The Restaurant Biz Blog

Is HR The Next Hot Topic In Restaurant Software And Services?

As restauranteurs we have to do two things very well: find great product and serve it. Both of these tasks involve human interaction and that means managment duties, fortunately or unfortunately. Thankfully we have web-based support mechanisms like inventory management tools and labor scheduling functionality. The features of theses solutions create a lot of effeciencies, true. We get help configuring our businesses so we are notified when schedules are not consistent with our sales goals or if inventory is low. And although we are serviced by these tools, again thankfully, one question that digs deep into both of these matters is the human side... How do we know we are working with the right people?

Now, if someone had a perfect answer to finding the BEST vendor or MOST MOTIVATED employee then no one would ever be fired. Alas, there are solutions gaining ground to solving this ever persistent challenge. Yet, the challenge remains...

Two studies, one from academia and the other from professional management consultants, tallied up the "human resources" concerns in and about the restaurant industry.

In the study "Job Satisfaction, Life Satisfaction and Turnover Intent of Food Service Managers," Professor Richard Ghiselli of Purdue University's Hospitality Tourism and Management Department discovered working conditions impacted restaurant manager to the breaking point. Ghiselli uncoverd an exodus. By the time many restaurant managers reach their forties, they have probably left the industry.

And...

According to the 2005 Datassential Operator Survey, when “decoding the profit and loss puzzle for your restaurant customers, it’s important to keep in mind that labor is nearly as large an expense as the food itself.” In fact, hiring and retention has replaced food prices as the top worry for restauranteurs”, says Hudson Riehle, Senior Researcher at the National Restaurant Association.

Lastly, in the popular Fohboh.com blog, the situation is summarized very well. Imagine the following case:

Number of restaurants in chain: 100 restaurants
Average employees per restaurant: 75
Total employees (operating): 7,500
Turnover rate: 100%
New employees: 7,500
Cost per new employee: $2,500
Total potential cost annually: $18,750,000
Total cost per restaurant: $187,500
Projected sales per restaurant: $2.8mm
Estimated cost per restaurant: 6.7%
Cost per 1% of turnover: $187,500

So what's the answer? Like we started with, use web-based tools and stay tuned for enhancements to the WhenToManage suites of services. Secondly, take time to read these great posts by management experts in the restaurant industry. They talk not just about the technology side, but emotional part of our brains...

Things We're Following: The Blogosphere, Retail News And More...

Newsworthy data stories come in many forms. As you can imagine, we follow the data "news", but other articles and blog posts pique our interest too. Below are a few restaurant and retail technology stories, and some clever stuff too...

VSR Innovative Solution Award Winners Announced at RetailNOW

The Retail Solutions Providers Association (RSPA) and VSR launched these awards in 2008. This past spring, the association invited the channel community to nominate the best multi-vendor retail and/or hospitality technology solution providers. Read more here for details, you just might find a solution to drive sales and improve operations.

Another Seth Godin Goody: Learn To Train Your Customers

"Yes, you can train them," says the marketing guru! Reward them in the right way, you will... Read more here...

Foresster Marketing: Are Location-Based Social Networks Fadding In Or Out?

Visit this Wired Magazine story to learn about why only four out of every 100 online adults have ever used a social service that tracks their locations — and only 1 percent use such a service more than one time per week, according to Forrester.

Finally, A Must Read Blog: Stuck Serving... Funny Stuff!

Everyone in the service industry has a few hundred stories to tell. It is partly why we do the work we do. So many funny reads here... Enjoy!

RESTAURANT EMPLOYEES EMBRACE ONLINE SCHEDULING SOLUTION

WhenToManage uncovers communication trend: web-based scheduling application fosters increased collaboration and productivity in the restaurant industry

WhenToManage, the leader in real-time, online reporting and integrated point of sale (POS) business analytics solutions for retailers and restaurants, released the results of a nation-wide user survey proving the critical value of online labor scheduling. Operators, faced with multiple employee scheduling demands, using the web-based communications and scheduling technology, can now more effectively optimize employee-to-management information sharing through a fundamental improvement to the labor scheduling process.

