Reputation

People sharing a plate of nachos
by David Klemt David Klemt No Comments

Nachogate: A Lesson in Standards

Nachogate: A Lesson in Standards

by David Klemt

People sharing a plate of nachos

You wouldn’t think a social media post about a plate of nachos could cause a scandal but that’s exactly what’s happening, and it’s known as Nachogate.

Shockingly, this story comes to us from a luxury casino resort in Las Vegas.

A photo of a meager dish with six entire tortilla chips on it has 1.3 million views already. That’s pretty impressive—or unfortunate, depending on which side of the post you’re on—considering the post is from this Monday.

One of the top comments on the post points out that there’s quite the disparity between chips and accompaniments.

“More condiments than chips. Wow,” reads the comment. To which the original poster responds, “They said it was so you can have the perfect bite.”

It should go without saying that every dish put in front of a guest needs to be as close to perfect as possible. If it’s on the menu, if it leaves the kitchen, it impacts the guest experience. There is no, “Well it’s only [insert item]. It’s not that big of a deal.”

That mindset simply has no place in hospitality.

No, not every dish or drink is perfect. Yes, everyone makes mistakes. The absolute lowest standard should be caring enough to catch mistakes before they affect guests.

Failing that, every operator and leadership team member needs to care enough to acknowledge mistakes that reach guests, handle them gracefully, and fix them. This includes listening to and rewarding servers, bartenders, barbacks, and hosts whenever they catch a mistake.

Of course, there’s another lesson here. When developing non-negotiable standards, aim high. Fountainbleau Las Vegas is a luxury lifestyle brand; I doubt Nachogate reflects the company’s standards.

#Nachogate Fallout

Look, it can feel good to say that we don’t have competitors in this industry, we have peers. In some ways that can be an accurate statement.

However, watch what happens when an operator makes a mistake and it blows up in spectacular fashion.

Case in point, Nachogate. Or, given how the situation went viral, #Nachogate.

It would be bad enough if The Tavern at Fountainbleau Las Vegas took a reputational hit solely with the guests it affected directly. Obviously, it gets exponentially worse when it takes off on social media and alters the perception of potential guests.

But #Nachogate got worse when the venue’s “peers” leveraged the situation to their advantage.

That’s just a handful of posts taking advantage of Fountainbleau Las Vegas’ mistake. And that’s a lot of free marketing leveraging an unforced error that transformed into a viral moment.

Resolution

Alright, so I probably haven’t made any friends at Fountainbleau for sharing this story. Well, allow me to extend an olive branch. After all, I’ve made plenty of mistakes and will make more in the future.

It appears that the issue has been addressed by the property. That says to me that there are indeed standards, and there are people who care enough to respond when they’re not met.

Again, mistakes happen. The key is to correct course and move forward. Fountainbleau has done just that.

That’s a smart move. A mistake was made, people piled on, and instead of ignoring the issue, the company acknowledged and corrected the mistake where it blew up: the public eye.

Fountainbleau Las Vegas is just over a month into serving the public. There are going to be growing pains. Indeed, anyone who has been following the casino resort is aware that there have been much larger issues. For example, the company is dealing with the departures of three high-level executives.

The point of this article isn’t to roast Fountainbleau further. Assuming the viral post is true and the nachos at The Tavern have indeed been improved, a mistake was made and was then addressed.

I’m sharing this story as an example to drive home the need for standards, for non-negotiables. That means sitting down, considering every element of operations and service, writing out standards, and training teams on those non-negotiables. It’s as important as identifying values, sharing them with the team, and adhering to them.

Sit down today and develop your standards. If you’ve done that in the past, review your standards, update them if necessary, and ensure they still have buy-in from your team.

Image: Herson Rodriguez on Unsplash

KRG Hospitality Start-Up Restaurant Bar Hotel Consulting Consultant Solutions Plans Services

"Stop Making Stupid People Famous" graffiti
by David Klemt David Klemt No Comments

Alright, Seriously—WTF, Grubhub?

Alright, Seriously—WTF, Grubhub?

by David Klemt

Or, more to the point, stop working with “partners” who exploit our industry rather than support it.

In spectacular and entirely predictable fashion, Grubhub’s “free lunch” further reveals that third-party delivery platforms don’t care about restaurants.

