In my book, there are three “Foundational Fundamentals” to running a successful, highly profitable restaurant or hospitality enterprise. Much like the foundation of a building, they are each supportive and reliant upon each other for maximum strength.
I rank these three in order of importance as follows:
1) Staff Development, Training, Recognition and Rewards: Your staff are the cornerstone of your business, affect your ultimate success and if nurtured effectively, become the driving force behind your “Brand”.
2) Cost Controls & Profit Maximization: Hospitality is not merely about serving food & drink, but about running a bottom-line focused business. If you’re unaware of the numbers and what you sell is not profitable, it doesn’t matter how busy your operation is!
3) Marketing & Affinity: To dominate your competition, you need to get outside the four walls of your business and find new ways of connecting with more customers, make them feel a sense of belonging and give them many reasons to spread the word.
I love getting together with my friend and industry “Pro” Jaime Oikle of www.runningrestaurants.com and www.restaurantreport.com He and I frequently put our heads together and riff on a variety of issues you’re facing today that will help you strengthen your operation. Head on over to Jaime’s sites for tremendous resources to help you knock it out of the park.
Listen to today’s episode as the numerous ideas we discuss will be a new foundation to greater success for your business.
Master these three fundamentals and you will truly Rock Your Restaurant.
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EPISODE #103 TRANSCRIPTION
[Start of Transcript]
You’re tuned in to the Restaurant Rockstars Podcast. Powerful ideas to rock your restaurant, here's your Host, Roger Beaudoin.
Welcome back to Rockstars. I frequently collaborate with a fellow industry professional and a really good friend Jaime Oikle of runningrestaurants.com. Jaime and I frequently get together because we're both passionate about the industry and helping others succeed in this business. So we've done a series of calls over the past year and a half, we have these back and forth interviews where we discuss a variety of topics that we believe will really help our audience and this one is in particular very, very, powerful where we discuss three fundamental foundational elements for any restaurant success.
So, it's something that we recorded not so long ago, I think you'll find it relevant and powerful and these are immediately actionable ideas that you can take today and execute in your restaurant for greater success. There's so many amazing actionable nuggets here that will not only increase your profits but will help you develop what I call your dream team staff and just run a really, really, powerful organization, whether your hotel or restaurant or hospitality operation of any kind, I think these ideas will serve you well. So why not grab paper and pen, take a listen, feel free to jot down notes and listen up.
Interviewer: Hello everyone this is JAIME ...... from runningrestaurants.com and I've got a terrific session on tap for you today, today's topic is entitled “Three Fundamental To Master For True Restaurant Success” and you're going to want to absolutely put everything else aside for a bit and take notes on this because I promise it's going to be great and I know that for a fact because I've got a great, great, interview for you and Roger Beaudoin and over the years I've probably interviewed Roger 15-20 times now and so I know he's got the knowledge and the expertise my listeners are looking for to drive their business forward.
Roger was a longtime successful restaurant operator with 20plus years’ experience in the business, he's now a restaurant coach and consultant and trainer and speaker as well as author, sharing all his hard-earned wisdom with others in the business.
Roger is completely fanatical about pulling profits out of the restaurant machine and you're going to hear that in the stories that he tells along with his book, Roger has created the restaurant customer service program sales stars as well as the soup to nuts program for how to run a profitable restaurant called the restaurant academy, so he's a great guy to talk business with. Roger! Welcome, thanks for joining me.
Interviewee: Hey James! Great introduction, thank you very much for having me.
Interviewer: Well you got it Roger, I appreciate it and before we dive in to today's topic, I want you to, did I miss anything, is there anything else you want to bring up, to mention before we get going?
Interviewee: Just I'm really passionate about working with operators, owners and managers and helping them rock profits in their business. You're absolutely right I was totally obsessed with profits I had to be, I had seasonal operations that were only open 4months a year.
I was really proud of the fact that I had double the net profit of the average schools or restaurant, so it was this obsession that led me to create systems across the board in all my operations and now I share those systems freely with my audience and so I'm really happy to be here today.
Interviewer: Yeah awesome! We’re going to work, we're going to talk about those systems, we put them in three major buckets for a focus today and we're going to cover a lot, so the first big major bucket that you've got to get right is ‘Cost Controls’ and that feeds the profit maximization, there's a lot there and we're now going to go super, duper, heavy duty and into some of the stuff, but how do you think about the overview when you're talking with a new operator or a new client and you're getting a hold on costs, getting a hold on their profits? What are some of the things you walk through?
Interviewee: Well there are two really, really, powerful pieces to that question JAIME and I'm going to start with what I call the ‘Cost Profit Analysis’ and what I do is I look really, really, deep at a product mix report which obviously tell an operator every single item they've sold over a period of time and I like to look at least 6months of data, at a minimum and then we go to costing sheet so that hopefully every operator worth their salt his costed out their menu right down to the garnish every single item that goes into a dish, but essentially if we've got a cost of goods for every single item category by category, we will transfer the volume of sales on to those cost sheet so that we know you know how popular every item is in terms of how many sales they generate.
