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Archive | May, 2011

How To Turn Coupons Into Restaurant Marketing Opportunities

Restaurant DiscountsDespite the fact that a majority of restaurateurs view discount sites like Groupon as the biggest threat to their business, and despite a lot of talk in the restaurant industry about how discounts devalue a restaurant’s brand, new market research reveals that coupons and deep discounts are probably here to stay.

The recession may be fading, but the price-based behavior consumers have become accustomed to over the past two years isn’t going anywhere.  This was the most interesting point made in a survey conducted by Radius Global Market Research last month.

According to Radius 86% of diners said they look for ways to cut costs every time they eat out.

The study went on to point out some areas consumers indicated would motivate them to dine out besides price, including:

  • More calorie and nutrition information
  • Social media promotions
  • More chicken, breakfast, and snack options
  • More premium burgers

Consumers also indicated that most of these factors are more effective for the quick service and fast casual dining segments, which leaves fine dining and independent restaurants with precious few ways to motivate increased visits from their regulars.  Besides, that is, coupons.

That’s depressing news for restaurateurs who had hoped to start moving away from discounting and towards a value-based approach – good food, great service, nice atmosphere.  All of those factors are still what make a successful restaurant, but if patrons aren’t coming in the door then there isn’t much chance to show off the things your restaurant does best.

If the hated coupon is indeed here to stay then there is only one way for independents to compete: jump on the coupon bandwagon.  That means if you’re taking a bath on a lot of discounts then you might as well find some creative ways to get as much as you can out of your penny-pinching customers.

Some ideas:

Get an email address. Don’t give coupons away for nothing!  While you would much rather get full price on check amounts, a discount doesn’t have to be a complete loss.  That email address can be worth a lot of extra visits to you if you plug it into an effective email marketing program.

Limit the coupon then work the upsell. Groupons aren’t going to allow you to give discounts on specific menu items or times of the week, and that’s why you should develop your own coupon program and cut out those margin-eating middlemen.

Send out your own coupons to regulars that gives a discount on your high-margin menu items then set your servers to work upselling on everything from appetizers and cocktails to desserts.  Alternatively, offer a blanket coupon, but only for the slowest night of the week.
Restaurant Marketing
Advertise to customers while you’re paying dearly for their presence. Those deep discounts hurt your margins but they do at least give you an opportunity to advertise yourself to a captive audience.  Menus, waiting areas, bathrooms, receipts, servers, and tabletops are all great areas to subtly but forcefully advertise how great your restaurant is and inform guests about upcoming events and deals.

Just because check averages dip every time you discount doesn’t mean you can’t get something of value out of all those deal-hunters.  Being creative with the ways you get compensated for providing a coupon can help you drive more visits in the future and help ease the pain of taking money off the bill.

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Klick Kitchen: Can Your Restaurant Save By Ordering Online?

Last summer I wrote about Klick Kitchen, an internet-based replenishment service for food service businesses.  At the time it struck me as odd that despite all the press Klick Kitchen had been getting, there didn’t seem to be any feedback from real chefs/managers/owners in the field who could substantiate Klick Kitchen’s claim that their service saves restaurants time and money when ordering food product from suppliers.  At $300 to sign up and a $30/month subscription fee, Klick Kitchen just didn’t seem like it could really save a lot of money, time notwithstanding.

Recently Billy Humble of Klick Kitchen contacted me wanting to discuss the new direction the company was taking, and he was gracious enough to spend some time with me on the phone explaining Klick Kitchen’s new approach.

Klick Kitchen is now free for restaurants to sign up and free to use. The company plans to generate revenue through paid featured listings for vendors and optional reporting services for members.

In case you’re unfamiliar with how it works, members who sign up get access to a list of vendors in their area, complete with real-time pricing and contact information.  The site allows users to contact their vendors to order and shop for new vendors very easily.

