Greetings!

This month, we cover off on several topics that operators need to be paying special attention to these days. At a time when more seats are chasing after fewer keisters, we start with an article on customer loyalty, presenting 12 ways that you can keep the customers you have coming back more often, talking you up to their friends and colleagues, and maybe even spending more when they get to you.

And while you’re working to build relationships with your customers, why not extend that good energy to your employees? After all, your staff is often the “first-line” protector of your brand and standards, and their job satisfaction can translate directly to your customer’s.

We also take a look at how to put your data into actionable form via Bill Taves’s discussion of “Finding the Right Recipe” for accounting and operational data. Following his advice to establish exception-based reporting can help you identify problems quickly and take steps to correct them.

To your success,

Dean and Danny

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Creating Customer Loyalty

The goodwill of regulars and other good customers has never been more important, and there are right ways and wrong ways to create it. (The owners of the Costa Concordia cruise ship, who recently offered survivors a 30% discount on their next cruise, might want to pay attention.)

According to a recent article in Ad Age, simple prizes are no longer enough to reward today’s sophisticated consumer, who is bombarded with opportunities for freebies, benefits, points and prizes at every turn. The incentives have to be more creative these days, whether or not they are dependent upon technology like social media, mobile apps and iPad scanning.

1. Chains should consider creating a menu item that speaks to the local market, as smash-hit Smashburger does with offerings like the Colorado (topped with grilled, fresh mild green chilies, melted cheddar cheese, pepper jack cheese, lettuce, tomato and mayo on a spicy chipotle bun) and the Brooklyn (a Reuben stand-in with grilled pastrami, Swiss cheese, pickles, onion and yellow mustard on a pretzel bun) in their respective locations.

2. Get regulars involved with menu decision-making by soliciting their input at the very least, and preferably inviting them to a tasting or even an in-the-kitchen R&D session—nothing makes people feel more special than being an “insider.” You may even find that their real-life insights are invaluable.

3. Investigate a formal loyalty program, which could be as simple as a punch-it card (or smart phone app) for Buy-Five-Get-One-Free, for instance, or as involved as a multi-brand setup like the Ultimate Dining Card offered by Atlanta’s Buckhead Life Restaurant Group.

4. Make sure loyalty efforts are concept- and demographic- appropriate. Several established brands—including Taco Bell, Red Robin and Quiznos—are teaming with loyalty-marketing start-up Plink to create a Facebook-based program that allows users to accrue credit toward social gaming rewards. Can you say “appeals to core market of twentysomethings”?

5. Wooing back customers with a special LTO meal deal can work—provided it’s done in a way that doesn’t erode brand value—as Red Lobster is proving with its four-course, $15 Seafood Feast. The success of the promo inspired a similar $12.95 program at Olive Garden.

Be cautious, however, with the price-loyalty equation: A recent COLLOQUY study suggests that these kinds of incentives can actually diminish loyalty by devaluing the brand.

6. Spend as much money as necessary on improving the guest experience. I hardly ever go to one of my favorite Italian restaurants because it’s too hard to park in the neighborhood—yet the restaurant’s cost for a valet or even an agreement with the bank across the street to use their parking lot at night would be more than offset by just one additional table a night.

7. On the flip side, even the smallest little nod to a regular’s status can create a big boost—for instance, having the chef come to say hello, or sending out a complementary dessert or after-dinner drink to thank them for their patronage. Other examples include prime seating or the chef creating something special for the table.

8. “Old-fashioned” touches like sending a birthday or anniversary card or email are still great strategies for building loyalty—and planting the seed to come celebrate the event at your place. Collect this information in any way possible, from asking regulars to fill out a card, to having a server let you know if a good customer is celebrating something.

9. Think twice before eliminating guest favorites from the menu, especially if it’s just because the kitchen is tired of making them. Switch out accompaniments, tweak the formula a bit, or offer it as an off-menu special that your regulars can request.

10. By the same token, do keep growing and changing if it means offering more value to the customer. Foursquare’s recent decision to include menu details in its restaurant postings practically guarantees more relevancy—and loyalty. It’s a great lesson for restaurants themselves to emulate; perhaps you can offer gluten-free menu items, for instance, or more specials (which also happens to be a great way to test core menu additions).

