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Archive | October, 2010

Restaurant Marketing Trends: Do You Have A Leaky Bucket?

Restaurant Marketing Trends: Do You Have A Leaky Bucket?Think of your restaurant as a 5 gallon bucket.  Every day you fill that bucket with customers.  Sometimes there’s a steady flow, sometimes it’s just a trickle, and sometimes it seems like a flood.  No matter what kind of day it is, every customer flowing through your doors grades their experience and makes a decision on whether to come back or not.

The fewer holes you have in your bucket, the more customers you retain, and the more likely your bucket is to be full on a daily basis.  After all, you don’t need much of a flow into your bucket if it’s already over half full.  The Restaurant Marketing Group recently released their annual Leaky Bucket Report, which studies in-depth the most common holes in the major restaurant brands around the nation.

The trends in this year’s report probably won’t surprise you, but that doesn’t mean there aren’t some lessons here to take to heart.  According to the Leaky Bucket Report, 36% of respondents to the survey cited price and value as a reason for not returning to a restaurant.  That’s an 11% increase in a single year.  Restaurant Marketing Trends: Do You Have A Leaky Bucket?

Customers are looking for value.  That means good food a great prices.  Fine dining has been getting killed in the current economic climate.  In fact, anybody who is viewed as too expensive is headed for disaster (think Starbucks).  Undoubtedly you have seen national chains like Applebee’s roll out prix fixe dinner menus and other deals on traditionally pricy food (like steaks) at cut-rate prices.

Quality service rose 10% to 23% as a reason for restaurants to leak customers.  The most interesting thing about the 2009 report is that location declined 7%, the first time a restaurant’s proximity was less important to customers in years.  It appears that customers are saying “Give me a good price and great service and I will travel a few extra miles for it.”

The good news is price and service are two things a restaurant can control, as opposed to location, which most cannot.  These are truly trying times for anyone in the restaurant industry, but it appears that those who chose to focus on the basics of good restaurant management, i.e. good service, good food, and good prices, are going to be the ones who survive the downturn.

In the end, the causes for leaks in your bucket are always the same; the only difference is that in times of growth, the stream of customers into the bucket masks the leaks.  When that stream fades to a trickle, it’s what you’ve managed to save in the bucket that will get you through.

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What Are Your Restaurant’s Perks?

The Stew blog, written by the Chicago Tribune’s food beat staff, posted an interesting article recently talking about the little perks that make a restaurant meal a more pleasant experience.

Yet as great as these perks are, they seem pretty generic – best practices that any restaurant worth its salt should employ.  What about the perks that make coming to your restaurant a completely unique experience?

Great service, a killer menu, and a nice atmosphere are the three things every successful restaurant has.  Most of the time, these are the things you do very well as a restaurateur, but that doesn’t mean you’re the only one around who does them well.  Developing an X Factor, a thing that makes your restaurant unique, is what sets you apart from your competition.

That means you give your customer some intangibles (or perks) they just can’t get anywhere else.  Everyone should have purse hooks and reading glasses, and if you want families to ever return to your establishment, some crayons and paper are a must.  These things make up a baseline of quality service good restaurateurs already meet.

What makes your restaurant different?

Here are some ideas that many restaurants have had success with:

The cult of personality.  This one has worked well for some celebrities, especially washed-up athletes.  It has also

What Are Your Restaurant’s Perks?

Jake La Motta (portrayed by Robert Deniro) had a successful Miami restaurant

worked for people who are not celebrities.  It works like this: the owner of the place gets to know just about everyone who comes in the place.  He asks about their kids.  He personally serves their second bottle of wine and jokes about the server with the guests.  He is the face and personality of the restaurant, and the perk for regulars is the familiarity they feel when they dine there.  That familiarity gives the customer a VIP feeling they can’t get anywhere else.

The tableside show. Magicians, belly dancers, comedians, mariachi bands – whatever the act is, this perk gives the customer an intimate show that adds an element of entertainment they can’t get anywhere else.  If you give your customers a choice between an enchilada plate and a band singing “Cielito Lindo” just for them before those enchiladas arrive, they’re going to choose your restaurant every time.

The VIP club. One of the hottest trends in fine dining is throwing “underground” events – chefs from well-known restaurants all over the country are picking an unusual setting (e.g. a warehouse, a wine cellar, etc.), developing a unique prix fixe menu, and inviting a select group of regulars to attend an exclusive one-time event.