And then we analyze the profit and the thing that I noticed in most restaurants I work with is profits are all over the board, if we're talking about the appetizer category, I might have something to contribute you know a $3-$4 profit, I have things that contribute maybe a $5-$6 profit and it varies so dramatically.
But the telling result is when you suddenly find out that maybe over the last 6months you know, maybe you sold 2,000appetizers that only contributed to a $3 profit and then you look in you've only sold maybe 700-600 of the higher profit $6 items and that tells me you're losing lots of money because obviously the least profitable items that are more popular are taking sales from the higher profit items, so that is a really telling thing.
And then we go back to the drawing board and we redesign a menu so that every single item in each category contributes a very similar if not equal profit, that is the key right there, it is absolutely possible to do that if there are popular items that you don't want to take off your menu, there are a couple things you can do, you can either raise the price on that item to get its profit more in line with the higher profit items, you can change ingredient slightly, you know those sort of things or you can drop those items entirely but basically, we're looking for three things: appeal and variety to the customer and then profit being most important.
So, that is a very critical exercise and then we move into obviously the inventory and it probably doesn't surprise you to hear that lots of restaurants just aren’t doing this absolutely necessary stuff and I think of inventory JAIME is cold hard cash and until it's absolutely sold, you know there is so much margin for error, either it can be wasted or spoiled or stolen or whatever and until you turn that into cash, it's like leaving $100 bills and you’re walking and these operators just aren't taking that inventory.
And then the final piece of course is figuring out what your costs of goods are, your food and beverage cost at the end of every week or every month and you can't do that accurately unless you do the counts; you know walk through your walk in and count every single item, everything in your coolers, your dry storage areas, your reserves and do the exercise.
So that's really the cost control and it leads to the profit maximization part you know the cost profit analysis, it's such an eye opener because when these operators see, “Oh my gosh! My least profitable items are my most popular items” no wonder you're working just as hard producing those low profit items and now they know why their bank account isn't growing, so those are some pretty critical steps in that cost control profit maximization topic.
Interviewer: Got it yeah and all this and I was writing down a lot there and I was reminded of, I did a series of calls with Roger around his book called, the book is called ‘Rocky Restaurant’ and I have to, we have to pick up a copy, it is fantastic but we walk through a series a call that we went through some of the spreadsheets you have in that book and I while you were talking, I put it up on the web and yeah we talked about he had a pricing break even analysis for your restaurant, key labor systems, how to calculate the cost, taking inventory most profitable item which you touched on, menu product mix, all those things and this is this literally or over the series of 8-9calls must have been I don't know probably 3-4hours where the content so we can't touch on all that today, but if you were to identify a couple really key items inside of those topics and share 2-3 extra tips with folks, what do you think you touch on?
Interviewee: Well, you know we didn't touch on two critical items that that are either cost controls or profit maximization and one critical piece that I find that a lot of operators don't know is their Daily Break Even and I know you just touched on that briefly and you know this is a simple map and it's certainly not you know college trigonometry here and I in my courses, I offer audio tutorials that literally explain what these numbers mean, where you find them we provide totally turnkey automated spreadsheets where once you find these numbers and I show you how you just plug your numbers in and it calculates all this stuff for you.
But the daily breakeven is the point where you're not making any money and you're not losing any money but basically what it costs you to open the doors of your operation, your restaurant every single day and every restaurant let's face it in America, is not slamming busy 7days a week, it's not a Saturday night on a Monday for most people in this country that run restaurant, so if you find out that you're below your breakeven point and 1-2days a week you've got two options, either come up with some special promotions to drive traffic on those days and I've got plenty of ideas on how to do that or give yourself and your staff a much deserved day or night off because you're going to lose less money by closing than you will by being open once you discover what that daily breakeven number is.
So, that's a critical piece that I think and then we didn't really touch on the cash cows because cash cows are super way to increase your profits and you can sell these things, you can give these things away and you know we can dive deep into that if you like.
Interviewer: Well absolutely, I do want to point out that one of my favorite ones that you talk about and a folks aren't doing cash cows in their business are really missing a big deal, so let me revisit that for second Yeah, you talked about the daily breakeven and if folks need to look at their days, they can do special promotions or take a day off I think that that's good and now in one of our later topics big buckets maybe will touch on a special promotion because every time I quiz Roger on a couple those, he's got some neat ideas to share.
But let's stay in here in cost controls and profit maximizations for a little bit more and when you talk about cash cows, it's a fascinating thing that I hope most restaurants are doing and if you're not listening closely because it's a really great way to drive someone into the bottom line, so walk through how you think about how you talk about it because it's really important.
Interviewee: Well it's simpler than it sounds and basically, a cash cow is an item, it can be of food item, it can be a drink or an alcohol item, it's something that costs you very little to put in front of the customer, yet it has a very high profit when you sell it, because it's got very high perceived value, it looks great, it smells great, it tastes great and it's got marketing appeal.