The 2010 Survey of WhenToManage Online Employee Scheduling Users, a national web-based survey of over 700 online restaurant employees conducted throughout June and July, found that 90% experienced improved communications to the point where they would highly recommend the application to employers. Over 70% of respondents stated the seamless communications, enabled by the application, increased productivity through improved workforce collaboration. The survey findings highlight new thinking about personnel management in the restaurant and retail industry. The data posits that increasing employee engagement through seamless and interactive scheduling technology makes for more productive employees and efficient scheduling procedures.

“We were very pleased at the overall survey results. The fact that 90% of employees would recommend WhenToManage to future employers says volumes about our tools. Many of them commented saying that it ‘totally opened up communication,’” said Jeff Schacher, CEO of WhenToManage. “We discovered that many of our employee users ended up being the power-users of our technology. They are one of the driving forces behind adoption at their restaurant. Frankly, because WhenToManage is so easy to use, we believe it will reduce the headache of employee management now and in the future. Some personnel matters will go away leaving more time for essential management duties resulting in happier employees to boot!” said Schacher.

Employees using the application can review their schedules and manage availability requests from either the internet, email or mobile text messages. Using secure log in functionality, employees interact with the system by requesting days off, set preferred shifts, update availability and swap shifts with other employees. Employee requests are then sent back to the store manager for approval. “With employees having less time to accomplish more, the online scheduling application addresses key productivity challenges by opening up communications and encourages employees to work together. This key development keeps the entire operation running smoothly.” Said Schacher.

Restaurants, Dining Experience and Marketing

Restaurants are a common new business venture but unfortunately, they also have a high rate of business failure.

We ask ourselves... what are the reasons people go to restaurants? Dining out is more than just going for food. In many situations, dining out means a social event or an entertainment experience. The overall atmosphere within the restaurant has a large impact. The manager or owner of a restaurant needs to have a focus on the customers' entire dining experience.

Many times, dining experiences are designed to impress someone, say a new date, a prospective client, or friends. A restaurant manager or owner should consider adding little things that the customer does not expect. The enhancement a restaurant gives its product or service before offering the product to customers. For instance, some restaurants that have targeted children have done an excellent job of creating a theme. The same is true for adults. The mood that is set by the restaurant has a significant impact on our perceptions--wall colors, lighting, furniture, background music etc., all impact the dining experience. The important thing for the restaurateur to understand is that the restaurant success depends as much about the experience as on the food. Central to marketing efforts is the concept of creating the experience that you desire the customer to have.

Every person who enters a restaurant has expectations--here are some of these:

• Clean facility--food and restrooms. 
• Prompt service attention--many times people are going to a restaurant for convenience, speed of service and to be cared for.
• Friendly service--people want to feel welcome and appreciated.
• Convenience--food delivered in a certain amount of time.
• Food quality--consistency.
  
• Quick resolution of the bill.

Every restaurant should have service standards. And training is a big key. The business owner must establish the standards of performance in the business. Left to chance, it will probably not be as desirable as if the business leader creates the experience.

Develop a list of measurables within the restaurant, develop standards for each one, provide training to ensure staff is prepared to meet the objectives and, finally, provide a method for measuring and reporting actual performance in relation to desired performance. Additional reinforcement in behavioral science, the presentation of a stimulus following a response that increases the frequency of subsequent responses, whether positive to desirable events, or for this type of program can be provided by linking feedback or bonuses, both financial and non-financial, to actual performance.

A restaurant grows by generating positive word-of-mouth advertising. Dining establishments develop a reputation, which is the ultimate indicator of future success. No amount of radio, TV and newspaper advertising can overcome a bad reputation. A great reputation, properly maintained, is a fortress that will protect the success of a restaurant.

