Nation's Restaurant News

21 success strategies for the coming recession

21 success strategies for the coming recession

Rick Telberg

21 success strategies for the coming recession

There is no longer any doubt that a recession is coming, if it hasn’t already arrived. The only questions left are, How deep? How long?

This new, tougher environment calls for new approaches. Here then are 21 strategies that foodservice operators are turning to.

(1) Focus on the customer. It’s not news, but it is all too often forgotten. For instance, at your next crew meeting, will you talk about the proper procedures for the time clock, cleaning the grease trap or how to work the compactor? Or, instead, will you talk about guests – what they want, what they expect, why they come and why they don’t?

(2) Treat your employees like customers. Remember that they have the same wants and needs as anyone who sits down at a table and they expect to be treated just as honestly. Manage for people, not profit, and profits will follow.

(3) Dig a niche. Avoid menu proliferation as if it were a disease. Find your position and hold it. If you are merely mediocre, then stay mediocre. Changing would only confuse customers. Customers need to know who you are.

(4) Don’t cost-control yourself out of business. Manage from the front door, not the back door. Cutting service or quality is a sure way to cut traffic.

(5) Be responsive and responsible. It sounds naive, but Americans have been lied to so often that they are skeptical of every promise ever made. Whether you know it or not, you demonstrate every day what you stand for. If you are more concerned with making money than with making people feel like guests, they’ll catch on immediately.

(6) Recognize that you don’t determine value; customers do. If drive-thru-only, kiosk-sized restaurants sell quarter-pound burgers for .99 cents, then unless your product is much better, that’s all yours is worth, too. The consumer doesn’t care about your overhead.

(7) Pay off your old debts, both personal and business. And get ready to borrow anew as the Federal Reserve pushes down interest rates to soften the recession.

(8) Ride the baby boom into the next phase. More than one in five Americans over the next few years will be aged 40 to 60 years old. People in this age group have money to burn and a well-developed taste for eating out. Demographers call them OPALs, “older people with active lifestyles.”

(9) Start reading the political news as if it were marketing research. Just as in your restaurant the customer is always right, the customer is always right in the voting booth, too. And clearly, Americans are pushing politically for a socially responsible business sector. You can lead the trend or follow it. But if you try to stand in the way, you’ll get trampled.

(10) Throw out the book. You can’t run your business by the manual anymore. Take occupancy costs. They can range today anywhere from 1.5 percent of sales to 11 percent or more.

(11) If you own your own business, take a pay cut. There is no longer any doubt that margins are tight and that there will be no improvement for at least a year. If you own your own business and you are still pulling out as much salary and dividend as you did when profits were rolling in, then you are milking your business, not nurturing it.

(12) If you are not an owner but an employee and your boss has not taken his pay cut, then go find a boss who has. If the owner is draining the business, you’ll be looking for a job soon anyway.

(13) Innovate or evaporate. This is the time for action. The economy is in flux. Consumers are searching for new products and services to match their own changing circumstances.

(14) Cut advertising. But don’t hoard the savings. Pour it into the restaurant. Your restaurant is your best marketing strategy.

No one should leave the restaurant unhappy. Americans say they are dissatisfied with their purchases about 10 percent of the time. If you could just recapture that lost 10 percent in your restaurant with better service or better food, then you could boost business 10 percent.

(15) Treat the customer as if he were worth a million dollars. He is. If one happy customer brings in just one more customer and that new customer breeds another, then, assuming a $25 check average and a return visit every three months, that one customer at the beginning of the chain was worth not just $25, but actually $200 a year. Now run the figures through your calculator assuming, as the experts say, one dissatisfied customer complains of his experience to six people and you’ll see the cost in lost sales quickly mounts into the millions.

(16) Treat your suppliers like partners. They are They’re margins are at least as pinched as yours. And they’re working just as hard as you are to stay in business. If they are aren’t, find a new supplier.

(17) Exceed expectations. How about a free glass of Champagne as you seat the guests? Why not a sugar cookie after the meal? What ever happened to the bottomless cup of coffee?

(18) Sell, sell, sell. Would you like fries with you order? How about our delicious cherry pie? Cappuccino? We’ve got a kid’s meal they’ll love. Would you like a glass of wine (and read them the label) before dinner

(19) Let customers feel good about what the eat. Highlight the health-conscious aspects of your menu. Promote the locally purchased produce, the noncholesterol frying oil, the “lite” portions, the fresh bread.

(20) Provide choices. For example, if you take sandwich with 8 ounces of meat priced at $6.95, the portion in half and the price by a dollar and your may even sell more at $5.95 than at $6.95.

(21) Don’t just do it. Do it now.

COPYRIGHT 1990 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

COPYRIGHT 2008 Gale, Cengage Learning