According to a recent press release quoting Klick Kitchen’s founder and CEO Jordan Glaser, the company can help restaurants because: “Even for chefs who are already ordering online, Klick Kitchen provides a central marketplace where they can order from all their vendors in one place using one system,” explains Glaser.  “With the new 3.0 innovations, chefs can further expedite ordering, reduce errors in the order process, find new products, stay on top of pricing fluctuations and keep well-organized records of their orders.”

Klick Kitchen is currently available for restaurants and vendors in the New York City metro area only, but they do have plans to expand at some point in the future.  The website has about 155 vendors and 60 member restaurants.
With all due respect to Klick Kitchen’s ongoing efforts to streamline the food product replenishment process for restaurants, my original question remains: do chefs and restaurateurs find such a service useful in their day-to-day operations?

Klick Kitchen’s press release features a glowing testimonial from a NYC chef, and I am sure there are other satisfied customers out there.  But how does the food service industry feel as a whole?  The company’s premise is that there isn’t another place to find a comprehensive list of food vendors by product, and that using Klick Kitchen save a lot of time that would otherwise be spent tooling around Yahoo or Google searching for vendors.

While that may be true, how many of you out there see a need for a service like Klick Kitchen?

Leave some feedback below!

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How To Improve Dessert Sales

Cheesecake - the Classic StandbyAny server will tell you the hardest thing to sell is dessert.  The meal has come to an end, customers are ready to go or just enjoy a cup of coffee, and more often than not the dessert menu is met with some pretty stiff resistance.  Add in a climate of tightening belts and reduced budgets, and restaurants are facing a very difficult dessert climate indeed.

That doesn’t mean you can’t have a successful dessert menu, however.  Tantalizing dessert items that are priced right and presented well can make for a very nice addition to your check averages.  All it takes is some investment in time and energy until you find just the right combination that gets your customer to go from saying “no” to “yes.”

Flavors: Exotic vs. Comfort

Exotic sounding desserts have been very fashionable for the last 10 years or so.  But it appears that customer’s tastes are changing to more familiar fare, and desserts are no different.  The flip side of that coin is coming across as too conventional, like cheesecake or vanilla ice cream.  By all means, serve these venerable stand-bys, but do so with a little attitude and flair.  Put some unique, and maybe even a little exotic, twist on your dessert offerings to make them feel fresh but not unfamiliar.

Sizes: Less Is More

Downsizing dessert options encourages customers to indulge a little at the end of their meal.  Quick, tasty desserts are the best way to get your guests buying.  Not only are more and more people health conscious these days, but also price conscious, and a trim but attractive little dessert addresses both of those issues.  Which leads us into the next component of a successful dessert menu:

Price: Less Is More Too

Single digit prices (i.e. $9 or less) are vital to selling desserts.  Since smaller portions are also more desirable, meeting this price requirement shouldn’t be too hard.  Standard pricing also makes the decision easier for the waffling guest.  Many restaurants set one price for all their desserts.  Some have also introduced tapas-style desserts: super small portions of inventive desserts that can be ordered individually or as a group (think 1 for X dollars or 3 for X dollars).

Training: Servers Need To Know Their Stuff

As with the rest of your menu, servers are going to be the key factor driving sales.  If they have followed the 4 R’s, they should be able to tailor their dessert presentation to what they anticipate the customer will want.  Servers should also have a good command of the details involved with each dessert: what’s in it, how it’s prepared, etc.  And the best thing you can do for your servers besides train them well is to give them props.  Being able to show guests a 3-D likeness of what they’re about to order is one of the easiest and most effective ways to get your customer’s sweet tooth active.A Cup Of Coffee Goes Great With Dessert

Finally, don’t forget to have a good cup of coffee ready to go with all desserts.  The two go hand in hand for most people, and making sure your brew is up to par with your great dessert menu is more involved than you might think.  Desserts and coffee are mutually supportive, so if you take the time to fine tune both, you’ll end up driving after-dinner sales, and that will make both your servers and your bottom line happy.

