Secrets of the World's most successful restaurants

More Americans are dining out than ever

In 2000, 45% of the family food dollar was spent on eating out.

In fact they are spending more than ever eating out:

1990 - $239 Billion
2000 - $376 Billion
2010 - $577 Billion

with 54 % of the food budget.

New restaurants

• In 2000 there was approximately 831,000 restaurants in America
• By 2010 there are project to be over 1 Million places to eat out at.

The realities of this growing market…

• With more restaurants opening, competition increases, so do failures.
• More educated consumers demand higher quality products.
• Restaurants need their meats and produce in a timely manor.
• Suppliers need to reliably and successfully meet those demands.
  

  Restaurant failure rates

• Restaurants are one of the riskiest business ventures.
• 80% of all restaurants fail within 2 years.
• With most other types of business ventures only 1 out of 6 fail
  in 4-5 years.

Even poultry wholesalers have experienced an increase in competition

• The poultry wholesaler market has become very competitive.
• The number of wholesalers has been declining as the
  competition heats up.
• In 1992 - 1224 poultry wholesalers.
• In 1997 - 1040 poultry wholesalers.

Supply and demand

To run a successful business, each owner needs to ask themselves:

• How reliable is my supplier?
• How flexible are they to my needs?
• Most of all, what’s the quality of the product?

Building a restaurant

• How your restaurant can have a totally predictable success.
• Secrets only the best restaurants know.

  Lesson one: Understanding lifetime value.

• Do you know the lifetime value of your average patron?
• First, you should know that the vast majority of people are
  known as "Habitual buyers."
• They form habits easily.

  How "habitual buyers" can change everything

• Studies show that only 11% of buyers like to always try
  something new.
• 89% will stay with what they know and trust.
• Let’s say that a loyal buyer dines with your restaurant once
  per week and spends only $40 with you each time.

Five year life-cycle of the habitual buyer

• The average lifecycle of a habitual buyer is five years.
• $40 per week, X 52 weeks, X five years = $10,400
• When your waiter goes to wait on every diner, do they think
  in terms of them being a $10,000 customer?

  And that’s conservative

• The 80/20 rule. 20% of diners will drive 80% of restaurant revenue.
• Yes, you should treat every buyer like a $10,000 customer,
  but SOME are worth $100,000.
• In a study conducted by Kaleidoscope Media Group, some restaurants have identified clients who eat out
  3-5 times per week.

  The KMG Study

• A frequent diner who eats out 3-5 times per week,
  may eat at your restaurant 2-3 times each week.
• In the KMG study, they found some families of successful households will spend $100 each time they eat out (Family of four) and frequent the same restaurants as those restaurants have become familiar with all their choices.
• And they may buy for up to ten years.

Are you wise enough to cultivate them?

These frequent buyers, with successful households are worth $100,000 to you if you’re wise enough to cultivate them.

Two critical lessons in this section

If you’re thinking about EACH buyer like a $100,000 customer:

• The KMG executive was seated at a table near two movie stars.
• Wolfgang came over to that table, shook his hand and then
  had the waiter bring them some free samples, small tastes of some of his best dishes.
• Wolfgang made the executive look good in front of his guests
  and created a lifetime buyer.

  Other things that help you capture loyalty.

• Today’s consumer is more demanding about what they want.
• Restaurants have noted an increase in consumers looking for healthier choices. This is attributed to the aging baby boomers.
• Restaurants are reporting that over 70 percent of consumers
  are more interested in customizing their food choices today than they were two years ago.

  Learn their quirks

• The bigger your effort to learn the "customized" food
  preparation of your clients, the faster you breed loyalty.
• This is a huge opportunity if you’re wise enough to pamper
  those diners.

  Nuts and bolts

• Waiters should always give their name.
• They should always ask: "Is this your first time visiting us?"
• Are they from out of town or do they live in the area?
• If they are from out of town, how often do they come there?

  Your waiters are your salespeople

  Give your servers sales training.
  Here’s a quick session:

• Establish rapport, be interested in them.
• Learn about them. Not just their food tastes, but where they
  are from, etc…
• Make recommendations.
• Know your menu and the choices.
  Encourage them to try different and additional options.

  

  Bottom line on service

• If the service is fantastic and the food is mediocre, the
  patron may still be loyal.
• However, if the food is fantastic and the service is bad,
  you’ve lost that patron.
• If you have BOTH good service and good food,
  you’ve got a winning combination!

  Upsell, cross sell

• These are sales terms.
• Cross sell means to add an additional item to their choice…
• Upsell means to add more to their choice.
• Some restaurants will have larger size portions for just a
  little extra.

  The point is to encourage more choices.

Take market-share and breed loyalty

• If you have sales-trained servers, and you’re thinking of
  breeding remarkable loyalty, than you can do things others
  would not do to gain market share.
• Think of every possible way you can give away a free dinner
  to new patrons.
• The two-for-one for first time eaters.
• Special occasion promotions.

  growing meal choice

• We sponsored this program because we’ve noted that Duck
  is becoming a very popular food choice.
• Why?