And what I mean by that is you can use this item to drive business into your restaurant and I'll get into that in a second, but just a few examples of a cash cow, you know in our restaurants we had a wood burning brick oven because our primary item was wood fired recovering pizza and we developed a byproduct of the pizza dough that we made fresh every day and the item was garlic nut and you know lots of restaurant sell garlic nut, the very profitable but it's more, it was more profitable for us because we made our own dough and we only have one sized pizza and we would roll out a dough ball that had a certain ounce weight to it and we would put it through our automatic dough roller and it would have maybe a half an inch three quarters of an inch overlap around the pipe hand once it was rolled out before the dough actually went into the oven, so my pizza makers just took a pizza cutter and they just trimmed off that edge, now that dough that was trimmed off was already costed out in the price of every pizza we sold, so that dough was pure profit, it was absolutely free and clear and all we did was my staff tied them into little pretzel knock and they took you know a brush and they brush them with olive oil and the little bit of butter and they sprinkled a little bit of parmesan cheese, a little bit of garlic on there we bake it in the brick oven and we sold these things for ten bucks a pop.
So, it was something that cost me about thirty cents to put on the plate and you could sell it for $10 I mean and the customers loved it, it became our most popular appetizer, it was like garlic bread in the shape of nut, you know there were eight of them to the basket, the dough rose really, really, you know nicely in the oven, so they were really substantive and really, really, popular but the kicker was, we decided to use it as a promotional item to drive new business into the restaurant, so we went into that community and maybe a five or a ten mile radius and we identified different non-competing businesses that we built relationships with and I called those strategic alliances and I met each of the owners of the Managers personally and I said, “Hey! you know we have this item that we charge $10 for and I'd be willing to give them to your customers absolutely free, I'm going to print up some coupons with a photograph of the item on it and some really compelling copy you know fantastic garlic nut absolutely free $10 dollar value whatever” And I said to the owner and I said if you pass these out to your customers whenever they come in your store is just a thank you for visiting your store whether they buy something or not, just give them a coupon and as long as you stamp the back of that coupon with an identification either you know the logo of your store or your initials or something, I'm going to track these when they come back again and I'll give you 10% back in trade or whatever the customer rings in a guest check.
And so, I get about ten or fifteen different partners and I did this for many, many, years and some of my biggest partners that really embraced this program, probably sent me 12-15 thousand dollars of new business in a 4month season, but the real beauty of this program to get to the crux of it Jim like I said the value was ten bucks, the perceived value, the cost to me was about 30Cents plus the cost of the coupons that I printed by the thousand, so I have very little cost in this and the average ticket that a customer would ring in my store was somewhere around $75-80 because it wouldn't be just one person coming in, it would be a two top or three or four people that would come in, they would you know, they would redeem their coupon, would sit down for dinner, they'd have drinks and dinner and I get an $85 cheque out of something that cost me about to you know less than 50 cents.
It was unbelievable and we did this for years and it just drove so much new business into the restaurant. So that was one cash cow, so we said OK if one cashed cow was good, several are even better, so then we came up with a homemade bread pudding recipe that probably cost about 35-40cents to put on the plate, we served thousands of those for dessert, it became a really popular dessert that we sold and then we had an alcohol item that we called Glacier bowls and the kick to that was there were these giant 60ounce fish bowls with it and you know, there were probably oh I don't know four ounces of well liquor in there and then it was fruit juices and club sodas in a little granted bean, we probably had 10different varieties of these and they were so exciting, we put a glow stick in it and some Swedish fish and some of them and they all had their own little part, but we charged 20bucks apiece for these things and people would come in and they'd share a minute the baby's really, really, long straws you know that would go in and people would--- it was almost like a Scorpion Bowl at a Chinese restaurant which is also very, very, popular so that's just another example of how you can make money on your bar with the cash cow in addition to the food items so you can't have too many cash cows that sort of what am I Montrose and it's really a way to increase the profits in your restaurant, huge lowers your food and beverage cost because the volume really kick in when you lock the thing and then you use them as marketing tools or hawks that really drives new business and really creates excitement with your regular customers. So I can't say enough about the power of cash cows.
Interviewer: I'm glad, I'm glad you walk through that because when I hear those stories, I'm like I hope restaurants are doing that, I'd be taking no because you're doing so many things in your business that you're hoping to make profit on some stuff that you know some stuff breaks even, some stuff is a challenge, there's a lot, there's a lot of challenges in the business right now and so if you're doing kind of everything average, you're not going to win and you're not going to get ahead, so you've got to beat the system, you've got to break it and you've got to do things like this where you're your cost of 30cents and you're stoned for ten bucks, you have to have those things in your restaurant, in your bar that are just dropping dollars at the bottom to help everything else, that's you know, that's quite an appeal, so good stuff there Roger, I appreciate it now and sharing that with folks, so give you cost control and look for systems to drive profit maximization in your restaurant and the next big bucket that we want to talk about today and this is Roger's absolute sweet spot is where he killed it and crushed in and he'll tell you why and how, but staff development, training, recognition and rewards, this when I talk to you always point to this as kind of your number one driver, tell me why you think that
Interviewee: Well so, your staff is the cornerstone of your business, they absolutely represent you every single day in front of your customers and those staff are either making friends with your customers and building your business or they're destroying your business.
