the platform that ultimately placed the order for them) – which I suppose makes sense from a consumer point-of-view. This however leads to over 25% saying they would not order from the restaurant ever again – not entirely fair considering the restaurant may never have even known about this unhappy experience.
14% say food quality was not as expected (likely due to travel time or packaging)
19% say the order took too long
19% say the food wasn’t the correct temperature when it arrived (timing or packaging issue)
29% say the order was incorrect or missing something
All of this could be avoided! When partnering with these mainstream third party apps – you’re also:
Losing a direct communication channel
Losing positive brand perception
Losing much needed profits to sustain yourself
Losing consumer data for future marketing
Losing foot traffic in your dine-in real estate
Most importantly – you’re losing control once that food leaves your four walls.
Why on earth are we doing this to ourselves for such limited margins?
If you are operating a restaurant and are currently using these apps – though you will never have full control of the situation, there are a number of options available to you to leverage more control.
That said I encourage you to consider your own in-house off-premise program. These options below should be considered whether you’re partnering with a third party or if you’re offering your own in-house platform:
Offering a limited delivery only menu option with higher margins (consumers are obviously willing to spend more)
Offering limited day-part delivery times (example; not at 6pm on a Saturday when the kitchen is slammed)
Using specialized take-out packaging for certain menu items to protect the quality of your unique food options
Using tamper-proof packaging so delivery drivers cannot alter the order (happens often)
Having a quality control program (or expeditor) reviewing meals before it leaves the restaurant
Sending printed customer care promises (how to reach the restaurant directly) delivered with the meal
There are much better options out there for digital take-out, delivery, catering, and off-premise dining that will allow you to keep control of all of the above while maximizing profits including the introduction of your own off-premise strategy – which will often keep costs to under 10% – no joke!
Then, use these ‘savings’ to increase your own marketing & advertising efforts. It surely won’t be 25-30% like what these third party delivery apps are currently taking from independent operators (which you were willing to give up anyway); keeping more money in your pocket.
This type of in-house strategy will also differentiate your brand from the competition that is also increasing each day on these main-stream app platforms.
How will you stand out and make your brand memorable? How will you position your brand for a sustainable future? How will you protect your brand, its profits, and utilize the available customer data?
Don’t partner with them just because it seems like the easy thing to do or ‘because everyone is using them.’
The notion that you must be on them to survive is 100% inaccurate. If you need to use them for ‘marketing’ – you need to learn more about marketing.
Take a stand and learn about your options first.
I am yet to hear a positive story on how these main-stream third party delivery apps have actually helped their business grow in the long-term. In my professional opinion, restaurants should ditch third party delivery apps.
Originally Posted on Typsy – By Doug Radkey 10/02/2018
The development of a restaurant can be extremely daunting with its many moving parts and it’s easy to miss crucial start-up strategies within the mix of it all.
One you don’t want to overlook is your intended media launch strategy. Today, the word ‘media’ means so much more than your local newspaper outlet.
The worst thing you can do is start your marketing and promotional campaigns one week before opening or simply expect a Field of Dreams “if you build it, they will come” type of scenario to work.
Hint: it doesn’t!
A successful restaurant launch includes building plenty of buzz for the three-four months leading up to the opening. It also means developing what we call a communications strategy to deal with the variety of media outlets both before and after opening.
A strong communications strategy will prepare you for the most effective social, digital, and community-related marketing tools in relation with targeted media partnerships which will then target your specified audience across a multitude of touch-points.
Aside from the established chain restaurants, many aspiring and independent restaurateurs do not have the budget for their own in-house marketing team (or outsourcing an award-winning agency). And that’s okay. In order to be fully present within your community both before and after opening, restaurateurs just need to ensure they have the necessary marketing plans in place.
This means projecting the right voice to attract the right audience. This also means determining the tone of your content, the nature of your interaction, and the overall approach to your brands messaging.
It also means knowing how to handle any third party media attention before and after opening.
To develop an effective communications strategy – you want to focus on three key areas: your social media, your public relations, and your direct-to-consumer channels. Let’s have a look at each.
Within both your marketing and communications plan, you firstwant to develop a social media strategy. There is no getting around this today. Use plenty of simple, cost-effective strategies in the weeks prior to opening to create the buzz you want (and need). These methods will also maximize exposure (to both the public and other media outlets) in addition to early revenue opportunities during what’s known as your ‘honeymoon period’ – the first three months of operating.
This includes developing and/or executing on:
Social media channels, like Facebook, Instagram and Twitter, that your target audience actually uses each and every day
The development of strategic monthly content calendars for each social channel
The creation of social media contests and sales-driven promotions
Social media paid-advertising campaigns to further build your targeted community
Digital marketing partnerships where you can leverage both social media and email marketing
Food and beverage photography and videography strategies to enhance your visuals
It’s not easy building an online community from scratch. Your social media presence must have a strategy behind it – not a ‘spray and pray’ method of posting a food photo and hoping your target market will engage with it. It is imperative that you’re consistent, unique, and strategic. You also want to build digital partnerships that will help you successfully piggy-back on another’s already built social media community.
Leading up to the opening and for the first one-to-two months after – you want to build strong relations with your local media partners. Pairing this with a strong social media strategy is crucial in developing the awareness you need to get a head start in generating revenue.
