#85 Customer Relationship

Home Consulting Services $$ Saving Software Newsletters Marketing About Us

Doing business in the Caribbean USA and Canada chris@ro-i.com Located in North Vancouver, BC

Toll Free: 1-866-618-3030 604-618-3030

Since 1998

Doing business in USA and Canada chris@ro-i.com Located in Vancouver, BC

Toll Free: 1-866-618-3030 604-618-3030

FOODSERVICE OPERATIONS INFORMATION FOR THE HOSPITALITY INDUSTRY by R.O.I.

www.ro-i.com

(ISSUE #85)

Feature Article:

The Customer Relationship

Lately everything I have heard about marketing talks about creating a customer relationship. It takes $1 to bring back a customer but it takes $100 to create a new customer. By creating this customer relationship you are keeping your base clientele coming to your location instead of you being one of many operations that your customer can go to.

Customer Relationships = Customer Loyalty

The best place to see customer relationships in practice is in private clubs. I have a client that is a private club that I occasionally visit on site. When I walk around with the President he acknowledges each member and often stops and talks to them. The food and beverage manager does the same, as does the chef. They all have a relationship with their members. This relationship is cultivated so the members have maximum enjoyment of their club. We need to do the same in all hospitality operations.

So how do you have a relationship with your customers. Lets have a look at two operators who do a great job at it. First, an owner/operator chef. This owner who understands how to take care of his customers. He greets them, talks to them at the table and becomes a friend. Everyone who has eaten at the restaurant instantly becomes a friend and from these relationships the owner has maintained a busy restaurant for many years.

The second operator is an owner with 5 or 6 very busy restaurants. With in ten minutes of my party sitting down in one of the restaurants we had the hostess chat us up, the manager and then the owner. He just stopped to check in with us to make sure we were well looked after. Here is an owner running a very busy restaurant company yet he takes the time to create relationships with customers. No wonder the company is so successful.

So how do you start to build this customer relationship? Let’s look at retail to show us everything they do that we should be doing and most don’t. A sales person in a high end clothing store will have full information on each of their customers from all the usual to their favourite colour and shoe size. The COMMISSIONED sales rep doesn’t wait for their customers to walk in the door rather they remind them to come in with birthday cards, Christmas cards and phone calls. They pursue a customer to say we just received a new shipment of Chanel suits and there is a blue one that would look smashing on you. This is the standard in retail. In the restaurant business the standard is “Thank you, come again” as the customer walks out the door.

The first thing you need to do is start to create a database of your customers. This database simply needs to have the contact information in it so you can contact your customers. Your Twitter and Facebook accounts need to be a part of this database creation. How many restaurants do business card draws and never use the information gathered? How many have Open Table and never pull the database of customers off it to use? How many have started a database list but never stuck with it to see the payoff? In higher end restaurants we hear about calling the husband to remind him his anniversary is in a week and he hasn’t made a reservation yet. Can we make the reservation and what type of wine would you like open at the table when you arrive (or now with drinking and driving can we offer you a discount on a limo rental and have the wine in the limo for you to enjoy on the way to the restaurant). Sadly, too many operators put marketing their business low on the to do list and never focus on it or, even worse, delegate it. The number one job of an owner is to drive people through the door so that the staff can take care of them.

Now that you have a database you must take the time to use it consistently and effectively. Your customer contact must be personalized, have some type of expiry date and an offer to get the customer to come in. An offer does not mean a discount it simply must be something that entices the customer to come in. It could be you have managed to purchase a great Beaujolais Nouveau that is only available to our special customers. You know your customers and the type of operation that you are so tailor your offer to match. The most important part is the redemption. You need to keep track of who is redeeming the offer for two reasons. The customers that redeems the offer you then need to create a new offer to get them back again and you need to sweeten the pot for the customers that did not redeem so you can get them in as well. Now you are creating a targeted relationship with your customers.

Probably the most important task an owner/director of operations/general manager/chef (in other words the people at the top) can perform is, get this, talking to customers! This creates a relationship. When we are close to or at the top we spend our time managing our managers, paying bills and running our business. The task of talking to customers falls into the hands of our floor staff. This worked really well in the old days when we all had line ups at the door every night but that is not the case any more. Customers want to be recognized and feel like they have a relationship with you, servers can come and go but you will always be there to take care of them. When everyone is “good friends” with the owner you know you have done your job.

Where we see operations fall down all the time is regular customers versus a new customer. I’m sure we have all seen it and experienced it. You go to a restaurant for the first time, sat and then in walks a regular. If feels like a vacuum cleaner has been turned on because every staff member is making sure the regular is taken care of and you are forgotten. A golden rule that must be imparted to all staff is everyone is a regular and everyone is a VIP member. If the first timer is ignored or not as much attention paid to they will never become a regular!