And I learned a really painful lesson over 23years ago, couple of weeks before I was opening the doors to my very first restaurant, you know it's a story I tell where I went into a place that was a wood fired pizzeria and I was expecting to learn something and I was given a menu, I was sat at a table and there were you know ten or twelve specialty pieces on that menu and they all sounded pretty good, so I asked the server of her recommendation and in all honesty she looked me in the eye and he said I can't recommend the pieces, I don't eat them, they're too expensive and that's just sent such a strong message and it scared me to death and I realized quickly and that became the foundation of my sales staff training system because I realized that what your staff say and do can absolutely sabotage your business if they're not trained properly.
So, training became a huge, huge, passion of mine and it led to a lot of my success but that was a key example where you know, you're either training your staff to be brand ambassadors or you've got what I call the C-team’ and the C-team are just there for the paycheque, they're not doing any favors of bringing down morale and chances are they're turning off your customers and you'll never see those customers again and you might never know it unless you're really, really, you know watching what these people do and say and you're training them well, so you know we can get into my philosophies about where to find great people and the mistakes that a lot of operators are making and I know it's a labor shortage out there, it's really tough across the country right now, but that's why it's so important to build what I call the ‘Dream Team’ because once you have a dream team and this is why this is so important then they have your back, you know I trained my staff to do several things, to notice, to see what they get to see before they see it.
I empower them to fix what they could that was broken so that every guest’s impression was positive and memorable and then I taught them, I train them to think like an owner, to think like me, to put their guests head on and to treat everything in the restaurant as if they own it and they had to pay for it and then there were recognition and reward, so there were certainly incentives behind this training that really developed the staff but the crux here was my staff had my back and you know they say you've got a system in place, I say this all the time if you can leave your business, your restaurant for a week, a month or a year and when you come back it's just as successful, just as profitable if not more so than when you left and that's when you know you've got a dream team that are making friends for your restaurant, delivering great experiences and it's a well-oiled machine and that takes training and you know I can show you how to get there, but that's why I'm so passionate about it and why it's so important.
Interviewer: Yeah Roger, I want to go back and touch on a couple of things here because yeah your voice goes up a few octaves and when you're, when you talk about service and you get really energized about it and I know it's what help you do it and folks if you don't believe that he's right, you just listen for a little bit longer because the systems work and his response absolutely crushed in terms of profit numbers, but I want to go where you were when you talked to me one of the first times we ever talked, you talked about order takers and I'm just happens to this day it happened 88.7% of the time, I'm just making up a number there, but it's probably even higher when I go into a restaurant, I get order takers these are people that come up to me and say you know hi, what do you want, they don't do anything else and I know that's the most frustrating thing in the world so talk about it.
Interviewer: Well, you know that is frustrating and I think you and I both travel quite a bit and we have a lot of opportunity to check out different restaurants at different price points across the board in many, many, places and you're right I would literally say that eight and a half or nine times out of ten I get this order taker and it doesn't matter the price point and that's just screams that this restaurant doesn't train their staff or they think it's enough just to put a person on the floor to take your order you know, deliver the food and bring the cheque.
And to me that was just such an ordinary experience, it doesn't separate restaurant apart from the competition and I look at the staff, every single member of the staff interacts with a customer or is a Marketing Ambassador for your business OK and if they're just an order taker with an average personality, even if they're friendly they're not doing any favors and that's where that sales straining came in because I always believed and I still to this day believe that you know the restaurant business is all about entertainment and your front of the house people aren't just employees, they're literally actors and actresses on stage.
I've always thought about when the front door to your business opens your restaurant every single day whether it's breakfast, lunch or dinner or all three it's like the curtain is going up and it's show time and your staff are there to educate, inform and entertain your customer and that leads to what I call the ‘Magical Journey’ because every restaurant in this country I don't care where it is or what the concept is, you get a new customer in the door probably every day OK, someone who doesn't know the first thing about your restaurant what makes it special, what makes it unique and you know they may have just driven by and it looked good, maybe they were hungry and it was lunch time who knows, someone told them to try but they still don't know and your staff are the experts, they're the ones that should be trained with product and restaurant knowledge, to take people on what I call “The Magical Journey” and that's turning a new customer or a regular customer on to every single thing about your restaurant that makes it cool, makes it special and to tell people what they don't know.
And in so doing, by educating and warming in entertaining, you're going to watch your sales rise dramatically because making suggestion strikes a chord with people and if that sounds great and if we're promoting what we know our customers will enjoy and appreciate, then cheque averages are going to double. And I've created a whole training system around that philosophy.
But the bottom line most important thing is treating every customer like your most important customer like their old friend even if they just walked in the door with the very first time.
Interviewee: Absolutely Roger, I'm telling you like we touched on and I thought some of you did it like nine times out of ten that's not happening so restaurants are across the board you know without pointing fingers, restaurants or missing opportunities.
I shared with you a story and I still haven't written up I want to turn it into an article and I have to write this because it-- I'm sure it's happening across the country where a we had a fantastic experience at a restaurant, service was great, made suggestions upsell, we you know, I think our ticket was over $120 for you know for the family by which for us was it was a high average this place and she was fantastic.