11. Do nothing to violate trust, which is the single most important thing you can offer customers compared to the competition. This can extend from the simple (don’t make people wait at the bar for a table if you can seat them immediately; make your menu as transparent as possible) to the philosophical (treat staff members well and pursue sustainable measures such as recycling or waste reduction).

12. Finally—and perhaps most important—treat all customers like potential regulars. As much as you offer perks to your VIPs, keep the spirit and quality of service and food the same for all.

For more loyalty-building ideas, contact Synergy Restaurant Consultants.

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Building Employee Relationships

If you think building trust, communication and empathy between management and employees is just a human resources issue, you can stop reading this article right now.

Successful employers treat employee relationships with as much care and thought as they devote to customers. Happy employees help make for happy customers—and who doesn’t want happy customers?

Unhappy employees? Well, for one thing they might quit, which could end up costing you an average of $7,000 per employee, according to the National Restaurant Association, in new recruiting, screening, training and other costs.

For another thing, an unhappy employee could also cost you customers. A recent study by management and marketing professors at two different universities found that when customers witnessed co-workers behaving badly to each other, they wanted to punish the company that employed them. The study’s authors theorized that this stems from a kind of personal moral code that includes how people should be treated, and that lack of respect to one another on the job is an indication that the employees are not being treated correctly by their employer.

It bears repeating that your staff members are your brand ambassadors, first and foremost, particularly in this era of social media, when many of your employees will be sharing Twitter and Facebook space with potential customers.

And keeping staffers focused, engaged and content can be a big challenge, especially in an industry that tends to go a little short on such “perks” as sick days, paid vacation, health care, and advancement opportunities.

In its new report “Optimizing Employee Engagement,” Technomic identified trust as the most important of four key factors in building employer-employee relationships, followed by clarity, common purpose and growth. Managers can help inspire trust in the following ways:

• Include employees in the decision-making process as much as possible by soliciting their ideas and feedback
• Give them the tools to do their job, be it training, or simple resources like enough cups to reset table
• Be open, honest and truthful; share company news and goals, both good and bad
• Adopt a problem-solving mindset; implement systems but don’t just do things because that’s the way they’ve been done in the past
• Provide relevant and consistent direction
• Help employees meet their job and career challenges
• Respect their private lives, including time for family, friends and other activities

For more Human Capital Solutions, contact Synergy Restaurant Consultants

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Accounting and Operating Data: The Right Recipe

By Bill Taves, Finance and Accounting, Synergy Restaurant Consultants

When you’re managing and monitoring the many facets of restaurant operations, it helps to have the right information at your fingertips. But what is the right information?

Systems today provide endless amounts of information. Too often accounting, reporting and point-of-sale systems offer hundreds of reports that can be overwhelming to understand and cause “analysis-paralysis.” The proper setup and use of both accounting and operational data can be a tremendous help to any operator.

Identify and Use Key Metrics

Idetifying the key drivers of your restaurant’s performance is essential to establishing sound reporting. There is more to learn about sales than looking at your income statement and comparing sales to prior year or budget. To be useful, any sales comparison should be measured by its key metrics: guest counts, average check, and sales mix.

This distilling of accounting data (sales) into operating data (average check, etc.) is critical, because accounting data is rarely “actionable.” Actionable data tells you where the issue or opportunity exists and can be a guide toward what needs to be done to improve operations and cash flow. For example, a common reaction to a sales shortfall can be to raise prices; without knowing the cause of the shortfall (for example, lower guest counts), however, raising prices could exacerbate the problem.

Budgeting and Planning

Budgeting is an essential tool in any business. Just like a road map (or GPS in today’s world), you can get lost without one. However, budgeting can often seem fruitless months down the road. That is often because the approach to budgeting is not founded using the same metrics that being using to monitor and report on operations.

A useful budget is founded on key operating metrics, such as guest counts, labor hours, and so on. A budget built from the ground using key metrics can be compared to actual results using those same metrics. This allows for a clearer understanding of performance to expectations and any corrective action that needs to be taken.

Exception-Based Reporting

The most efficient way to keep your fingers on the pulse of your operations is to establish benchmarks and thresholds using key metrics, and then design reporting so “alerts” are provided any time operations go beyond or outside of those benchmarks. Examples where this approach is commonly used include voids and overtime hours, but it can also be used for labor hours, sales, average check, promotional programs, and many more.