You may not feel like going that far, but you can develop ways to create a club with an exclusive feel around it for your regular customers.  The funny thing about a club is that once others find out about it, they’ll want to be a part of it too – and the more people want to be in the club, the more valued the people already in feel.  The key is to give your VIP club perks that carry a lot of value.  A couple comped appetizers isn’t going to hack it here.  You need to provide something no one else can get.

Whatever perks you settle on for your customers, two keys will make you successful: make it unique and make sure it has real value.  It might be easy to copy someone else’s idea or cheaper to just offer a 10% off coupon, but your patrons will see right through half-hearted attempts to win them over, and in the end you’ll get what you pay for.
A genuine effort to reward your customers simply for walking through your door will have a lasting impact that is difficult to calculate.

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Chefs Say Cut Portion Sizes, Not Ingredients

Chefs Say Cut Portion Sizes, Not IngredientsOne of the biggest trends in food service these days is nutrition labeling for entrees and the development of “healthy” menu items that appeal to growing consumer concerns over what they eat.

A recent survey of 433 chefs conducted by Penn State and Clemson universities has shed some light on what chefs are thinking about the nutritional content of their menus.  In general chefs think cutting portion sizes, rather than adjusting recipes or ingredients of existing menu items, is the answer to developing a healthier menu.  Messing with already popular menu items is anathema to most chefs, which accounts for the reluctance to change recipes in order to improve calorie counts.

On the other hand, the same chefs surveyed overwhelmingly favored introducing a new reduced calorie item to their menus as opposed to altering an existing favorite.  There also seemed to be pretty solid agreement that a reduced calorie addition would be popular and sell well.  Chefs in general are still split on the question of menu nutrition labeling, however, with even numbers believing calorie data would help or hurt sales.

With increasing wholesale food prices and the ever increasing costs associated with managing and storing inventory, the trend towards smaller portions in restaurants probably isn’t going anywhere.  As the demand for “healthier” entrees increases, smart restaurateurs will find ways to dovetail the need to cut costs with the demand for reduced calorie counts on menus.

The marriage of these two seemingly divergent needs could be a win-win for restaurants.

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The IRS Wants You To Buy Restaurant Equipment In 2009

IThe IRS Wants You To Buy Restaurant Equipment In 2009f you have already purchased restaurant equipment in 2009, or are planning on doing so before the year is up, make sure you get your accountant to take a special 50% depreciation allowance for all equipment that is purchased, installed and used by December 31st.

This tax provision was extended by President Obama’s stimulus bill from 2008, and it provides an excellent benefit for restaurants that need to purchase new equipment but are tight on cash in a struggling economy.

If you’ve already taken the leap and purchased new equipment this year, congratulations!  You’ll be able to take this 50% write-off on this year’s taxes with no problems.  If you’re not sure if now is the time to buy, maybe this is the thing that pushes you into shopping mode.

That’s because this incentive is only good through the end of the year, and the kicker is that the equipment must be installed and in use by the end of the year.  You can’t just wait for December 30th and order the equipment you’ve been wanting and still qualify for the credit.  So now, with two months left, might very well be the right time to act.

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Kogi Is Kool – How One Taco Truck Is Taking LA By Storm

Los Angeles has long been famous for roaming taco trucks that service the myriad neighborhoods of this sprawling metropolis, serving classic Latino fare.L.A. is also known for its distinct Asian cuisine, which is often blended with more traditional American foods to create wonderful hybrids.

Well, now Korean BBQ, a hot food trend in America as it is, has met and melded with the classic Mexican taco to create a tantalizing blend of tangy, slightly spicy meats and sesame vegetables…in a taco. The menu was developed by local professional chef Roy Choi, a heavy hitter in the culinary world in his own right, and the result has been almost unanimously delicious. But the unique menu and tasty menu doesn’t even begin to explain why people are waiting in line for 2 hours just to eat a couple Korean tacos.

A combination of 21st century technology and a classic cultural icon have combined to make Kogi Korean BBQ the social phenomenon it is today.

The icon is the traveling truck that serves Kogi’s now famous tacos.