Word-of-mouth advertising, or buzz, will develop on its own. However, the most proactive approach is to plant the seeds of a great reputation. Here are some strategies to accomplish this.

• Attract influential people (local celebrities, early adopters, leaders)
• Emphasize events and celebrations with special programs
• Offer gift certificates--use them to cross promote the business.
• Get the media involved--get some good press.
• Spark lunch traffic with local businesses and organizations in your local area, think about a "Company Day" where you offer a specific discount to company employees on a specific day.
• Do "date night" promotions--work in conjunction with other businesses to offer a more complete package (i.e., dinner and an movie, etc.).
• Use coupons effectively. If not done effectively they can hurt your business instead of helping your business
• Develop a "valued customer" database to prompt recurrent/forming dining habits.

And don't forget about using Social Media to help promote this, Facebook, Twitter, blogs, Linkedin and YouTube to name a few. Social media marketing has become one of the most advantageous avenues by which a business can attract new customers while also maintaining strong relationships with existing clients. By creating a more personal relationship with these customers and clients through social media outlets your restaurant can develop greater brand awareness, build strong networks and establish a loyal following.

While social media does require a time commitment the benefits of exposure it will generate for your business followed by increased traffic and new opportunities is well worth it.

Re: Why Are Restaurant Operators Such a Hard Sell?

I just read Michael Atkinson's post on Fohboh.com called "Why Are Restaurant Operators Such a Hard Sell?" He was talking about how resistant restaurant operators are to adopt new technology and processes.

That really got me thinking about the very question he asked. Why is it that way? I have a theory, let me know what you think.

The Management Mind Life Cycle

• Stage 1: Party Time - a new restaurant opens or a new general manager comes in to an existing restaurant and they are energetic and ambitious to grow their business. They throw money and time at different ideas to get people in the door and drive revenue (managing costs often isn't even worried about until later). 

• Stage 2: Party's Over, Now What? - the party can last a week, a month, or a year. But when it's over it's over. Staring  at an empty restaurant, the operator looks back at their success and says, "I either have to spend more time and money doing what I was doing or I need to try something new."

• Stage 3: Rinse and Repeat and Repeat - owners and managers will try and try new things in an effort to repeat their previous success. (for some science behind this behavior look at "schedules of reinforcement" - I know I'm a geek)
  
  After each failure they become more and more cynical of trying new things and eventually they just resist any kind of change because the last 10 things they've tried haven't had any benefit.

The Big Secret
Well it's not that big, and it's not that secret, but the secret is MEASURABLE ROI!!! The only way to know the return on your investment is to measure the effectiveness of your investment. Of course people get burned out and defeated trying to repeat prior success if they don't really know why they were successful. Maybe the money spent the first month didn't actually bring anyone in the door, but it was the fact that their nearest competitor was closed for renovation. Imagine how empowering it would be to know why something is working or not working. It makes business decisions so much easier.

So I think the only way to really attack the problem of the resistant operator is to educate them or re-educate them on ROI. With all the new web-based software companies, an operator can try a new solution for very little investment of time or money and quickly see if it solves their problem or not. 

I am hopeful that these sluggish restaurant operators can be re-energized and empowered with a few chats on ways to follow their money out the door and ways to watch if it comes back in.

 

Restaurants using social media successfully

I just read a good article called "Where fine dining and social media meet"

It offers some good success stories of restaurants using facebook and twitter to build followings and to promote offerings.

The article also mentions Foursquare (a location-based social network), which I'll talk about in a future post. But I'll tell you that the right bars and restaurants could definitely do some valuable things with Foursquare.

Social media will certainly evolve, but it's not going away. The good news is that those late to the game can catch up fairly quickly and start reaping the benefits that the early adopters are seeing.

I wrote an article in the spring about getting started with social media for anyone looking for help on getting twitter, facebook, or a blog up and running.

