Monthly Archives: May 2014

Why Customers Don’t Come Back

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By David Scott Peters

www.therestaurantexpert.com

You spend thousands upon thousands of dollars a year driving customers through your doors. You’ve tried advertising on the radio, in the newspaper, in magazines, in Money Mailer, in directories, on the movie screen, couponing and more — with some success.

But with all of this money being spent, sales aren’t moving up as fast as you would like or even worse, they are actually going down. Why?

In a past study called “The Spirit of Service” done by the National Institute for the Foodservice Industry (NIFI), they detail six main reasons why customers don’t come back. I not only want to share them with you, but I want to share some ideas on how you can counteract them, with the exception of one.

Reason No. 6

Let’s start things off with a bang, so to speak. It’s the one thing you can’t do anything about. It’s that 1 percent of your customers die. This is just the reality of it all.

Reason No. 5

3 percent of your customers will move out of the area. For many restaurant operators there’s not much you can do about this because when someone moves, they move literally hundreds of miles or more away from your restaurant. But for many restaurants in large metropolitan areas, moving may mean moving to a neighboring city that is still within an hour driving distance.

So staying in touch with your guest becomes extremely important. Just think about this, if your customer moves 45 minutes away you have a choice, lose their business for good or fight like heck to get them in at least four times a year.

Let’s look at the economics of this. Let’s say this customer used to come into your restaurant only 10 times a year. They’d always come in with at least one other person and spend an average of $40 a visit. Every year they would spend at least $400.

If you’ve had them in your marketing database and have created a system where they can update their information with you and continue to receive your newsletter by mail and your e-mails, you might be able to get them to continue to come into the restaurant at least four times a year. So instead of losing $400 a year, you’ve managed to keep $160.

While that may not seem like a lot of money, when you multiply that over the lifetime of visits by that customer and then by the rest of the 3 percent who move… that can be a lot of money.

And don’t forget to make sure that as a part of your marketing budget you employ some form of new-mover marketing, because for every 3 percent moving away there are new families moving into those empty apartments and houses. You need to have a system in place to drive them through your doors quickly so they make your restaurant a part of their dining habits as they’re forming them in their new neighborhood.

Reason No. 4

5 percent find new interests or friends. OK, I know you’re thinking, “that’s completely out of my control.” While this is true, if you follow the example given in Reason No. 5, you will again magnify the importance of building up your customer database and staying in constant contact. Just remember interests and friends change… and they may come back.

Reason No. 3

9 percent change for competitive reasons. This reason is the one most restaurant operators lose the most sleep over. A new restaurant is opening up next door or around the corner. The new restaurant is in direct competition with yours.

If you’ve done your job right and have a restaurant that is clean, has great service and great food, they will come back… and usually do. And it doesn’t hurt to keep communicating with them with your monthly newsletter and e-mails. Remind them that they matter and continue to invite them back in to your restaurant.

Reason No. 2

14 percent change because they are dissatisfied with the restaurant. OK, this speaks volumes to what I just said, “if your restaurant is not running well on all accounts… there’s not a lot you can do except correct it and rebuild…”

So where do we start? Let’s cover a little bit of Restaurant 101 here.

  1. Make sure your restaurant is in clean working order.
  2. Make sure hot food is hot, cold food is cold and ticket times are in an acceptable range for your restaurant.
  3. Make sure every employee is trained and ready to give your customers the best experience they could possibly desire.

Reason No. 1

68 percent encounter an attitude of indifference or unconcern by one or more employees.

Just look at that number, 68 percent. This mean 68 out of 100 customers aren’t coming back because of how your employees conducted themselves, 68!

So as a part of your training program you need to not only cover the basics from food safety to steps of service, you need to make sure you train hospitality and the idea that the customer comes first!

If you do nothing more than tackle Reason No. 1, “encounter an attitude of indifference,” your business will literally explode!

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

 

Don’t Give ‘Em a Management Entitlement Program

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By David Scott Peters

www.therestaurantexpert.com

If I had a nickel for every time I am asked about how to properly structure a management bonus program, I could start thinking about retirement. No really, this has got to be one of the most-asked questions.

The truth is that structuring a bonus program is actually not that difficult. Often the bigger challenge is having the right systems in place to build it properly. Without the right systems, many management bonus programs are what I call management “entitlement” programs, where managers expect a bonus just for showing up.