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Helping Food Service Workers In Need

Anyone who has worked for a significant amount of time in the food service industry has seen the dark side of the restaurant business.  While food service can be incredibly rewarding, and can provide many opportunities for advancement with little or no formal education, there are also many in the industry who struggle to make ends meet, fall on hard times without a safety net, and fall into alcohol and substance abuse.

That’s because the restaurant business is a tough business.  Half of all restaurants fail in the first three years.  Employee turnover rates are much higher than most other industries.  Because turnover is so high, both in operations and employees, benefits are much more restricted.

That means a lot of food service workers don’t get the support they need when they get into trouble, either financially, emotionally, or physically.

Kevin Finch, a Spokane, WA food critic, has been observing the restaurant industry for a long time and saw firsthand just how tough the business can be.  Realizing there was little support for the hardworking people in the restaurants he visited, Finch started Big Table, a non-profit that treats food service workers to a 5 course meal every other month. More importantly, Big Table uses their meal events as a way to find the people in the restaurant business who need help.  At the dinners, guests are asked who needs help in the local restaurant scene.  Once they’ve identified those who are struggling, Big Table offers no-strings-attached help.  They have fixed cars, paid medical bills, and even sent flowers to people in need.

Food service is the single largest job category in the U.S., and that means there are a lot of people who need support.  Big Table eventually hopes to expand their concept to other regions in the U.S., but in the meantime food service certainly could do a better job taking care of its own.

Striking the right balance between competing in a tough marketplace and taking care of staff at the same time is a difficult task for any business, and the restaurant business is tougher than most.

That said, the dark side of food service is a place most know about, but few discuss.  It took a food critic to shed light on the difficulties food service workers live with every day.  Now it’s up to the entire industry to work towards making the table big enough for everybody.

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How to be a Green Restaurant and Cut Costs

Through constant research as well as attending many industry programs, I have learned a great deal on what can be done in the “greening” of new restaurants.  Here’s a list of top ways your restaurant can go green:

  • The most obvious is to use high efficiency refrigeration, but there are many other ways to save on power costs.
  • Updated air-conditioning has given new and existing dining establishments a great way to save. A new system not only uses more “green” friendly refrigerants but the motor structures are much more energy efficient.
  • Lighting: New LED lighting uses a fraction of the power and can last many times longer than conventional illumination.  Today’s systems can be dimmed and have wider spectrum of color than the older, harsher lights of the past.
  • Using remote refrigeration instead of self-contained units can also increase the overall efficiency of all refrigeration.  Roof-top compressors can make a great savings in power usage.
  • Kitchen – make up air – new hoods using directed make up air – can save a great deal on the use of conditioned air being taken up by exhaust.  Well engineered kitchen layouts and air flow controls save a great deal on over usage.
  • Low-temp dishwashers can, depending on the local Health Department regulations, be possible to use these machines.  This equipment use a chemical disinfectant instead of high-temperature water to wash dishes and glassware.  They allow for much more efficient use of hot water thereby savings in both gas and electric.
  • On demand hot-water heaters and boosters has been the rage for the greening of new homes; however the use of on-demand appliances has been accepted more and more by local health and building municipal departments.   These units do not keep a tank of water hot for use but heats it as it is needed.  The savings here for the restaurant owner are incredible.  The booster units can work in locations where hot water is needed a distance from a hot water heater.  They can be placed under units in the restrooms or at the bar to keep the flow of under-heated water to a minimum or raise the temperature of cooler stored water to regulation temperature.
  • Low volumes flushing toilets and waterless urinals have become acceptable in many states and local areas and are very good at water savings.

All of these are, of course, easy to install on a new project.  When building a new operation everything is under review.  But most operations are already up and running.

As things age, we all need to do maintenance and equipment replacements.  When refrigeration needs repair it makes sense to evaluate whether repair or replacement is the right decision.   If a walk-in is of an older technology, it may be more cost effective to replace it with a better-insulated and more efficient model.  Most states have tax incentive programs to encourage operations to do just such a thing.  Operators should check with their local utilities to check on all programs available.