We were excited to go back to this place and we go back the next place I think and what a week's time we're like man could be great and we're like jazz and we get this order taker and holy crap to the experience like we're like, “Is this the same place?” What happened? Are we different?
I mean like she didn't upset; all am telling you the check was it was at least 120 and this and the second time through seventy bucks because she didn't do her job she left a ton of money on the table and it was evident it was unbelievable and we're like, cheese or Jewish or we come back again and roll the dice?
And we will because the food was like knock out and we're excited about the food but the service made a difference so. So, that one little story really drives it home. And nine times out of ten, I'm getting or take a reverie I go and if you don't think it's happening in a restaurant, you've got to be paying close attention you've got to be doing pretty shit means, you've got to do in training, you've got to be talking about your special Roger hits this stuff and sales are the hits is hard like you have to do these things to give your restaurant chance. So, I went off on a tangent there.
Interviewer: Powerful information Jim.
Interviewee: You can you're talking about everything in every restaurant every table is valuable real estate and yours your staff are either maximizing opportunities in your business or they're losing you money it is that simple you know every operator out there is taking all the risk of business they're paying the mortgage the rent utilities the insurance is the payroll that would cost I mean it's a huge risk you're taking in that in a really risky business and a lot of operators are just leaving the sales to chance and they're not training their stock to sow to recognize these opportunities and it's just so much law money every single day, every single month, all year long and it's that simple. You know you've got to train these people to serve and sell, it’s equally important.
Interviewer: Well, let me use that as a last topic in this bucket is talking with the team which is you know A-B-C being not good enough and forming a direct their dream team so you develop the team then you're turnover was incredibly low you had people come you know even if he's in business you have people getting back to year after year after year which is built on itself and gives you gives you folks but some folks maybe office and it's hard to find people oh I got to take them because they're warm body talk about the philosophy of even if you have the folks you've got to weed them out, you've got to bring in people or you've got to develop them, you've got to find that you've got to get your dream team in place.
How do you really kind of give folks tips there they can they can make a difference?
Interviewee: You know it's really a leap of faith because I had the very same problems when I first started my restaurant so long ago, you know it was labor issue then too but you know every restaurant has at least one and hopefully a couple of what I call that A-players.
Well, an A-player is well trained; they've got the right approach the right attitude but most important have a true desire to serve the public. And then there's the B-team, where they have many of the same attributes they just don't necessarily have the experience or the practice all they need is a little polish to be and A-player.
So, I took my As and I used them to train my Bs to develop them into A-players and then I got Rhythm I see immediately and I had you know let over the years, I had seen that would come in the door you hire them seemingly for the right reasons you know I had a whole different hiring philosophy which weeded out 90% of the Cs.
But every once in a while you get someone that that looks good they say the right things in an interview you try them out and they just don't work out but over time a very short period of time you know we developed what I called a culture of hospitality, family and fun.
Where fun was you know how great it was to work there because the chemistry of the team was so strong and people really enjoyed their customers so much and customers would ask for them by name so that's the fun part but when you've got someone that has such a great time working in a restaurant they're making really, really good money because they've been trained to serve and sell, suddenly you've got the family part where the chemistry of the team feels more like family than employees.
I never use the word employees, I never use the word staff; you know we were all members of the same team and then I use the A's to bring in more A's I said to my A's and I B. and my B-team who you know that you think would be it here that might be looking for a new opportunity and you know might fit the team and they brought people that they knew and 95%-98% of those people worked out great and they became eighty's in a short period of time
And then, pretty soon I only had an eighteen my no longer had Bs, I no longer had these I had 95% in a seasonal business it was only open a few months a year and so I really had very few openings; you know it was it was a beautiful thing and we talked earlier about your staff having your back.
So, the recognition and the rewards comes in and all how you treat your people and you know no one in the restaurant from my management team, to myself, to my staff was too important to notice the detail that needed to be fixed whether it was a window that was dirty, whether it was a cigarette butt outside the door that needed to be picked up, we obviously if I noticed something, if we were all members of the same team the same family with the same common goal of dazzling the public and giving every customer a great experience. So, that was sort of this magical formula that became a philosophy and then the recognition and the rewards really kicked into high gear.
Interviewer: You know what I want to do is. Bring you back or actually we talked about if I want to put you in a little bit of suspense and I can encourage them to go find our succession our session American mission or rewards because you absolutely have to find where Roger talks about this stuff and it's part of it part of his programs as well as well he touches on and I mean it is it will make the difference between your staff. You know taking it to the next level the way he thinks about the weight of the so what will touch on in the future and we touched on it another session but I want to I want to get to the marketing piece here which is equally important you know where Dennis I think three big success factors and that's cost controls and proper Max edition which you touched on the staff development which we just covered and now marketing and affinity.