Is Pizza Hut's iPhone app a success?

The Pizza Hut iPhone app has been downloaded over 100,000 times. What does this mean for them? How will it affect their sales? How do I get an app for my restaurant? These are the questions that come to mind.

Well first things first. It's a great looking app. The design team that put it together did an excellent job. It's sexy, fun, and functional.

So what does a great looking app get you? Well, it gets you 100,000 downloads. The ease of adding an app to your iPhone means there is no time or effort barrier. So once the social media crowd starts chirping about this cool new app, everyone wants to check it out. Then they show their friends, and then their friends have to get it, and so on until the idea is "so two weeks ago", then they move on to the next new thing.

However, the effects from taking a quick ride on the social media popularity train can be lasting. First of all you have brand exposure. People that haven't thought about Pizza Hut in years are suddenly showing their friends this fun new app they found. Secondly, the quality of the look and feel says something about the brand message. Perhaps getting someone to "try them again." But they will have to execute well to keep them.

So will any iPhone app work? I don't think so. I'm skeptical about the success of the Burger King app that was released a few months ago. The biggest issue I see there is that I can't see someone ordering fast food from their phone when it's probably faster to go through the drive up window, but I do think that they could see success with something else that isn't about ordering food.

I look forward to seeing the sales numbers for July and August. It will be interesting to compare iPhone orders to overall sales. While I think there will be some bump in the iPhone channel directly, I think the "brand buzz" will elevate all sales.

The Johnny Rockets Talent Show

In an effort of full disclosure, I will admit that I love to eat at Johnny Rockets and I used to be a Broadway wannabe.

I was very intrigued by the new Johnny Rockets campaign. They are partnering with the studio behind the new "Fame" movie and promoting a talent contest called "FAME National Talent Search." They are encouraging their guests to show their talents either at contests in Six Flags theme parks, or guests can submit videos on myspace.

I like this new campaign for a few reasons:

1. It pairs food with entertainment - Some of my best meals have only been heightened by the music playing. From burger joints to steak houses, the ambiance created through thoughtful music, decor, menu design, and food presentation makes a memorable impression when done right. Food at any level can be creative and artistic and is made even better by pairing it with other artists.
2. It fits their brand - For any unfortunate souls that haven't experienced Johnny Rockets, it's a 50's style malt shop with burgers and fries. To me that says Americana. And like it or not, America has been devouring talent shows like American Idol, America's Got Talent, and So You Think You Can Dance for several years now. We like to watch the underdog with a dream have a chance to rise to stardom.
3. It's unique - Now there's nothing unique about a restaurant franchise partnering with a film studio, but this partnership is certainly different. I suspect that they hope to use social media to bring together a community to help judge the talent. While it's not a campaign to bring people in the door per se, I do think it's a great way to insert their brand into new conversations online and elsewhere.

Time will tell if this is successful, but I have a hunch it will work out well for them.

Does "free" still work?

Global Warming or Global Marketing?

I saw this on NRN this morning.


So my first thought was... do restaurants really care about global warming or do restaurants care about their guests who care about global warming? The tough thing about the restaurant industry is that it's hyper-local. The people eating in your dining room are your neighbors in most cases. Large chains have a challenge to be both local and widespread in appealing to their guests, but at the end of the day it's all about attracting your neighbors.

What better way to attract your neighbor than clinging on to an issue that your neighbor cares about? But then you have to figure out a way to let your neighbor know you're supporting it.

It's easy for the big chains...


But even the independents can get in on it...


Taking a public stance or featuring a promotion on any issue can be risky, it has to be sincere and can't be too gimmicky.

Guests can look at it two ways, they can be cynical and see the restaurant promotion as a typical marketing ploy, but I think most will appreciate the fact that their neighborhood restaurant is bringing attention to a cause they support. But the ultimate success of any campaign will be determined by how well a restaurant knows its neighbors.