Deal With Dueling Demands: Optimize Success in 2007
March/April 2007
Debby Cannon, Ph.D., CHE
All projections are that 2007 will be a good economic year in Georgia and likewise for the restaurant and foodservice industry. Dr. Jeffrey Humphreys, Director of the Selig Center for Economic Growth at the University of Georgia, has called his projections for Georgia’s economy “relatively upbeat.” Although nationwide there is drop in gross domestic product (GDP), the decline in Georgia is slight (a drop of 0.3 percent). It is also forecasted that Georgia’s GDP will grow at least a full percentage point faster than the nation’s, and this is for the third straight year.
Regarding restaurant expenditures, Humphreys expects that people will spend more money dining away from home, though the increase is expected to be moderate. A number of factors will impact this gain, including population growth, employment growth, a rise in disposable income and more travelers, both business and leisure tourists, visiting Georgia.
Along with the growth in Georgia’s restaurants, there are likely to be several dichotomies for operators and owners to manage. Those who proactively deal with these changes will, no doubt, have a distinct competitive advantage versus those in the industry who are caught blind-sighted and flat-footed.
These dichotomies include:
- Increased revenues – Greater need to control operating expenses
- High tech - High touch
- Greater number of customers/guests - Heightened need to retain customers, and
- A workforce that is more diversified than at any time in history - The need for employees to be a part of “one” workplace family
Let’s look at each one.
Revenues / Expenses
There’s an old adage that high revenues can hide a lot of sins, meaning that it is easier to absorb more expenses, even mistakes, and still turn a profit. That philosophy doesn’t reflect good management, however, and can create a culture of wastefulness and carelessness. Severe winter weather in many parts of the nation will result in more expensive goods and supplies. Other areas that require constant attention are utilities and insurance, both which can be controlled to a certain degree, with assertive “grass roots” activities involving employee awareness and responsible actions. Employee incentives to help prevent accidents for workers and guests, to acknowledge conservation in the operating of appliances and to avoid wasteful breakage and discarding of usable or recyclable items can have a marked return on investment.
High Tech / High Touch
The phrase “high tech – high touch” was coined over 20 years ago which was truly visionary considering that we could not have even imagined in the early 1980s the impact technology would have on our lives today. The phrase indicates that there is a direct positive correlation between technology consuming our lives and the need for meaningful human contact. In our industry (and most others as well), that meaningful human contact is service. Not just service or good service but memorable, great service�whether at a QSR drive-through or at a fine dining restaurant. The general population is starving for warm smiles and welcomes, attention to personal preferences and fond farewells�again, whether at a QSR or at a fine dining establishment.
Customers
In a recent survey, CEOs from a variety of industries identified customer loyalty and retention as their top concern. If we could retain a high percentage of our customers, our marketing and advertising efforts would not cease but would bring in the true growth factor for a business. In 2007, we are expecting an increase in our customer base. This presents an invaluable business opportunity that must be strategically planned, from hiring needs to operating practices. Employees must be engaged in finding the solutions and enhancing each “touch point” of the customer experience. Telling a customer that there is a 45-minute wait can engage and excite the guest that there is something really special to wait for (and, by the way, you can be comfortable while waiting whether by ordering a drink or having a chance to peruse the menu) if done in the right way. As we have unfortunately seen, it can also be done in a way that yells (without saying these exact words): ” Go away. We are too busy and you are not wanted here right now!”
We have the technology to connect with our customers and create additional and meaningful “touch points” in building their loyalty. For example:
- Know your guests – from their favorite menu items to special occasions, best ways to communicate with them and more. For large operations, this may necessitate a database that is created from information provided by employees (most likely servers) on the regulars or those who could become regulars. For smaller operations, this information can be manually kept in an alphabetized logbook.
- Let guests know that you have missed seeing them when they have not been around. Do something nice and unexpected for returning guests, such as a free appetizer or dessert.
- Get to know guests’ names and have employees call guests by name. There is no greater ego builder than to have someone remember your name. People, by nature, like to do business with places that make them feel good.
These are just a few ideas. Do a brainstorming session with your employees and get their suggestions. A customer typically will connect to one particular employee (showing the importance of the front-line employee) and this is the foundation from which loyalty grows. The loyal customer cannot be ignored because we are a fickle society and, in time, allegiance fades.
Workforce
Along with customer retention is the need to retain employees, a long-time challenge for the restaurant industry as a whole. Most industries struggle with employee retention. The restaurant industry faces the employee issue on a very big scale, as the number two employer next to the government.
Our industry is enriched with the many cultures and backgrounds of the 12.8 million employees nationwide. There are several pieces to the employee retention puzzle but an essential piece is that people want to be included and engaged as an important part of the business. They want to feel that they are contributing to a greater mission through their day-to-day efforts. They also want to belong and feel part of the team. These needs present tremendous opportunities for today’s restaurant manager and owner in forming a team with the team members understanding and focusing on the goals and mission of the operation regardless of individual differences.
Debby Cannon, Ph.D., CHE is Director of the Cecil B. Day School of Hospitality, Robinson College of Business, Georgia State University.