So, you could have all those all those things and but yet you have to you have to continue to bring new people and you have to create that loyalty and that affinity and you actually already touched on a couple of those ideas but I know from our past call that you also really, really dig into the stuff as ways that you know special nights special ideas, ways to drive traffic What's the kind of kick it off with one of your favorite tips
Interviewee: Well, it goes back to staff again and I mentioned that the staff can either be Brand Ambassadors and marketers for your business or they can totally bring down the show right? So, when you think of your staff as a Brand Ambassador and that culture of hospitality family and Barnum talking about I didn't teach them this stuff I didn't have to train them and social media is so huge today, online reviews and all these things that my staff were having so much fun in my place and it was like this clubhouse.
Between the customers and the staff both of those two groups were sharing and singing their praises all over social media so my staff were posting you know what events were happening that week and how much fun they were having. And the customers who are doing the same thing and that became you know this word affinity really mean Loyalty doesn't it means people want to go where they feel like they belong like in their place.
And I hate to use clichés you know we talk about the tiers formula that classic he show you know people want to go where everyone knows their name and that was the atmosphere in my restaurant and that's what I teach other operators to do.
Is to get that fierce formula going so that your customers are spreading the word and then you don't need to spend tens of thousands of dollars a year on traditional marketing you know the radio, the print, the TV all that stuff is such a shotgun approach where you're just scrambling trying to get new business in the door and it's costing you lots of money and you don't have any accurate way of tracking your return on investment you don't know where that customer came from unless you're Korean every customer and every cable how they heard the restaurant.
But instead internal marketing using your staff in the four walls of your restaurant to promote what special, what's unique, what your hopes are?
That builds affinity with your customer and when your staff your team are spreading the word about all these cool exciting things taking customers on that magical journey. Then that chemical catches on and your customers in out there telling their friends and their family and anyone who'll listen what a great time they had at your place and you just did it a second ago Jim just told us about this great experience you had a restaurant where that server was just hitting on all cylinders making great recommendations just turning you on to the whole experience and you were dying to go back there.
It's too bad it wasn't a consistent experience but if you can train your staff to deliver these consistent experiences to every customer, then that leads to affinity.
So, that is just sort of the germ of the idea and then you come up with special promotions that drive business on different nights we put a huge emphasis in I mentioned family you know we were very friendly because I learned a long time ago that the kids often determine where the family goes out to eat.
And if you're the fun place and if you come up with lots of hooks for the kids you can be sure that that's where they want to go you know and I'm not I'm not telling you to become a chuckie Cheese's for anything like that but I got lots of ideas that really turn the kids on and the kids bring the families and it just creates excitement and then we have a life of ideas that bring customers back again once they've come in, they've experienced the restaurant.
One of the more powerful things we did and this goes back to the cash cow idea you know we created these custom branded lottery ticket and you know people love to play the lottery because it's got that element of surprise and excitement and you're hoping you win something and you take it you take the quarter of your pocket you scratch it off a little surface you know the squares the circles whatever they are so we had these custom branded lottery tickets printed and we would pass these things out you know our cheque prisoners after people who would pay their cheque is that thank you saying hey you might win something thanks for coming into our restaurant but every single ticket was a winner so when they would scratch this thing off everyone was jazz to win one of our cash cows.
Whether that was the garlic knots or whether that was the bread putting or the root beer whatever it was they won something absolutely free and nine times out of ten that was going to bring them back into the restaurant again, to spend more money and again the check averages were seventy five eighty bucks for the cost of a cash cow.
So, I guess in this column gave two ideas where simple idea and a couple of coupon can bring a massive cheque average and very little investment and that is part of affinity to evacuate the excitement and brand loyalty and then we had a super powerful mug club and that was probably the most powerful idea of all.
Interviewer: Well, we can ask you about that because I think the water ticker I forgot about that when I was really neat people love the bounce back everybody loves to win
I know the details of the Month Club because we've talked about it and but share and share with folks because it doesn't work for every single restaurant but you know people can spin in their own in their own way you can't you know it's a great opportunity for cash flow and for profitability and for affinity.
Interviewee: So, walk through it yeah I mean if you have a bar or if you have a coffee shop or anything you can sell these mugs that are personalized and they're customized and the customer doesn't take them home but there's a lot of value added with the idea of a club so for in our experience we created a club where we were selling twenty ounce ceramic mugs of any variety of beer we had eighteen different beers on tap combination of you know domestics and imports as well as microbrews or local craft brews had quite a selection and people would pay us $50 upfront to belong to this club and for that, they got their personalized mug and they would you know they would draw on them they would put stickers on them and they were all numbered and suddenly there was this appeal to have a very, very low number so everyone obviously when they came back to renew their mug they all wanted to like be someone the number one number two that sort of thing but you with the mug club membership you got a T-shirt that was a custom mug club T-shirt which obviously was advertising when they wore it around and then you got discounted beer pricing so instead of a 16ounce pint you get a 20ounce mug so obviously you get four more on says a beer for less than the cost of a pint that a regular customer would pay and then we have live entertainment on weekends where your mug club card would gain you access without paying a cover charge you could literally dock the line and go right to the front of the line in our security team or let you in if you had a mug Club card and then there was all of these rewards programs attached to it we programmed our point of sale to recognize the mug club swipe card that was basically a credit card with a mag stripe on the back and you can program this thing for loyalty and reward so that every of the card whenever this person's card was swiped for five or six times or whatever it is you'd win a prize or at the end of the season we can track total spending from our mug club and we awarded an amazing custom medal and hand carved wooden bar stool with the person's name in their mug club number on top to the highest spender each season.