To help you avoid this profit-sucking mistake, I am going to share with you the six systems you need to have in place to write a useful management bonus program that will encourage your managers to earn their bonus:

Job Description

This is a no brainer, yet often overlooked when we talk about management. Without a detailed job description for each level of management in place, you have managers on the floor who have no real clue of what their job is or how well you expect them to do it.

This becomes your paint-by-numbers outline when you start to write your bonus program because your minimum expectations are already outlined in black and white.

Budgets

Budgets give you, the operator, the ability to set targets, measure progress, evaluate performance and ensure you run profitably. Honestly, without a budget and targets in place there is no structure for any reasonable bonus program.

Prime Cost Control Systems

When you have budgets in place for your restaurant, you have cost of goods sold and labor targets (together they make up what is called your prime cost), but do you have systems in place to help management achieve those targets? You must give them a road map of how to control those numbers and achieve their goal, or you might as well not even bother implementing a bonus program. They will never hit their goals, which ultimately translates to lost profits for you.

Scoring Systems

When I refer to scoring systems, I am referring to both those that you impose and those that are imposed on you, such as the health department for the former and customer comment cards for the latter. Profitability alone should never be your sole focus. Implement, utilize and evaluate your scores. They will tell you a lot about how well you are doing and should be included when evaluating managers’ performances.

MBOs

The concept of MBOs was originated by Peter Drucker at The Harvard Business Review. He is called the Father of Modern Management, and he outlines MBOs in his 1954 book, The Practice of Management. There are five basic steps to the MBO Process, which are: 1) Review the objectives the company would like to accomplish, 2) Set objectives for your management team, 3) Continually monitor progress, 4) Continually evaluate progress, and 5) Reward the achievers. When you’ve done all that, you then start the process over again.

Timely Reporting

Last but not least, you have to have timely reporting. It’s not good enough to have all of these systems in place if you can’t gather, analyze and distribute your results to your team on a timely basis. Taking too long can de-motivate your management team and even worse yet, cause you to lose money.

With the right program, your managers will work harder than ever to earn that bonus and won’t blame you if they miss their targets. My goal with this article is to get you thinking about how important systems are in your restaurant and how they relate to rewarding your management team. Go down the list and take an inventory of what you have in place and if something is missing, add it to your I MUST IMPLEMENT LIST.

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

Retail Data Systems is Now Power Leader in Custom Solutions for the Independently Owned Grocery Industry in Southeast

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RDS Logo

May 15, 2014, Marietta, GA – Retail Data Systems (www.rdspos.com), the largest provider of Point of Sale hardware and software to independently-owned grocery stores in North America, has announced that industry veteran Steve Balentine is now heading up efforts in the Southeastern Grocery Division. Balentine is well-known throughout the industry for his exceptional capacity for understanding the complexities of his grocery clients’ needs. Retail Data Systems is the leader in full service solutions and custom integrations with a robust suite of POS-related products. This powerful combination of experienced leadership and nationwide resources has made Retail Data Systems a power player in the Southeastern Independent Grocery industry.

Recently named a Premier Point of Sale VAR of NCR products, Retail Data Systems can provide the most powerful technology that has been developed with successful grocery management in mind. NCR is the global leader in consumer transaction technologies, turning everyday interactions with businesses into exceptional experiences. Custom integration solutions are the key to getting the most from your POS related hardware and software, and RDS is leading the field with the most integration solutions for wireless and cloud-based products. To read more about our suite of grocery products, click here.

Walt Davis, General Manager of RDS Southeast, said “All the pieces of the puzzle have come together over the last 6 months for RDS to provide the ultimate experience for grocery businesses. From running the business back room to the customer interactions, we can provide all the products and services needed to create an outstanding business model. Our variety of products and services provides the added benefit of a one-call to fix any issues that may arise.”

About Retail Data Systems

Retail Data Systems (www.rdspos.com) is the largest provider of Point of Sale hardware and software in North America. Founded in 1950, RDS now operates over 25 offices serving customers across the nation providing complete Point of Sale technology. Our team of over 400 professionals ensures our customers the best 24/7/365 service available. Our list of industry leading POS hardware and software products provide a variety of solutions for companies large and small.

Media Contact for RDS Southeast:

Mary Koronkowski

Retail Data Systems SE

Marketing Communications Manager

mkoronkowski@rdspos.com

678.279.8052 t

rdspos.com

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April 8th XP End of Life – Don’t be an Ostrich

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Windows XP was laid to rest on April 8, 2014.  It is survived by its siblings Windows Vista (stop laughing), Windows 7 and Windows 8.