Kogi Is Kool   How One Taco Truck Is Taking LA By Storm

The Kogi Korean BBQ Taco Truck making the rounds in LA

Taco trucks have always held a special place in the hearts of L.A.’s denizens, and when the Kogi truck started showing up in hip neighborhoods, sometimes drawing crowds large enough to force a disperse order from local police, street cred was definitely cemented. The most fascinating aspect of the rise of Kogi is how modern technology has fanned the flames to make Kogi a phenomenon across L.A.

Co-founders Mark and Caroline Manguera use Twitter to alert Kogi fans on where and when the Kogi truck will be rolling through their neighborhood. Caroline maintains a blog devoted to all things Kogi, and is quick to comment whenever other food related blogs post about the Korean BBQ taco truck. And the company has a website and presence on other social networking sites like Facebook and MySpace. The full utilization of these cutting edge networking tools has resulted in a young, hip crowd of Kogi faithful that use the internet and their cell phones to locate the Kogi truck and descend upon it with their friends wherever it stops.

The fact that Korean BBQ tacos are genuinely good undoubtedly forms the core of Kogi’s success. But it is equally certain that a tech savvy approach to the familiar taco truck, a long-time customer favorite, has rocketed Kogi into the stratosphere of cutting edge food service concepts.

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Technology Trends: Restaurant Teleconferencing

Technology Trends: Restaurant TeleconferencingThe technology needed to allow a person to sit in one room and communicate visually and verbally with a person in another room somewhere else far away has been around for some time now.  It’s been imagined in the movies for decades, going back to Star Trek all the way up to Austin Powers.  But until recently teleconferencing was largely unavailable to the public.

Marriott Hotels have begun to change that with state-of-the-art teleconferencing suites in select locations across the country.  The investment started to make a lot of sense when the recession hit last year and businesses started looking for ways to slash travel budgets.

This isn’t choppy video on a laptop screen backed by lagging audio either.  Three large screens display the people on the other side in life size, and the connection speed is fast enough to eliminate any lag between audio and visual.  Already businesses looking to save on airfare have booked these suites despite the steep price ($500 an hour).
What’s in it for restaurants?  Well, if a hotel can generate stays with teleconferencing, then a restaurant can certainly sell some meals to the same crowd.  Morton’s Steak House is on the cutting edge of this trend, with teleconferencing capabilities in dozens of its locations across the U.S.

Of course, like most new technology, the cost to implement teleconferencing is beyond the budget of most restaurants.  But over time, those costs will come down, and more and more restaurateurs will be able to take advantage of teleconferencing as another service they can offer customers.
Even so, the market for expensive, quality teleconferencing between high powered business people isn’t exactly a large, untapped resource for most restaurants.  On the other hand, people are connecting online now more than ever, and giving them a venue to do so while providing a great meal may be a trend to watch in the future.

Services like Skype already provide an affordable way for people to communicate via video on the internet.  The production values aren’t the best, but that hasn’t stopped millions of people from using the service.

The point is that as communicating with other people remotely becomes even more ingrained in our culture than it already is, communal meeting points like restaurants will become a more and more popular venue for remote communications.  We’re not quite there yet, but the restaurateur who makes their restaurant technology friendly is going to succeed in the new era of communication.

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12 Restaurant Management Tips

12 Restaurant Management TipsOne area of the restaurant industry we have continually focused on here at The Back Burner is management.  I don’t have to tell you that restaurant managers are often overworked and under-appreciated, and that’s on top of the stress involved with trying to manage a business in one of the largest and most competitive industries out there.

These tips are meant to be useful tidbits that will make you a more effective manager, and maybe entertain/inform you at some point in your busy day.  Check them out when you have an extra three seconds of time and leave comments on your favorite posts!  Let us know what you think!

1.  How To Sell Your Restaurant – The time to sell your restaurant may come for many reasons.  Whatever the motives are behind this difficult decision, the process of selling your establishment needs to be handled carefully to make sure you get the right price at the right time.

2.  Why Buying Scales Will Save You Money- I’m not telling you anything new when I tell you that inventory control is very important in any restaurant.  But I think it’s surprising just how few restaurants view the use of scales as a way to manage shrink and really control how food product is used.

3.  Menu Pricing’s Theory Of Relativity – In a previous oldie-but-goodie Back Burner post I talked about menu engineering – how to put together a menu that effectively markets your dishes and makes customers want to spend more and buy high margin menu items.  One thing that post did not touch upon, however, was how to price and organize those prices on the menu.

