Nov. 26, 2012
By Erle Dardick, founder and CEO of MonkeyMedia Software
If you think about it, the restaurant industry has done an amazing job in terms of its success and scale at filling the demand for its retail services. It's taken generations, but we have certainly become world-class retailers. Like all markets, they eventually segment, and along the way we must innovate and grow by exploring and mastering new service markets; for example the "catering" sales channel. It's beautiful in so many ways, but mostly because you can get a retail dollar out of "manufacturing plant" rents.
As restaurateurs, we all face the same challenge. How do we grow sales? How do we especially do that in competitive markets combined with a sluggish economy?
I say we do it by going back inside our companies. We need to go deeper into our communities and we must hear what our customers are asking for. The data is clear. They want healthier food, at good prices and the convenience of getting it fast. If you can bring the food to them, they'll consider it a bonus. But it's just not that simple.
On top of that, consumers want choice and alternative services from their favorite restaurants. Each one of our customers is making complex buying decisions every day when it comes to restaurant services. Yet, I see this complexity as an incredible opportunity for the restaurant industry.
My experience tells me that it might be in the best interest of the restaurant community to "raise the complexity" of the customers' food buying options. I say, we focus our energy toward gaining more of the consumers' grocery dollars. Not all of those dollars, but at least some of them. The question is, which dollars and how do we get them?
In my view, up to this point in history, as restaurant operators we have failed as a group to maximize the use of our existing assets. And yet right in front of us, there is market opportunity in catering and off-premise sales worth billions of dollars in incremental revenue for the restaurant industry.
So, what can we do beginning tomorrow at every restaurant, in every city in the world?
Begin to shift considerable focus and energy toward all of the activities of where your current, past and future customers live, work and play. Design a marketing campaign and menu for each of those occasions. After all, more services means more sales, but only if we are going to do it right.
More well-known brands have the benefit of a built-in following of loyal customers, and because of this consumers will continue to trust and believe in the brand promise and products — whether consumed in-store, at the office or at home. That's a really big thing for everyone.
What makes the case for catering even more compelling is that this off-premise increase in sales will complement the "swells" of our daily operations. In this business, your products and services are out the door before your restaurant daypart gets into gear.
Now, before you go running into that big catering wall in front of you, don't get confused between takeout, dine-in, curbside and catering. These are all very different products and services and your customers will come for each of these reasons if you do a good job at designing the experiences.
Focus on the language. That's the hardest part.
Takeout and catering can be offered for both pickup and delivery. And don't underestimate the complexity of distribution. That complexity is a good thing because not only will your customers spend more money with you, but also your food will be out the door on its way to your customers long before your retail business gets slammed for the day. So you can actually do both.
Let's consider the consumer mindset toward catering as an "off premise" experience for family gatherings, athletic events, birthday parties and office meetings, just as some examples.
Each of these occasions can be a segment of the catering market from the perspective of the restaurateur. The decision by our customers' to purchase our products and services will completely depend on our ability provide a predictable and scalable experience, to fill the desire of that customer for that occasion. So, what's the experience? A "one size fits all" approach? That just won't work.
To grow catering sales, find new markets within your existing geographical location and communicate a new message to those markets. To do this, you must change your language, move your products around, change your manufacturing process and make catering a compelling experience for your employees and your customers.
The restaurateurs that I know that are doing it properly are seeing sales traction like they've never seen before. That only comes through conversation and slowing down long enough to ask your customers what they want from your brand.
Sometimes, they don't know what they want until you tell them. Let's talk catering.
Erle Dardick is a 15-year catering veteran, business turn-around expert and author, and is best known for helping multi-unit restaurant executives create successful catering revenue channels. Erle founded MonkeyMedia Software to provide catering solutions to multi-unit restaurant operators. He also is the author of "Get Catering and Grow Sales! One Monkey's Perspective: Catering Defined for the Multi-Unit Restaurant Executive."