Of course, they all say they support restaurant owners and operators. And, of course, they’re quick to pat themselves on their backs for being a pandemic lifeline.

But…no. Time and time again, mainly through their exorbitant and exploitative fees, they prove the opposite is true.

Restaurants and bars aren’t third-party delivery partners. Rather, these relationships are adversarial and detrimental. So much so, in fact, that some states passed laws to limit third-party delivery fees.

In Nevada, for example, Clark County Commissioners passed an emergency ordinance in August 2020 capping those fees at 15 percent. Clearly, we need to stop enriching companies that prove they don’t support the hospitality industry but cause it significant harm.

Free Lunch?

They say there’s no such thing as a free lunch. Apparently, Grubhub really wants to prove that maxim true.

That’s one of the takeaways from their disastrous promotion. Last Tuesday, in what’s being reported as an attempt to claim the delivery throne in New York City, Grubhub offered “free” lunch to anyone who placed an order for delivery.

The requirements for this promotion? Place an order for delivery through Grubhub on May 17 between 11:00 AM and 2:00 PM and use the code “freelunch.”

Of course, customer orders weren’t entirely free. Rather, the code was good for a $15 discount. Still, a wildly attractive offer as the ensuing debacle reveals.

Unsurprisingly, the promotion made for some eye-grabbing and eye-rolling headlines. Buzzfeed News published the most attention-grabbing one: “GrubHub Was Getting 6000 Orders A Minute During Its Promo Today That Left Restaurant Workers Stressed And Customers Hangry.”

Six thousand orders per minute during a promotion with a three-hour window in a single market.

In addition, the outlet reported that one unsatisfied customer was number 3,630 in the Grubhub customer service queue. Apparently—and who can blame him—he hung up before he could speak with a Grubhub rep about his missing order.

Duh

Who could’ve seen this coming? Any of the restaurant owners, operators, or team members Grubhub “serves,” that’s who.

In fact, anyone who works in this industry with on-premise experience knew this was going to happen. So, too, any journalist who specializes in hospitality.

The fact that whoever came up with this promotion didn’t see this coming is revealing. Unless the creators of these apps and services have real-world restaurant experience, they don’t understand the business.

How can one effectively and properly serve an industry without an understanding of how it operates? Hospitality is about service. Shouldn’t the companies attempting to work within our industry work hard to serve alongside us?

Let’s be clear—this promotion was in no way designed to help struggling restaurants. It wasn’t intended to boost their traffic and revenue. Rather, it was solely created to serve Grubhub’s desire to be number one.

As we all know, we’re experiencing major staff shortages. There are also supply shortages making it difficult for operators to obtain product reliably. Grubhub made those problems exponentially worse.

Some restaurants stopped taking delivery orders. Others canceled orders. There were operators who closed in an effort to catch up with orders and prevent the situation from worsening.

According to news stories, some social media users posted that they planned to stop ordering through third-party platforms.

Negative Impact

If you’re new to KRG Hospitality, welcome. You’re likely realizing that we’re not fans of third-party delivery.

Those of you who are familiar with us have known for quite some time that we support direct delivery. That is, delivery controlled and executed by the restaurant itself.

It’s not that we’re against innovation. Rather, our dislike of these platforms, generally speaking, comes from our perception of their behavior.

In our opinion, they take control away from operators and cost them money. Again, speaking generally, they collect customer data that operators should control. Their fees are ridiculous in most cases. And when it comes to the customer experience, their inconsistencies and shortcomings reflect poorly on the operators far too often.

Studies show that customers who have issues with third-party deliveries often place the blame on the restaurant. Food the wrong temperature? Order arrive late? Packages in less-than-ideal condition? While those issues and others can be the fault of the driver, the restaurant often takes the brunt of a customer’s dissatisfaction.

Of course, there’s also the financial impact of third-party delivery on restaurants. A SevenRooms report from last year reveals how these platforms harm operators and their bottom lines.

The Solution

Look, we know operators have a ton on their plates. But protecting and boosting the bottom line is a non-negotiable element of this business.

Yes, it’ll take some time, effort, and money to set up direct delivery. However, it’s the best solution.

Direct delivery means the operator collects and control valuable data. Likewise, the operator can ensure consistency. Through direct delivery, the operator shapes and controls the experience.

Control. Inherently, third-party delivery takes some control away from operators. That’s not a good thing, and neither is their financial impact.

