NAPICS 2011: Finding the silver lining

Lance Armstrong wasn’t supposed to win his sixth Tour de France, which was held not long after his battle with cancer. But it was during the grueling latter stages of the race, winding uphill through The Alps, when Armstrong solidified his record-breaking performance, proving once again that he is a winner.

The most difficult challenges often bring out differences between competitors. This was true during the 2004 Tour de France, and this is true within the restaurant industry as it navigates through a challenging economy, said Jeff Joiner, a consultant from MVP Sales. This was Joiner’s underlying theme during the keynote address, "Silver Linking: The Unprecedented, Unbelievable, Undeniable Opportunities Created by Today’s Economy," at the North American Pizza & Ice Cream Show (NAPICS) earlier this week in Columbus, Ohio.

The National Restaurant Association predicts 25 percent of restaurants that currently exist will be gone within the next 18 months. Currently, there is one restaurant for every 110 households in the United States. 

"There are way too many restaurants. Add to that the fact that everything is moving at an astounding rate – faster than ever before – and you have a lot of overwhelmed, stressed, anxious and fearful people," he said. "The world is changing faster than ever and you have to change too if you want to survive."

Joiner said there are six ways to differentiate your business from competitors during rough times:

Don’t panic. The military ranks as one of the least stressful jobs and that’s attributed to the feeling of being in control; strong group cohesion; trust in their leaders; high motivation; and feeling well-armed and well-trained. This is how business owners should approach their operation.

Take a hard look at your menu. Ask yourself, "What do we have on our menu and why." Do NOT lower your prices. Rather, do some menu engineering by breaking up your offerings into four parts:

  • Stars: Items that are profitable and popular – keep.
  • Dogs: Items that are not profitable or popular – get rid of or replace.
  • Plow horses: Items that are popular but not profitable – either raise the price, or use different ingredients or smaller portion sizes to reduce their cost.
  • Puzzles: Items that are profitable, but not popular – either reposition them on the menu to gain greater visibility, get the wait staff to use suggestive selling, change their name, change their recipe, or replace them with another item.

Upgrade your talent. Take a look at who is working for you. Are they contributing to your business? Instead of advertising for servers, advertise for "entrepreneurial interns." Tell them that they’re going to make minimum wage, but they’re going to learn about how to run a business.

Focus on improving the customer experience. "If you ask someone about a good experience they had at a restaurant, they’ll almost never tell you about how good the food was; they’ll tell you how they were made to feel," Joiner said. Focusing on what feelings you want to convey as a restaurant – welcoming, comfortable, relaxed, entertained, etc. – is more important than the actual food, he said, using Chuck E. Cheese’s as the perfect example. "They are hugely profitable and it’s not because of their pizza," Joiner said. "They sell entertainment and fun."

Get more complaints. Have a conversation with your guests. Do more than just offer a suggestion form. Too many operators avoid this part of the process, but it’s important to know why a customer is dissatisfied in order to improve your business.

Plan for the future. "The average corporate executive spends 2 percent of time actively thinking about the future," Joiner said. "That is simply not enough. Force yourself; discipline yourself on figuring out where you want to be in five years. That’s the best way to avoid getting complacent."

  

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