Before you read further, this does not pertain to XP embedded.  You still have time left on that; end of life for XP embedded is January of 2016.  Not sure if you are on XP embedded?  Keep reading and contact us. We can help.

The passing of Windows XP marks a major milestone in the progression of desktop technology.  Many times Microsoft extended the life of the platform because of the success it had in the marketplace and the outcry of the impact ending support would have on the PC community.  Finally, just a few short weeks ago, Microsoft pulled the plug; this time for good.

A few months back we posted an article about the “tsunami of viruses” that were likely to hit at end of life.  Thus far, those fears have not come to reality; at least not anything that has created any public outcry.  Why is this?  It could be the end of life was much ado about nothing.  It also could be as many reports suggest; thieves are targeting smaller firms.  The attacks are likely happening, but not getting the headlines.  Additionally, recent reports show the market share for XP has only dipped by about 1.5% since end of life.  Larger firms, especially since the Target breach, have shored up their networks.  Smaller firms often the laggards, not so much.  Small business is vulnerable and the crooks know it.

One other major concern if you are still running XP on your front or back of house systems, XP is no longer PCI compliant.  Ensure that all system components and software are protected from known vulnerabilities by installing applicable vendor-supplied security patches. Install critical security patches within one month of release. (Source: www.pcisecuritystandards.org) 

If and when your business is breached and you are running Windows XP, you will likely not garner much sympathy from the PCI Security Council as they determine origin of fault and levy fines.

Many store owners we talk to are not even sure if they have XP.   There is a lot of misinformation out there.   If you are not sure if you are vulnerable, let us know.  This is not the time to stick your head in the sand and not take action.  We are happy to provide an assessment.    Whether or not you use RDS to help with the upgrade or change, protect yourself.  Upgrade your system and remove this liability from your business.

How to Hit a Home Run in Labor Controls

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By David Scott Peters

www.therestaurantexpert.com

How do you make money in the restaurant business? The reality is it’s the small things that add up, such as reducing the cost of cheese by a nickel a pound, or reducing the number of garbage pickups a month by one. But every so often, with the bases loaded, you bring up your cleanup hitter to clear the bases with one big swing, known in baseball as the “grand slam.” If that cleanup hitter is a system, then with that one system you’ll reap huge savings.

This article is about choosing the system that is your cleanup hitter. It’s the one batter who can hit a restaurant profits grand slam for almost any restaurant. You simply need to know how to send him in.

Start with the right equipment

Using the right equipment or tools is how you control your labor expenses! And controlling them starts with a labor budget and labor budgeting system.

First, you need to know your target labor costs. That starts with knowing what your prime cost should be. That’s the sum of your total cost of goods sold and your total labor costs. Prime cost for a full-service restaurant needs to be 55 percent, no matter what type of restaurant you are. Please note that it doesn’t matter where each of the individual expenses are, just so that together they don’t exceed your prime cost target.

You need a good warm up

Before you can hit the big one, you have to be warmed up. To warm up, you need to calculate what your labor expenses were last week. This will give you some key numbers to ensure you hit your projected labor budget for next week. Below is an example of what you need to calculate.

DSP 1

With this information, you’ll be able to tell each of your managers, by department, how many hours they have to schedule and how much money they have to spend (not including taxes, benefits and insurance.)

Swinging the bat

Now that you know what your average hourly wages are by department, average hourly wage for all line employees and the percentage of hours by department, you can now follow my step-by-step system to ensure you hit your target labor costs and ultimately make more money!

1)      You need to know how much you have to spend on labor next week. To do this you need two pieces of information: a) your projected sales for the week; and b) your target labor cost percentage, excluding taxes, benefits and insurance.

2)     How much money do you have to spend, minus management salaries? Since management salaries are a fixed expense, simply subtract their salaries from your total dollars available.

3)      How many hours do you have available to schedule for your line employees throughout your entire restaurant? Take your average hourly wage for the entire restaurant and divide it by the total dollars you have to spend for all of your line employees.

DSP 2

 

 

 

 

 

4)      How many hours does each department get? You were probably asking yourself earlier, “Why do I need to know the percentage of hours each department used last week?” By multiplying those percentages by the total number of hours available for next week, you quickly determine how many hours each department gets.