It is not necessary to produce a void report every day if you have an acceptable threshold for voids. Many reporting systems provide alerts in the form of an email or text that is sent when voids exceed a given threshold and thus require your attention. Using systems to inform you of a problem or “exception” can eliminate hours spent running through reports looking for problems.

Need help setting up any of your accounting systems or procedures? Contact Synergy for a free consultation.

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Tip of the Month

Looking for new ways to incent repeat customers without resorting to daily dealing and other price discounts? Check out this article on cnbc.com, which goes beyond Groupon to explore Strategies for Long-Term Customer Loyalty.

Beef prices in the U.S. are hitting record highs and are expected to climb over the next two years, as predicted by the USDA. In fact, experts expect a 10 percent rise in 2012 and 2013. Shoppers and restaurant owners alike are already feeling the pain from the price increases. A combination of factors, including severe drought in the U.S.’s most populated areas of cattle, Texas and Oklahoma, a weak U.S. dollar, and high foreign demand, have led to a high sticker price for Americans.

As a result, there is less meat on the store shelves and American consumers are opting for less expensive beef products like ground beef or select versus choice cuts of beef to cope.

How then, can a restaurant owner modify his menu to maintain profitability during beef price volatility? There are a variety of non-beef options to be substituted, such as pork and chicken. Also, consider these other beef alternatives:

 

• Lean ground turkey: hamburger restaurants should definitely look into offering turkey burgers on their menu. Seasoned and cooked properly, the turkey burger will present guests with a lower-fat and lower-calorie alternative. Further, the restaurant will be expanding to the healthy-minded consumer.
• Nuts, beans and legumes: no meat, but these ingredients can create a wonderful vegetarian burger. Nuts are already a great source of protein and some, like walnuts, provide earthy flavors (and meaty texture) – check out Whole Food’s lentil and walnut burger recipe
• Seitan: made from wheat gluten, seitan is popularly used by vegetarians as meat substitutes due to its meat-like texture when cooked and is high in protein. It’s also a common substitute to soy-based meat substitutes. Wheat gluten is has been used in vegetarian recipes in Asian for generations. Check out this seitan stir-fry recipe.

 

It’s also worthy to mention that cheaper cuts of beef should be evaluated. Many chefs have been looking into cheaper cuts of beef to substitute for the more expensive cuts like strip steak or rib eye. Chuck eye steak, for example, are tougher but with a good marinade, can become more tender and are best cooked medium-rare. Hanger and skirt steaks are relatively inexpensive and very versatile cuts to cook with. They have a rich taste and can be very tender when cooked rare to medium rare and then sliced. Learn more on how to cook hanger and skirt steaks here.

Are you interested in evaluating your restaurant’s menu for beef alternative dishes? Looking to optimize your menu around better margin proteins? Contact Synergy for a free initial consultation.

 

You’ve seen their commercials and ads, their emails arrive in your inbox daily, and you’ve even purchased a few specials from their sites. It’s those daily deal websites like Living Social and Groupon that’s got consumers hooked on finding killer discounts to everything from 2 for 1 skydiving to 40% at your favorite restaurant. As a business owner, you recognize the opportunity there is for obtaining new clientele, gaining more exposure and ultimately to raking in some decent profits.

Before you decide to take the plunge and offer a group discount for your restaurant  business, think carefully about your strategy. Unfortunately, while some find great success, there are many businesses that failed to do their homework and took huge unnecessary losses by offering a deep group discount to the public that they simply could not afford. Take for example a café owner in Portland who lost $8,000 for her Groupon offer, and this London bakery shop owner who took a massive $20,000 hit during her campaign.

Before considering utilizing a daily deal site to market your restaurant business, you need to consider several things:

1)      What item will you be discounting? It makes more sense to offer a discount for a unique menu item that is easy to prepare and has few ingredients. This cuts labor time and cost yet still presents an opportunity for upselling different menu items.

2)      How much of a discount will you be offering? This is a major factor into whether or not your campaign will succeed or fail. Typically, discounts on group deal sites can range from anywhere from 25 to 50% on average. Do your math and make sure your discount will cover the cost of ingredients, employee labor, AND the daily discount deal site’s fees (including credit card processing fees).

3)      There are many deal sites to choose from. The number of group buying sites has grown huge in the last few years. From Yelp! to your local newspaper, daily deal sites are everywhere. Do your homework and make a list of several and include the fees they charge, features they provide and customer service so you can make a smart and fair comparison.