There is a great mathematical equation that goes along with customer relationships. The greater the customer relationship, the more mistakes you are allowed to make. A customer who feels they have a relationship with you will allow for mistakes and keep coming back but if you don’t have a relationship with the customer then even minor mistakes become a big deal and the customer may never come back.

The act of marketing right now is in a state of flux with the old reliable methods no longer effective and the new methods yet to mature so create customer relationships and market your business very effectively within a tight budget.

Reservations:

Many busy restaurants don’t take reservations or on a limited basis. Is this right or wrong? If you want to build customer relationships then taking reservations help because they are guaranteed a table. If you always have a line up at the door you don’t take reservations because you can’t turn the tables as fast. A reservation is a guaranteed sale so does it not seem smart to take a guaranteed sale? It is a tough question with no right answer but with business not being what it once was is it time to revisit your reservation policy and see if it does not need to be updated.

News Flash:

Google has bought Zagat with the intention to add to Zagat by creating an online reservation system to compete with Open Table. This is very good news for the restaurant industry as competition often means the price will go down. If Google can do a better job and less expensively it will be great for customers and operators alike.

SITE(s) OF THE DAY:

http://www.netplaces.com/home-business/selling-your-product/relationship-marketing.htm

This is a great article on relationship marketing and has links to other articles on marketing. Education is a great thing and the more we read, the stronger we can become in developing marketing programs and customer relations.

QUOTE OF THE DAY:

"At a car dealership, the person who sells the car is the hero, and also gets the commission. But if the mechanics don't service that car well, the customer won't return. ”
Roger Staubach

Lets restaurantize this quote:

“At a restaurant, the person who serves the food is the hero, and also get the tip. But if the cooks don’t cook the food well, the customer won’t return.”

Upcoming Foodservice Storms:

Going Green and Nutrition are probably the two largest areas that will create an economic impact on the hospitality business. Nutrition will end up being mandated for all restaurants whether it be now (in some states for larger organizations) or in the future nutritional analysis on all foodservice menus is coming. In BC it has already been discussed at the provincial government level but thanks to lobbying by the CRFA it has been stopped for now and in the US it looks like it may become federal law. Instead of waiting, start your Nutritional analysis program now which gives you a great amount of time to implement fully without huge costs of trying to do it quickly. As a side note, Optimum Control Inventory Software will have full nutritional analysis in it’s next release (Version 4) due out in the fall.

I recently attended a meeting put on by the City of Vancouver who want to be the greenest city in the world about all businesses going green. Representing the hospitality business it was my position that hospitality operators have a desire to go green as long as it does not cost money! As an operator, starting a going green campaign can only help your operation especially if you are creating green programs that you can market to your customer. Rooftop gardens, food waste disposal, water reduction and green cleaning chemicals are a good start to greening your operations. If we can show as an industry that we are voluntarily greening we are much less likely to get hit with expensive regulations that force us to go green.

US Statistics:

http://www.restaurant.org/research/ind_glance.cfm

We have had requests for US statistics and can not find up to date ones but we did find this industry at a glance page from the National Restaurant Association web site.

Statistics Canada Information:

Monthly receipts for restaurants, caterers and taverns, by province and territory.

http://www40.statcan.ca/l01/cst01/econ92.htm

If this link doesn’t work, copy and paste it into your browser.

Suggestive Selling Seminars:

Over the past three years we have trained staff for a group of pubs on how to suggestive sell. In talking with the owner he states that it is very obvious from his secret shopper reports who have gone through the seminar and who haven’t. Three years ago they sold almost all house rye, now they sell almost nothing but Crown Royal!

Proper staff training through our seminars creates REVENUE! If you want to improve your revenue have us come in and train your staff on how to sell. For further information contact Chris at 604-618-3030 or email at chris@ro-i.com.

Guest Speaking:

Chris Wadham is available for Guest Speaking engagements for your next convention or meeting. Chris has spoken to various groups including large corporations, universities and restaurant chains. If you need a guest speaker for your next event please do not hesitate to contact Chris at 604-618-3030 for more information. Subject matter ranges from doubling your sales in four years to creating the perfect menu.

WHAT R.O.I. DOES:

R.O.I. is a full service Hospitality Operations consulting company. If your company WANTS TO BECOME MORE PROFITABLE then you should be talking to R.O.I.. For more information simply e-mail us at chris@ro-i.com, visit our web site at www.ro-i.com, call us at 604-618-3030 or toll free 1-866-618-3030.

ROI currently has clients in Las Vegas, Santa Monica, Mexico City, Victoria, Whistler, Vancouver, Kelowna, Saskatoon, Winnipeg, Toronto, Seattle and Idaho.

Any articles may be reprinted to your hearts content as long as you kindly ask us first via email.