5)      Last but not least, based on average hourly wages by department you’ll be able to allocate every penny each department gets and stay within budget… guaranteed!

Hitting the home run

You should be saying to yourself, “WOW! That’s really easy!” And that’s because it is. Your final step is to give each manager the number of hours they have to schedule for next week and how much money they can spend. Then have them write their department schedules. The attitude here is to schedule to stay within budget, not just to fill shifts.

By following my step-by-step labor budgeting system… you’re in position to hit your very own restaurant profits grand slam!

 

 

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

 

Small Family Operation, Big Mistakes

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By David Scott Peters

www.therestaurantexpert.com

There’s a small New-York-City-style deli near our office. They serve high quality meats and have incredible egg salad. What makes them a draw for me is they put their sandwiches on their bagels that are made daily. The combination is really good.

But with that said, they do so many things that just kill me to watch. Let me share a typical visit for lunch. After a few lunches with them, I can hardly stand to go in anymore because I can’t stand to watch them make so many mistakes that are costing them business.

Let me tell you what I see as their mistakes and how they should go about fixing them.

1)      Checklists – The restaurant was dirty because they don’t have checklists. We teach that checklists are the foundation of ALL restaurant systems because they set standards and expectations. Without checklists, especially in a small family business, everyone has their own idea of what clean means. If they had checklists in place, there would be only one standard for everyone to follow and nothing would get missed.

2)      Point of Sales System – They’re using a cash register – which is a horrible idea! If they actually had other employees it breeds theft. In their situation I highly doubt internal theft is even remotely a concern. But, when they type in the sale price of everything sold, they lose their ability to analyze their sales mix to find ideal food cost or just know what their customers are buying.

3)      Customer Service Training – While I love that they are a small family business, they have no sense of customer service. They unfortunately treat you like an inconvenience, politely to your face. If they put a “WOW” customer service program in place, they would kill the competition because they would endear the customers to them and get them to visit and say, “I know the owners!”

4)      Selling Tickets – You think that today everyone would understand Restaurant 101 includes staging and selling tickets. If they would learn to fire items and work their stations as a team and call the customer when the complete order was up and ready, they would instill a sense of urgency and improve customer service. I wouldn’t be done with my sandwich by the time my wife gets hers.

5)      Recipe Costing Cards – It is 100 percent clear to me that this restaurant does not have recipe costing cards. Why? Nobody can sell a fresh bagel with Boar’s Head meats in generous portion and give you a fountain drink for under $6.50! Heck, the sandwich itself should probably sell for more than that. Add the fact that they are giving up $2 – $2.50 for every sandwich they sell, they are committing financial suicide! Charge for quality. Charge separately for sodas because customers don’t price shop a drink.

So what about you? Do any of those situations sound familiar to you in your restaurant? I bet some do! Let’s run through each question you should be asking yourself.

Do I have checklists in place for every position and every shift in my restaurant?

Do you have a point of sale system or better yet, is it accurate?

Do you have a real training system in place?

Is your kitchen run professionally by professionals?

Do you have accurate recipe costing cards done for ALL recipes?

Be proactive in your restaurant! Let us help you make sure your restaurant isn’t making these common mistakes.

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

Retail Data Systems Appoints New Southeast Grocery Sales Manager

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Retail Data Systems is happy to announce the hiring of Steve Balentine. Balentine has joined the Retail Data Systems (RDS) Southeast office sales force to further develop our growing portfolio of regional and national grocery accounts.

Retail Data Systems Appoints New Southeast Grocery Sales Manager

With more than 30 years in the industry, Balentine brings a wealth of knowledge and experience with POS grocery systems and PCI compliancy. He has worked with many clients over the years, including regional and national warehouses like Supervalu, Piggly Wiggly, Nash Finch, Merchants Distributors Inc, AG South and W. Lee Flowers.

“Industry trends toward cloud-based transactions and wireless solutions are being met here,” said Balentine. “RDS has the resources to integrate today’s web-based applications with the latest POS solutions. NCR’s appointment of RDS as a premier POS dealer and their national presence were also strong factors in my decision to join RDS. These powerful products will allow me to offer my clients the best path to the future.”

Walt Davis, GM of RDS Southeast, added, “Steve is widely known for his excellent customer service in the grocery market. His appointment is a sign of our continuing commitment to excellence in customer relationships. We are fortunate to add someone of Steve’s caliber to this position. I am confident that he will play a significant role in meeting our goals for this region.”