So, there were a lot of promotions a value added that was added to this whole thing so it was a powerful program and you can actually find sponsors radio stations are really big sponsors they'll put their logo on these mugs or different companies out there so you can get the sponsored and it's free and clear up front cash flow and it costs you nothing little to nothing and look at the marketing value.
So, year after year we would sell more and more mugs and then you can put a waiting list together to create an element of exclusivity and people are dying to get into the club that sort of thing. But just before I sold my restaurants we were approaching 900mugclub members in this restaurant; it was extraordinary and that was all obviously free and clear cash flow what could you do with an extra 10-20-30-40-50 thousand dollars depending on how many of these things you can sell and think of the business.
I mean these mug club members who are in our in our restaurants probably 3-3-4-5days a week and it became their clubhouse and they were the brand ambassadors now bear putting all this stuff on social media and online reviews and it just became the super powerful program and it just gained momentum like a runaway freight train and it was so much fun and it just builds our business you know, it was a core audience and that was a super profitable part of our business too.
So, any restaurant that has a bar can start small, 10-5-100miles and there's benefits to that even if you don't grow to 900
Interviewer: one of the things I captured right there at the end was one of the momentum of it because if you have feeds on itself like take for example of you know if you're up to 900folks there but now it's my choice, where I’m I going to go? I’m I going to go to a place that I have a mug club where you have a chance to win a barstool or my going to go to try some other place?
You know it's like now it becomes an easier decision to choose you force the next guy and that's what it's all about and you what you want folks to be the have a more reasons to choose you because there are literally you know 50-100different places people can go on any given night.
And so why are they going to choose you? You've got a you've got to create the hooks you talked about the Mug Club I know your family I thought was killer lottery tickets were terrific so you've got to develop the hooks where people are thinking about what's special why command you talked about the kids being a driver to make the decision and I can speak to that because we have three kids under twelve kids where you want to go not that place again well not that one you know they don't have they don't have anything appealing for the kids.
So, what give us a little laughing with us on that? So share it because I think son's killer that you have when how we attract kids and families, it's actually pretty killer.
Talk about I think it was the coloring program you had you had so many things what do you got?
Interviewer: It was a combination of many different things; it started with, if your restaurant has any extra real estate, or corner or room, anything that isn't being used with tables or whatnot, I mean it could be a separate profit center unto itself where you bring in these even if it's just one or two of those arcade games, whether it's a crane you know where the kids try to win the stuffed animal or you know it's a candy crane, it's a stock animal crane, it's video pinball or the early latest interactive virtual reality game whatever you got two or three of the games you don't have any cock up front because there are the music and game companies out there in pretty much most major cities, I was in a rural area and within an hour and a half old neither was a game company that provided this so they'll bring the games in you don't have to pay for them you just give them a real estate and then it's a 50-50 split on the revenue that the machines generate they'll give you a change machine so kids can turn their $5 bills into quarters that sort of thing.
And then the company comes in and they cashes it out you know they cash the games out once a week and they give you their the cake and you know these games are bringing in like $1,000 a week. For me, with my 50% split and that was just a hook for the kids, the kids loved it, the Parents loved it because most would have most Parents want when they go out be with their kids game they want an uninterrupted fun night out where the kids are having fun and the Parents can have a nice dinner to themselves without you know being bothered.
And so, it's a convenience right so suddenly you're entertaining the kids the parents are happy to give the kid a $5-$10bill, to eat your meal quick and go play on the games while enjoying our meals and then we have hooks that brought them back every single kid we had a helium tank right at the host counter in every kid had a custom logo balloon from our restaurant as they walked out the door.
We had a prized treasure chest where the Parents were paying the cheque the server would bring the you know the pirate chest over and the kid could reach in and get one of those you know yeah maybe it was a parachute guy will class the man with the kids throws the parachute near and it comes down or maybe it's a yo-yo or a ring or whatever you know just those nifty necks but the kids loved it but what you were talking about earlier was the coloring contest and it was a hook to bring them back.
So, every single got a coloring sheet which was also our kids' menu and we told them hey we're having a contest and if you win, make sure you put your Parents' e-mail address on the back of your entry; we’ll hang these up and if you win will notify you. Well again, every kid was a winner so every single email address got an email saying hey you got a your kid won the coloring contest than you here's a $5 for them to come back; to bring in bring in this email and see your kids artwork on the wall you know blah blah blah and if that didn't drive more of those 70-80-90 dollar tickets for the cost of a $5 gift certificate which my food cost was 28% percent so 28% of five bucks do the math it cost me nothing to get another $85 check average out of people and this just built the business.