4.  Restaurant Management: No Training Budget?  Spend Nothing But Time And Succeed – According to a new study by the Council of Hotel And Restaurant Trainers (CHART), 53% of the restaurants surveyed had cut back on their employee training budgets.  Only 19% increased their budget, with the rest remaining the same.

5.  California & Vermont Restaurants: Are You Compliant? – If you’re in the food service industry in either California or Vermont, then this blog post is for you.  New legislation in these two states changes the kind of faucets and pipe fittings that can be installed in restaurants and commercial kitchens starting early next year.

6.  How To Grow Your Restaurant – Without Going Broke – Restaurants are a business like any other, and as an entrepreneur, you’ve already taken the plunge into the risky but potentially rewarding world of business ownership.  Growing a business is never easy, and trying to grow that business in the current economic climate is even harder, which is why a few key principles for small business ring more true today than ever.

7.  Is Your Restaurant Truly Family Friendly?- According to a recent survey by the National Restaurant Association (NRA), 75% of restaurants offer a children’s menu and another 6.25% are considering offering one.  Most restaurants understand the need to cater to young families and accommodate them in every way possible.

8.  Restaurant Management: Use Creative Compensation Strategies – The traditional model has been to pay your kitchen by the hour depending on what they do, let waitstaff earn their living on tips, and maybe pay a hostess by the hour as well if you get too busy.

9.  Are You Ready For Flu Season? – Personally, if I never hear another story about H1N1 (swine) flu again, I’ll die a happy man.  Unfortunately, the grim reality is everyone is going to have to take steps to combat the spread of flu this winter, and restaurants are no exception.

10.  A Free Inventory Management Tool???  Where Do I Sign Up? – Count-n-Control is the brainchild of long-time industry pro Paul Clarke, and it’s a tool that is going to revolutionize how you track inventory in your restaurant.  No, Count-n-Control doesn’t have some crazy new way to track your stock so that shrink is 100% eliminated, and no, it’s not going to help you find the cure for cancer.

11.  Use Edible Scraps To Create Restaurant Family Meals – The “restaurant family meal” is a central event in many well-run restaurants.  Just before the dinner rush front of house and back of house staff gather to enjoy a well-cooked meal prepared by the chef.

12.  Management Styles – Micro Manager or Laissez Faire? – Your management style can have a lot to do with your success in running a restaurant, or any other business. While people can debate all day long about which is the best management style to use in different situations, one thing people will agree on, if you get it right (or wrong) it can have a big affect on the success of your business.

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Green Consumer Trend Still Going Strong

Green Consumer Trend Still Going StrongEvery restaurant has had to deal with revenue and expense challenges over the last year.  And many have probably wondered whether green practices and products in their restaurants are worth their while, both in terms of cost to purchase and the time it takes to implement new products and procedures.

If a new Harris Interactive poll is any indication, the answer is a resounding “YES!”

Consider the following facts from the poll:

73% said they buy green products
8% have reduced their spending on green products
26% have increased spending on green products
67% are spending the same amount

Even more intriguing, when customers were given a choice between Restaurant A, which featured green practices and products, and Restaurant B, which did not, they responded this way:

17% would choose A over B even if it meant a longer line
21% on top of that would choose A if the wait time was the same

So it looks like you can definitely attract new customers by greening your restaurant.  But what if this forces your costs up?  This is a common concern about green products, although as the market for environmentally friendly items grows, their prices come down.  Even if you do have to raise prices, consider this:

30% expected to pay more for green products
13% would pay 5% more
11% would pay 10% more

These numbers reveal a lot of wiggle room for your restaurant to adopt and advertise green practices.  And when you have such a clear majority of green consumers, your restaurant clearly needs to get on the bandwagon if it hasn’t already.  Check out The Back Burner’s Green Restaurant Tips for more information on greening your restaurant.

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Don’t Take Coffee For Granted

Dont Take Coffee For GrantedEvery restaurant serves coffee.  It’s one of those standard beverages that any food service establishment takes for granted: restaurants of all kinds have always served coffee, and will continue to serve it forever.  But unlike other standard beverages like Coke or Pepsi that are made by a third party, coffee is almost always brewed in house.  That means the quality standard varies widely from restaurant to restaurant, and any customer who orders a cup knows it’s usually a crap-shoot on how the coffee will taste.