4)      Provide a reasonable cap. How many half-off smoothie coupons will you offer? 200? 1,000? What is your restaurant capable of? Figure the math and tie it into the percentage discount you’re offering and cost of producing the item as well as the deal site’s fees.

5)      Strategize. You can add stipulations of your coupon that can help increase your profitability. For example, try making your coupon valid during your least busy hours of the day or throughout your slowest days of the week. This can fill your restaurant’s down time with more customers than you had before.

 

Do your homework and create a detailed plan- you may be able to find success using a group discount platform.

If you’re still interested in creating a group coupon, compare some of these sites to one another when doing your own research: Groupon, LivingSocial, KGB Deals, Spreebird, Plumdistrict, Dealster, Dealpulp, and Tippr. Don’t forget to ask if they service your city or county!

Whenever we explore restaurants, we are fond of finding those who know how to be efficient. This includes many areas such as front of house and back of house operations, guest service and being green.

We love restaurants that employ waste-reducing strategies because not only does it help the earth by reducing your carbon footprint, it also increases profits by spending less. What areas of your restaurant can you find easy savings? Let’s take a look at napkins. Like utensils, there is no escaping the fact that this is a mandatory item in every restaurant. But unlike disposable forks, spoons and knives, many consumers take many more napkins than they really need. One way to control this is by choosing an efficient napkin dispenser.

We all know what the typical napkin dispenser looks like and certainly understand how easy it is to pull out a massive amount of paper due to the large opening. The standard napkin dispenser design is simply prone to waste. But take a look at this wonderful product, the TorkXpressnap® – it’s “green” in that it only dispenses one napkin at a time, every time. It holds up to 900 SCA hygienic tissues and guarantees a 25 percent reduction in napkin usage. It also comes in space saving designs an ability to add custom print on it as well. Now there’s an easy way to save!

While there are surely plenty of hardcore meat-lovers in the United States, the number of vegetarians in the nation is on a steady rise. According to the Vegetarian Times study, there are 7.3 million (or 3.2 percent of American adults) Americans who are vegetarians and an additional 22.8 million who follow a vegetarian-inclined diet.

Further, a recent study conducted by Bonnie Riggs, of the leading market research firm, The NPD Group, forecasts five major influences that will continue to drive consumer behavior of diners in 2012. One key point is the higher consumption and demand for healthier and lighter foods.

The statistics alone cries out for the need of more vegetarian menu items at restaurants. We have to admit, your run-of-the-mill fast-food chain salad, typically loaded with high calories and fat, won’t always cut it in terms of flavor and nutrition.

Our recent work over at LYFE Kitchen exemplifies a wide range of healthy food for vegetarians and carnivores alike, without sacrificing taste. Let’s take breakfast, for example. Breakfast menu items anywhere usually conjure up images of soggy, buttery pancakes with sausage or breakfast sandwiches whose calorie count alone could fulfill your daily recommended value. Over at LYFE kitchen, a vegetarian breakfast burrito made of whole-wheat tortilla stuffed with red peppers, onions, avocado, baby spinach, chipotle aioli, cheddar cheese, your choice of scrambled eggs or egg whites; with salsa, served with fruit salad, is nutritious, delicious and just 496 calories.

For lunch, you may want to take a bite into LYFE’s classic burger – grass-fed beef or gardein*, organic romaine, tomato, red onion, agave pickles, agave ketchup and cheddar cheese on a multigrain bun – entirely vegetarian! A classic favorite, eggplant parmesan, works great for dinner – breaded and baked eggplant medallions, topped with pomodoro sauce, ricotta and five-cheese blend, served with garlic broccolini. Vegans also have many menu items to choose from at LYFE Kitchen.

 

Take a look at this blogger’s vegan experience at LYFE Kitchen.

 

“My fears were wasted energy because as it turned out not only would we be dining on all vegan dishes, one of our dining companions would be none other than Chef Tal Ronnen, one of the two Executive Chef’s at LYFE Kitchen!

Chef Tal told us that we were about to enjoy a meal that would be delicious, satisfying and coincidentally, cholesterol free. That’s right, zero cholesterol. Every dish would be under 600 calories and each would be packed with flavor.” Read on.