And it was fun and the kids loved it and it just drove lots of excitement so they helium balloons, the arcade games, the prized treasure shirt, you know the custom kids' desserts whatever you do take care of the kids if you if you've got a family friendly restaurant you can crank it up tend not to use and drive a lot of repeat business by marketing to the kids.
Interviewer: You see and you know, be a good little setting good job Rodger you know the one thing I'll add on there in you capture the data of those email addresses, use the data because I swear to god there's a restaurant that we go to the does a little bit of something similar with some coloring and be you know put your Parents name on the on the sheet or your email with maybe the email and the phone number and have I ever received an email from that restaurant?
The answer is No I have not so I know the kids put my name because they want to win something they put my email on there and we're not going into their database I don't know what they're doing with it they must have stacks and stacks and stacks of pass' a popular place to collect a lot of a lot of these things so so go ahead there's two parts of that equation if you run something like this and you're collecting the data you need to take the next step and use the data and build it build your own database of customers that you can reach out to this something and I get passion about it you need to control your database of customers that you can reach out to when you want to.
Whether it's about a change a special promo or whatnot you need to have a database that you can rely on and go to. So, I would give folks a hard time they collect the data but they don't use the data you know and saying oh yeah. So, let so let me let me kind of bring us full circle we wanted to get a whole bunch of tips today and thank you Roger for doing that I know I have a scrappy little page here full of a whole bunch a bunch of things I hope folks are likewise and took some notes and if you grab one or two or three nuggets we've done our job of giving you some tips Roger literally has hundreds more ideas like this and in his programs, in his sales stars in his academy that walks you through everything his book we touched on earlier and I ran through a sequence of calls with him so I know the book is incredibly valuable. So, check out his stuff if you were to point people to your stuff and give them a quick overview what would you say?
Well, there's really three tiers of products you can find everything at restaurantrockstars.com. You touched. In the book which is a turnkey you know financial tool to help you rock your profit, it's sort of an overview of my 20plus year journey in this business and all the School of Hard Knocks stories that happened to me and then how you can avoid those things and make more money in your restaurant that doesn't include the spreadsheets we talked about that are totally automated and the audio tutorials it's a huge value it's available for a PDF download if you like to read on your computer or you can get the audio version which is pretty brand new if you like to listen in your car that's exciting too.
Film stars is a complete training system it not only trains your staff to serve and sell like we talked about it also helps you build your dream team lots of ideas there and how to do that and then the Academy is soup to nuts whether you're starting a first restaurant it's everything you need to know to start that restaurant if you're going to buy a restaurant that's for sale, if you're going to start one from scratch, if you're going to buy land build a building all the permits and licenses you need, that's the first module the second one is all the cost control the third one is the staff development training recognition and rewards program support module is all the marketing in a bit of the ideas with some of which we talked about today but like you said there's so many more that we didn't touch on.
And then the final module in the academy is all about a efficiencies; how you find efficiencies across the board, that also increase your bottom line profit and it's all in this one turnkey package called The Academy and again it includes the audio tutorials and all that stuff and you can learn so much and you can apply so many of these ideas and the ROI really does go through the roof for a very small investment, so you can find all the stuff at restaurantrockstars.com.
Interviewer: Yeah that’s awesome Roger, prefer that will put the links along with the content so folks can get over there to that, I keep reading Roger back because I love the way he shares the stuff that, he just really lays it out it in a way that everybody can grasp and think about wow I can really use that in my operation so that's why I keep on bringing back to my audience hundreds of people because I can see the link sometimes you know one of our customers have got it going to head and purchase Rogers stuff I highly recommend to everyone to check out he also does free content through his Podcast on his website so make sure you're on his list and getting his stuff you can use deliver great content for our for operators like yourself that are looking and we're I know we're all just fighting in this challenging environment.
So, you've got to do something different you've got you can keep doing the same thing because you get the same results you got to look for tips and tools and ideas to change it in so very source of that is always I appreciate you spending your time and sharing your wisdom with it with your audience thanks
Interviewee: Thanks so much but one last thing James you know if you're a listener to Jim's content and I'm happy that we're having this call, please reach out to me via email if you've got a restaurant question that you're dying to get the answer to or if you just need some advice or tips, I love to answer customer e-mails, you can reach me at our [email protected] Tell me that JAIME sent you I'm happy to answer your questions.
Interviewer: Often, well, thank you do not. Do that because oh he'll he'll jump on the whole jump on the mail for you and I think you even for certain folks are for the money and what they're doing with jump on the phone and help model bit.
So, please do that that's a that's a great idea folks this has been JAIME OIKLE of runningrestaurants.com along with Roger Bogan from restaurantrockstar.com You can check them out on the web for all the stuff that they do.
It’s been a great session hope you hope you enjoyed it we shared a lot with folks today, if you’re looking at for more tips, you can check out our website as well for over thousands of articles on all sorts of content for us and operators and that is that runningrestaurant.com Have a great day everybody, thanks so much.
Thanks for listening to The Restaurant's Rockstars Podcast. For lots of great resources, head over to restaurantrockstars.com and while you're there, download a copy of the book, ‘Rock Your Restaurant’ it’s a game changer, See you next time!
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