With the rise of Starbucks and the rest of the specialty coffee industry in the past 10 years, consumer’s tastes in coffee have become more refined, even as most restaurants still employ the same old standard pour-over coffee machine they’ve always had.  And even though Starbucks has been getting killed lately as consumers cut back on $8 lattes, their taste for quality coffee remains.  The fact is, customers want a better cup of coffee at a good value.

Restaurants are well positioned to provide good quality for a good price, and serving good coffee can lead to better sales and better profits for any restaurateur who takes the time to invest in a quality coffee brewing system.

That’s because not only can you make a tidy profit on coffee sales alone, but customers who enjoy good coffee are more likely to order other after-meal items like desserts and drinks.  You can also use good coffee to boost sales during slow periods during the day like late afternoon.  A reputation for great coffee plus a few simple appetizers or desserts off the menu can become a popular afternoon happy hour very quickly.

So how do you brew great coffee?  Here’s some basics:

Water. Coffee is mostly water, so if the water you use doesn’t taste that great or is hard (full of minerals), your coffee isn’t going to taste that great either.  You should always use filtered water to brew coffee.  This is also important because a water filter will remove minerals from the water that build up in your brewing equipment and cause machine failures and bad taste problems.Dont Take Coffee For Granted

Temperature. The ideal brewing temperature for coffee is between 195 and 205 degrees Fahrenheit.  Water temperatures outside of this range can result in weak or bitter tasting coffee.  Use a thermometer to measure the water temp in your coffee machine.  Modern digital coffee machines allow you to adjust the temperature of the water with the push of a button.  Older machines may need to have parts replaced.

Time. This is the most important factor in determining how the coffee will taste.  The longer water is in contact with the coffee grinds, the more the soluble elements of coffee are absorbed into the water.  This is what gives coffee it’s taste, but the best tasting elements are usually absorbed at the beginning of the brewing process.  The longer water is in contact with coffee grinds, the more compounds that give coffee a bitter or strong taste are absorbed.

Clean surfaces. The surfaces the coffee comes into contact with inside the coffee machine and outside, like decanters, airpots, and cups, can all lend bad tastes to coffee if they aren’t cleaned properly.  The most common problem is lime (mineral) buildup in the coffee machine.  The best way to prevent this, as mentioned above, is to use filtered water.  However, these surfaces should be cleaned regularly to ensure quality coffee every time.

Coffee grounds. The granule size of ground coffee will affect how long it takes to brew.  Very finely ground coffee brews much more quickly than coarsely ground coffee.  Experiment with different coffee grinds until you find one that results in optimum flavor.  The depth of the coffee ground bed in the brewing basket also affects taste.  A bed depth of 1-2 inches is ideal.  A shallow bed will result in weak coffee.  A deep bed will make the water percolate very slowly, which results in bitter coffee.

Stay tuned to The Back Burner this afternoon as I will be posting the second half of this article, which will cover the coffee brewing equipment basics you need to know to make sure your restaurant is brewing good coffee every time.

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A National Tax On Soft Drinks?

A National Tax On Soft Drinks?Soft drinks are “liquid candy” that provide no known nutritional benefit to the people who consume them, according to the Center for Science in the Public Interest (CSPI), an advocacy group.  The epidemic of obesity that has swept the United States in the past 25 years, especially among children, is in part due to soft drinks.  All restaurants serve a variety of sodas as a staple on the menu.  Now the CSPI is calling for a national tax on all soft drinks, similar to the so-called “sin taxes” on alcohol and tobacco.

The CSPI has even set up a Liquid Candy Tax Calculator that allows you to see how much revenue even a 1 cent tax could raise for government health programs.  According to the Tax Calculator, $95 billion is spent annually battling obesity in the U.S.  While a soda tax may not solve the problem of obesity, it might at least make people think twice about buying soda on a regular basis and can raise millions, if not billions, of dollars for the cash-strapped federal government.

Some states, like New York, have already introduced legislation targeting soda with a tax.  A national tax would prevent a patchwork of local taxes from cropping up across the country.  The National Restaurant Association has yet to weigh in on the proposal, but (perhaps not surprisingly) the American Beverage Association has come out strongly against the idea, claiming such a tax would hurt American families.

The CSPI has proposed that the revenue be used to fund healthcare reform, a major item on President Obama’s agenda.  Judging from the size of the deficit, any help on the revenue front is better than what we have now.

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