Look into setting up direct delivery, take control, and protect your revenue ASAP. Friend of KRG “Rev” Ciancio and SevenRooms CEO Joel Montaniel each address delivery on the Bar Hacks podcast. Listen to episode 13 with Rev and episode 24 with Joel to learn more about delivery.

We need to stop rewarding companies that exploit our industry and take advantage of our owners, operators, and hard-working staff members.

Direct delivery is the answer. Take steps to implement it today.

Image: Rosie Kerr on Unsplash

Broadway-style McDonald's sign in Chicago, Illinois
by David Klemt David Klemt No Comments

A Lesson in Guest Perception

A Lesson in Guest Perception

by David Klemt

Broadway-style McDonald's sign in Chicago, Illinois

At this point, it’s becoming more of a surprise to not be told that the ice cream machine isn’t working at a McDonald’s restaurant.

Per a report from earlier this year, 25 percent of their machines are broken at any time. In fact, the brand made a joke about it in 2020.

Interestingly, with all the road trips and flights I’ve taken, I had never encountered a nonfunctional ice cream at a McDonald’s. Until last week.

Feeling nostalgic, I drove to a McDonald’s near my home for a Shamrock Shake. Growing up, my father always enjoyed the Shamrock Shake LTO. I’ve had maybe one or two in my entire life.

So, I drove over, got in line, and confidently asked for a Shamrock Shake and a Mint Oreo Shamrock McFlurry. And then I heard the words I’d never heard before:

“I’m so sorry, our machine isn’t working.”

Devastated, I did what any well-adjusted adult would do: I ordered a double cheeseburger and a 10-piece Chicken McNuggets combo. Same thing as a shake and McFlurry, right?

Guest Perception

I won’t dive too far into the minutiae of the longstanding McDonald’s ice cream machine saga. By now, we’re all familiar:

  • These machines break so often there’s a website dedicated to the problem. McBroken shows people where ice cream machines are working and where they’re broken. (If only I had used that before my ill-fated visit…)
  • The machines reportedly take four hours per day to clean.
  • There are claims that Taylor, the manufacturer of the machines, makes 25 percent of their revenue from performing repairs.
  • Outlets have reported the FTC is investigating the situatithe machine’s manufacturer, Taylor.
  • The latest news is that Kytch is suing McDonald’s for $900 million.

I’m not a McDonald’s board member, nor am I a franchisee. So, I’m not privy to any discussions swirling around the ice cream machines in use currently.

However, I do find it surprising that a brand as massive as McDonald’s would allow this issue to continue. For a brand that claims nothing is more important than delivering a high-standard of quality food, this joke is no longer funny.

What’s more, the issue is an opening for their competitors.

Leave an Opening and a Competitor will Take it

Jack in the Box has roasted McDonald’s for their ice cream machines in the past. This month, however, they’ve amped up their trolling.

Now that the Shamrock Shake has returned, Jack in the Box has pounced.

It would’ve been enough for Jack to mock McDonald’s on Twitter during Shamrock Shake season. But nope—Jack is dragging McDonald’s even harder.

Head over to McBroken and you’ll see a huge banner that reads, “DON’T GET McSHAMMED.” You’ll notice that the map is now also populated with Jack in the Box locations.

Click the aforementioned banner and you’ll find yourself on the Jack in the Box website. More specifically, it’s a page promoting their mobile app.

Taking it further, there’s currently a promotion encouraging the download: using the code “McSHAMMED” scores the user a $2 shake.

Since we’re in Shamrock Shake season, Jack is offering their new Oreo Cookie Mint Shake. And yes, it’s green.

Innovation and Problem Solving are Crucial

Look, I’m in no position to tell McDonald’s how to run their business. If they’re comfortable with negative guest perception and experiences, that’s on them.

It’s also on them if they want to show their guests and competitors a failure to innovate, solve problems, and be agile.

The ice cream machine debacle should be a lesson for all operators. Leave an opening and your competition will take it, slamming it shut behind them.

At best, maybe you’ll be able to adapt and overcome. At worst, they’ll be social media and marketing savvy, and roast you publicly. Once a brand’s perception slips, it can be incredibly difficult to get it back to where it once was.

As an operator, you’re an entrepreneur. Entrepreneurs innovate and solve problems.

Image: Joshua Austin on Unsplash

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