There are also many other ways to save on energy that are part of design.  Recently we were involved with a project that used prevailing air movements to save energy.  The designer used vented windows to take advantage of a prevailing breeze to direct air out of the dining room during the warm season thereby letting the management use less air conditioning.   We also insulated the ceiling and used ceiling fans to keep warm air in and recirculate it during cool times.    Design can have a great effect on operating costs and not just labor but energy.

The use of tints and filters on windows as well as shades and awnings, in the correct locations, and used as needed, continue to be useful for cost savings as well.

Every decision made in both the development and the maintenance of an operation has both an upfront expense as well as an ongoing cost.  It is important to research each one and to make sure suppliers and vendors also take these questions into consideration.  It is our duty to our investors and our guests to be as responsible as we  can, and in being responsible, it also makes good business sense.

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Counting Plates (Part Two)

In Counting Plates: Parts One we discussed the difficulties faced by managers, servers, and guests resulting from shrinking renewals budgets.

I advanced the idea of treating glasses, plates, and tableware as inventory rather than purely as an expense. This allows the cost of these items to be more accurately reflected on your P&L. Breaking a plate is an expense. Buying a plate is a revenue generator that is essential to posting profits.

Imagine for a moment what would happen if food or beverages were accounted for in the way we account for plates. At the end of each period, the walk-in would be empty. The bar would be bare because anything not used became valueless. The last hour of the last period would become a fire sale on the three menu items you have in stock.

Would anyone really run a restaurant like this?

They do when it comes to renewals.

Not supplying your kitchen and servers with the items they need at the end of the period because the budget has been consumed, directly affects the guest experience. The several extra minutes a server spends looking for items around the restaurant not only affects the table it is needed for, but it also delays the needs of their other tables from being met.

Each of these tables’ turn time will influence your later tables and have a snowball effect. At the end of the shift, you have gone beyond the time you quoted at the front door and potentially turned away guests that you otherwise could have accommodated.

This is just the most immediate benefit; several others can be achieved as well.

Supplies When You Need Them: When you are first alerted that you are lacking something, you are already behind the curve. You must wait to place the order, order enough to avoid paying delivery fees, and wait for it to be delivered. This is enough time for a small problem to turn into a much larger one. This also allows you to avoid any issues with the items you need being on backorder.

Accurate Evaluation of Loss: When you account for items by the case, you only get a big picture view of what you are ordering. Knowing which items you are losing allows you to know which items are being lost. This will allow you a more detailed understanding of where your money is going. This will also allow you to change any practices that could be contributing to your loss.

Avoid “Snowball” Loss: When you are running low on high-use glassware, you are costing yourself more than you realize. A server who needs a pint to serve a drink runs to the dish room to have some cleaned. They then bring that rack of pints out into the hands of other anxious servers. Soon the glasses are filled with ice and crack from the heat transfer. Now you have at least one more glass to replace and potentially workers comp paperwork to fill out.

Improve Morale: It is frustrating to your floor and kitchen staff to not have what they need when they need it. Prevent this from becoming something they have to worry about and their morale will improve. This also saves your dishwasher from having to run emergency racks to get a specific item clean. This leads to a better guest experience and one less thing you have to field complaints about.

Protect Your P&L: When a server can’t find a ramekin for a guest, they are faced with some options. The first is to have the dishwasher run a load of ramekins to get them clean and then stock them. The other option is to grab a to-go ramekin and send it to the table. The cost of the first option is the server, guest, and dishwasher’s time. The cost of the second option is the price of countless lost plastic ramekins. Both will show up on your P&L in far more costly ways.

Prevent Passive-Aggressive Loss: When servers do not have the tools they need, they will get frustrated. When you complain about being over budget, they get more frustrated. They cannot take out these frustrations on the guest for fear of losing part of their tip. Instead some will take it out on the remaining items you do have. This happens far more often than you would expect.

Better Experience For Your Guests: If none of the other reasons existed, this one should be sufficient. When you fail to order necessary tools for your staff, the guest suffers. Even minimal delays based on lack of supplies leads to food sitting in the window, getting cold at the table, and guests not having what they want. Failing to keep supplies in house is failing your guests.

