If you've spent some years in business, you know that tough times come and go. Whatever the state of today's economy, whether we are entering a recession or not, it isn't going to last forever. Eventually, every restaurant experiences periods when customers aren't streaming in, the phone isn't ringing often enough and the landlord is calling for the rent.
When things are tight, it may seem natural to pull in your horns and take shelter until the storm passes, but that's exactly the wrong thing to do. Even in lean times, plenty of customers are out there. That's why you need to sharpen your management efforts while your competitors are slacking off. When the smoke clears, you'll be stronger than ever.
Here are nine battle-proven survival techniques that can help strengthen your business in any economy:
If customer satisfaction is the mashed potatoes, marketing is the gravy. But marketing involves far more than sprucing up your print ads and website. Marketing is a complex challenge, all the more so in businesses operating in a specialized niche such as restaurants. If you are to achieve optimum success in marketing your business, you must be willing to spend time analyzing your market and your competition.
Keeping your business healthy and profitable requires an ongoing marketing program. There is no other way. Competitive prices alone won't do it, nor will good service alone.
Marketing embraces all facets of your operation. To be an effective marketer, you must nurture and promote your business image, sell yourself as well as your restaurant and concentrate on making your food and service the best value for discriminating customers.
Numerous studies over the years have shown that, on average, it costs five times more for a business to find a new customer than to keep an old one. Focus on the significance of that statement; it is one of the most powerful concepts in the world of business.
With competitors standing ready and anxious to snatch away your customers and prospective customers, and your awareness of the cost of replacing a lost customer with a new one, you can see the importance of never giving even one customer a reason to stray.
Once a new customer enters your restaurant for the first time, you've done the hard part. Now, your job is to instill the notion that dining with you will always be a satisfying experience. A major part of your overall marketing must center on ways to make sure that he or she never has reason to leave you for a competitor.
The next time you visit one of the chain department stores such as Sears, Target or Macy's, look at the housekeeping. See how the floors are clean and shiny, the shelves neat and clean, windows and other glass sparkly bright. That's no accident. It's likely that the maintenance crew was busy polishing floors and tidying up before you got out of bed this morning.
Companies with the resources to approach business as a science understand an important truth: People get in a buying mood more easily when the environment is neat and clean. Nowhere is immaculate cleanliness more important than in a restaurant.
That's why, if you want to separate yourself from your competition, you will become a better housekeeper than your competitors. Squeaky clean floors, neatly furnished and maintained dining areas and an inviting exterior are relatively inexpensive ways to reinforce your professional image.
America's most successful entrepreneurs, gigantic or tiny, have carefully developed a unique identity. Your job is to evaluate your strengths and then combine them to form a unique identity for your restaurant.
Perhaps you've been in business longer than your nearest competitors; or maybe you've gained a reputation for serving quality food, nicely presented, at competitive prices; or your staff is known for its friendly and helpful service. Whatever your marketable strengths, write them all down, study them and determine how to use them to separate you from your competitors.
Never forget that a complaint from a customer can easily be turned into a valuable asset. Some years ago, a major retail marketing study revealed that customers whose complaints were satisfactorily resolved became better customers of the company than they were before the incident that triggered the complaint.
When L.L. Bean, founder of one of the world's most successful catalog order firms, was starting out, he suffered what could have been a disastrous setback. Shortly after he began shipping his first waterproof, hand-made boots, complaints that the boots leaked started coming in. Determined to fulfill his promise of customer satisfaction, Bean returned the full purchase price to every customer. Then, he set out to correct the flaw in the boot's design. That was the beginning of the customer loyalty that helped to make L.L. Bean what it is today.
Sometimes, satisfying a customer complaint calls for measures that you may consider unreasonable. When that happens, think of the cost in time and money as an investment in your future. Replacing or comping an unsatisfactory dish to satisfy a picky customer is an inexpensive way to prove that you value customers.
Customer satisfaction is the most powerful advertising and marketing medium available to you. Nothing will build your business faster than customers bragging to their friends about you, and nothing will eat away at your business more relentlessly than unhappy customers complaining about you.
Yes, it can take money and time to resolve a complaint, and it can be trying when you feel the complaint is not justified. But remember that the dollars you spend resolving a complaint could be the most effective marketing dollars that you can spend.
Your customers' experience with your restaurant begins the moment that you or your employee answers the phone. Everyone who answers the phone must be trained to understand the importance of treating every caller with courtesy and respect. Answer the phone promptly. Never allow it to ring more than two or three times, and identify yourself by name in a cheery voice.
Never leave a customer on hold for more than a few moments. If you can't locate the information you need within a minute or so, volunteer to call the customer back. And always call the customer back when you have promised to do so. Even if you haven't been able to get all the information you need to answer the customer's question, don't force the customer to wait for a call that never comes. That's a certain way to permanently alienate a customer or prospect.
If you do any of your own billing for special customers, your accounts receivable system must be capable of telling you whether any accounts are overdue by 60 days or more. If that comes to 10 percent or more of your total A/R, you need a more aggressive collection policy.
Never delay sending out bills. Every day that you fail to process invoices is a day that someone else has the use of your money. The more casual you allow yourself to become about collecting the money owed you, the more casual your customers will become about paying.
Slow times are the perfect time to go back to your suppliers to negotiate a better deal. If one or more of your suppliers is feeling the pinch, the climate will be right to renegotiate. Many vendors will provide a discount for payment up front. Others are willing to consider discounts to loyal customers. Request an extension of credit so that your business can pay invoices in 60 days, and not 30. Offer to keep up your volume if the supplier can come up with a better deal.
Willam J. Lynott is a former management consultant and corporate executive who writes on business and financial topics. You can reach him at firstname.lastname@example.org.