You want to consider the following methods:
The development of your key brand messages to create consistency and reduce confusion
The creation, management, and distribution of press materials including a press kit, fact sheets, press releases, and owner/chef biographies
The development of a targeted media list – online, print, and broadcast. Know beforehand who you want and don’t want to associate throughout your local media. Don’t waste time meeting with media outlets that don’t have the same target audience as you do
Partnering with key influencers (bloggers) and tastemakers (farmers, breweries, wineries, and other key suppliers to your restaurant)
The identification and training of your start-up brand ambassadors; this includes ownership, management, and other priority personnel
At a minimum, you want to send out press releases and contact your local restaurant bloggers, podcasters, food critics, and social media influencers. Engage with your local industry dignitaries on social media and then inform them of your newly developed restaurant. Create an invite only event either before or during your soft opening to maximize on their value and to amplify your story.
To tie all of your social media and public relations together to create a winning communications strategy, you want to include a variety of direct-to-consumer campaigns throughout the first 30-90 days of opening.
You want to ensure your target market is seeing your brand across a variety of channels. Pending your choice of concept – you want to entice them to visit your venue approximately three times before the end of your honeymoon period.
You can achieve this by creating the emotion that your target audience is going to miss out on the hottest new restaurant in town (FOMO – Fear Of Missing Out). You can do this by creating the following:
A variety of menu tasting and beverage pairing events
Direct mail marketing campaigns to targeted hyper-local neighborhoods
Community marketing outreach and partnership opportunities (events, donations, and sponsorships)
Site sampling and street activations by personally taking food samples and marketing material to local businesses (using your developed brand ambassador strategy)
In-house return visit campaigns that measure the return-frequency of customers
How will you reach the maximum number of targeted customers with the least amount of spending to maximize your return-on-investment? How will you plan to be memorable and stand out from the competition as time goes on? Start early and be creative, imaginative, and bold in all of your efforts while being prepared to handle social media, public relations, and direct-to-consumer strategies.
Originally Posted on FoodableTV – By Doug Radkey 08/08/2018
With technology continuously advancing in the restaurant industry, it can be easy to get absorbed and caught up in the next big thing. Technology platforms can help you save time, financial resources, and improve ‘customer service’ levels, just to name a few.
But sometimes when you get so caught up in technology, you can forget some of the fundamentals that will never be replaced by technology, but still play a large role in the success of today’s restaurants.
The key is the right balance of technology that will assist you in meeting both short-term and long-term goals.
This article is not about how to not use technology (it’s a great asset,) but don’t let it fail you, your staff, or your customers. Let’s strip back the technology for a moment and remind ourselves as an owner, operator, manager, or front-line employee – some of the tactics that we must never forget or stop learning.
Curb appeal and first impressions must meet and exceed your guests’ expectations. When stripping back technology, restaurateurs must understand that first impressions are essentially a means of effective communication that positions a restaurant to develop positive customer emotions and “touch points.”
As always, one must thoroughly think about the consistent message and experience that’s intended to be delivered.
Key Performance Indicators
Technology provides an operator with a great amount of data, but restaurateurs still need to learn and understand this data and know how to use it to their advantage. Understanding key performance indicators such as staff turnover percentages, prime costs, percentage of repeat guests, and proper menu engineering statistics (to name a few) – are all essential to making the right business decisions that will eventually impact your bottom line.
Outside of having the right location, the right concept, and the right chef or mixologist – a restaurant needs to inherit five key concept characteristics that technology cannot simply implement on its own.
Restaurateurs need to develop scalability, sustainability, profitability, and consistency – while providing a memorable experience. Finding a successful, individual approach for managing each of these characteristics is the key to success in any economic situation. All five of these characteristics are important and must work in unison to be successful.
The 3 Elements of Marketing
In terms of restaurant & bar marketing, it comes down to three things– driving awareness, increasing revenue per customer, and generating repeat business.
Technology can help execute marketing strategies, but operators still need to know their target market and their hyper-local competition to understand which strategies will drive the best return on investment.
An ‘old school’ approach to developing a marketing plan will still deliver success in today’s technology driven world.
It doesn’t matter which role one plays in the restaurant, everyone must continue to learn. Owners, managers, and front-line staff should have the mindset and a personal development plan in place to continuously learn the industry. It’s important to stay up to date with customer service strategies, product details (visiting suppliers), and how the supply chain works within the restaurant. In addition; reading books and listening to podcasts for example are a great learning tool everyone can take part in.
It’s no secret, we’re all witnessing a shift in how technology affects customer service and ordering sequences.
As the technology continues to evolve, restaurateurs must not forget that engaging guests on a personal level will always build on those positive customer emotions. These “touch points” are required to make not only a positive first impression, but a lasting memorable impression.
This is especially important if you’re considering adding third party delivery to your revenue & service mix. How will you protect your brand and enhance customer service after the food has left your venue and is in the hands of their delivery drivers?
Make sure there is a plan in place that engages customers on a personal level.
Focus on Systems
Having the correct systems in place will create consistency, develop operating capital, enhance team morale, and build business value– while also positioning a restaurant’s concept for future growth opportunities (being scalable & sustainable).
This includes proper communication between front-of-house and back-of-house, day-to-day checklists, quality control methods, and human resource management, among others.
Again, there is technology that can assist operators with their systems, but they can’t develop the process of implementing the right systems for specific concepts. That is up to you to know which ones are needed to maximize each moment of the day.
Lastly, a sense of community is a driving force in this industry. We can build online communities (social followings,) but the best way to develop a sense of community is through collaborating with local farms, breweries, chefs, charities, and even the competition. Understanding this fundamental strategy will amplify your messaging throughout the community, improve a restaurants perception, increase staff morale, and generate revenue opportunities– while developing a destination, not just a restaurant.
Sometimes it is nice to just step back and review the bigger picture and remind ourselves not only why we’re in the restaurant business, but to revisit the basic fundamentals for restaurant success.
Once that is truly understood and the proper ground work is in place, technology can be implemented to enhance and support operations to save time, financial resources, and improve those needed ‘customer service’ levels.