Slow Economy? Do Something

Warning—nothing in the following article is illegal, immoral, fattening, or shocking. What you will encounter is some good old-fashioned common sense.

The economy is not exactly helping your business right now. So, let’s do something.

Two things: hold prices steady and tighten the budget. Easy, right? Well, this is where the common sense comes in.

Price increases are exactly what the customer expects, and research confirms that he will decrease his visits when it happens. So, you end up losing customers or customer frequency. If you have to do it, do small increases frequently, rather than a one time big one. It’s harder to spot.

Now to the point of not spending money. There are lots of things you can do if you use the old bean. Let me give you some hints, and then ask your manager and crew for some more ideas. Odds are they have them.

Let’s look at some major areas of consideration. Brainstorm these with the gang to get you started. (I’ll talk about quality and service later. Even though your food and labor costs have gone through the roof, you have to be very careful about cutting into those areas.)

Costs: Look at everything, including delivery costs. Can you save on delivery by taking fewer, bigger deliveries? Or fewer disruptions to store routine?

Increasing Sales: Remember, we don’t want to spend a lot of money. My No. 1 suggestion is suggestive selling. Done correctly, a suggestion of an additional item or a jump up is one of the most effective means of increasing sales, and it doesn’t cost anything. Just don’t annoy the customer. Go see the service clubs and see if you can supply large orders to them, particularly breakfast. Take full advantage of the businesses in your area for mutual benefit.

Increasing Customer Counts: Drive them in by being a part of their lives. Remember POLR (Path of Least Resistance) from a previous article? If your current customer, Bunkie, comes for lunch, give him a coupon for breakfast. Think about bring-back promotions. You know, frequent-eater programs. We had a rodeo parade recently in Payson. I wondered why a local restaurant wasn’t handing out coupons good for the weekend to the visitors. Bet business would have been great. How about some good old Boy Scout, school, or service club tours of the restaurant? Expose more people to your restaurant and they will come back. And, get out there and speak at schools and service clubs about the restaurant business. We are inherently interesting and a model of American business. It’s good for recruiting, too. And don’t forget cooking classes. Everyone wants to know how to cook the perfect hot dog.

Maximizing Your Profits: Take a look at your store hours. Are you open too early or too late? How can you sell more of your most profitable items? It might be just suggestive sell or pricing (another argument not to increase prices). The first cut a customer will take is appetizers and side items and, in many cases, these are your most profitable dishes.

So how else can we make more money and not spend it?

Consider the three Ps of food quality: portion, packaging, and price. You might be able to decrease your portion sizes and save money. Look at what the cereal companies have done. Same size package, less cereal with the same or higher price. Genius!

Can you package less? Wrap, box, bag: can you eliminate one?

We’ve covered price, but don’t affect the quality of your food by looking at the price you are paying. Again, this is an area customers expect you to change when times get tough. Don’t let your steaks get tough.

Service cost is killing you, but you have to bite the bullet. The easiest, no-cost solution is the attitude of your people. Keep morale up and keep them smiling. Probably one of the biggest problems of the airlines right now is the attitude of their customer reps. “Your flight’s cancelled, take a train,” is not good customer service. Do a favorite-server card program where your customers recommend their favorite. Work on fast service. Do fast contests for the crew. Oh, and return your calls in a reasonable time, keep the manager on the floor (not in his office), and empower your crew to handle problems. None of this costs much but will hold on to your customers.

Also, clean up the place. That’s something customers quickly notice. Have a crew person appointed as the Clean Cop. Empower him to make sure the restaurant is spotless.

Be very careful of your value image. Again, according to research, what a customer gets for what he spends this is the most important area to him. It all comes down to value. Highlight your value.

If you don’t have value meals or combos, get them. If you need to run a promotion on your meals, do it. In a down economy, the customer is looking for the best deal he can get. This means the best of everything, including quality and quantity of food, service, and cleanliness. Make sure you measure up.

The answer is not always to raise prices or spend tons of money on advertising. I hope I have given you some alternatives to consider. The key is your customer. What does he want and need? As long as the customer is priority No. 1, you’ll be okay. This too shall pass.

Happy Trails and a Peaceful Life.