In the big picture, your time is better spent attending to your guests than it is ordering supplies. Keeping an inventory on hand will solve much of this problem. It will also better represent the financial situation of the restaurant. Making the transition will require time, but will save far more in the long run. Avoiding complaints, preserving morale, and providing superior service are all benefits of making the change.

This is time well spent.

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Special Ties: A Tundra Ran Charity Organization

The Back Burner is written by the employees and friends of Tundra, and while we usually try to make this blog as informative as possible without imposing our brand on the information, sometimes there’s just going to have to be an exception. Don’t worry, we’re not going to suddenly turn this thing into a diatribe about how great Tundra is (although we’re confident we are pretty sweet).  Instead, we’d like to simply mention a great idea one of our employees had a while back that has come to fruition.

Special Ties is a charity operated by Tundra that serves many good causes in the Boulder community. In the past, Special Ties has donated time to the The Boulder Shelter for the Homeless and the Women’s Shelter, and money to charitable organizations like:

Tundra has always felt strongly about giving back, and now we can do even more with our Special Ties program!

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How To Grow Your Restaurant – Without Going Broke

How To Grow Your Restaurant BusinessSmall independent restaurants have been dropping like flies over the past year.  Chances are, if you’ve made it this far through the recession, the worst is behind you.  That doesn’t mean tough days aren’t ahead, but hopefully you’ve at least stopped just trying to stay above water and have started swimming a little.  The waters out there are still dangerous, but if you’re not thinking about growth, you’re setting yourself up for decline.

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:

Maintain your focus.  Someone is always going to be trying to sell you something or help you out with another thing.  Buying their product or partnering with their firm is your key to success.  More businesses have failed because they invested in things that didn’t help their bottom line than just about any other reason.  You must maintain a laser-like focus on what your restaurant really needs and what might be nice, but isn’t absolutely vital to day-to-day operations.

Don’t forget who you are.  Small independents do well because they have a local appeal and feel like they’re part of the community.  A common mistake as a small restaurant tries to grow is to start trying to appeal to larger audiences by expanding menus, changing décor, and moving into larger locations.  It may seem counterintuitive at first, but a crowded little local place with a hole-in-the-wall feel is much more attractive, and in the end more profitable, than a little-known name that just moved into a large, mostly empty space.  You’ve been successful up to this point precisely because you are a small independent restaurant, not in spite of it.

Be a tightwad.  Another trap small businesses fall into, especially successful ones, is to start splurging on products and services.  If you’re lucky enough to be making money, count your blessings and then continue to be a miser with the bank account.  If you do spend money on something for your business, make sure it complies with Rule #1 above.  You’ve gotten this far with a lot of hard work and a lot of doing things yourself.  Don’t let those good habits go by the wayside just yet.  Keep your nose to the grindstone and keep building up the treasury.

Be a cutthroat shopper.  Pit food suppliers against each other.  Relentlessly search for discounts on everything you buy.  Search out rebates from credit card companies, utilities companies, insurance companies, and anyone else who provides you a service.  Controlling overhead is the key to success, and if you lay the groundwork now, it going to translate into better profits down the line.

Sell the &*!# out of your product.  In the end, restaurants are about making a product (your delicious entrees) and selling them to customers.  The first four tips in this list are all about making production as efficient and as affordable for you as possible.  Unfortunately, none of that matters if you’re not selling meals.  Make getting as many customers in the door who also leave happy the top priority of your business.  Really, this should be first on the list, not last.  Don’t let focusing on the other tips cause sales to fall by the wayside!

Success for your restaurant boils down to this: if more money is coming in the door than going out, you’ll live to fight another day.  Ironically, most small business owners find that controlling the amount of money going out is a lot harder than growing the amount of money coming in.  That’s why four out of five tips on this list deal with overhead and expenses.  Striking the right balance between growing sales and controlling costs is the key to growth in your restaurant.

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