However, innovation alone cannot help any business to survive unless the fundamentals are not in place.
Lately restaurants have been facing a slowdown in consumer spending. It has managed growth in revenue by increasing penetration and store count but per-store sales are majorly hit.
The main reason behind the falling sales and declining market value of the restaurants is the low spending of consumers, increased taxes and high competition due to new entrants in the business.
This is certainly not to say that the overall food industry is going downhill, but the stats clearly show that there are some parts and fragments where business of restaurants are suffering.
Tweaking the Menu: one of the best ways to attract the old customers is menu tweaking. In menu-tweaking, a lot of restaurant chains and food outlets either introduce new dishes, items and recipes while some just introduce some unique item for a limited time in order to generate excitement among the customers.
Right Allocations of Resources: A lot of industry experts have stated many times that the slowdown period is the learning time and to re-think the strategies which have gone wrong in the past and what we can do improve for future. Innovation is one key to sustain in tough times, and many restaurant players innovate their offerings, menu, marketing and pricing.
However, innovation alone cannot help any business to survive unless the fundamentals are not in place. Yes, we are talking about the right allocation of resources be it inventory management, cash management, technology, food cost, Human resource, raw materials or marketing (online or offline). Effective utilization of resource in slowdown will not just help any restaurant to sustain but it will also give the inner-strength to the business and build it to the core.
Listening to Your Customers: As Bill Gates said, “Your most unhappy customers are your greatest source of learning”. The quote of Bill Gates stands true for every business irrespective of the size, character or the industry. In present times, every restaurant takes feedback of their customers. Some take feedback out of courtesy and to show their customers that they are concerned about the customers but never listen to them. Taking prompt actions on customer feedback will not only help in retaining the old customer but also spread the good word of mouth which will help to attract the new customers.
In the earlier days customers used to be the “King”, so every order of the king has to be followed but in today’s time Customers are now “Queen”. The needs to be pampered, and so do your customers. In the highly competitive environment, the brand loyalty is big question mark on every marketers face. Ensuring repeat orders or re-visits of the same customer is tough and challenging. So, great service, great ambience or great food will be helpless if customers’ grievances are not resolved.
Expansion or Consolidation: One of the best ways to beat the slowdown in the restaurant business is to reach out to customers instead of customers reaching out to you. Meaning, big food chains can move into the locations where there is a certain amount of footfalls confirmed. For example – one can think of opening an outlet at Airports, Railways, Metro Rails (all three known as Travel Gateways) and big office complexes. At the same time, consider shutting down the outlet which is underperforming.
Loyalty Programs, Offers and Discounts: Discounts and loyalty programs are the traditional ways to win back the customers. An innovative loyalty program can help a slow running restaurant to retain the old customers. Use your CRM database and the reports to analyze customer behavior and ordering habits. Create customized offers and deals to attract customers to spend more. Your marketing efforts help a lot in this case. Engaging with the customers, and making them aware of the ongoing discounts and loyalty program campaigns is an important part of bringing customers back, and must not be ignored.
Giving-Up of Old Assumptions: In times when the business is running low, sales are not that exciting how they used to be, we say give-up!, Give up the old assumptions that you have learned in the past. The business environment is very dynamic and the food business is evolving on the daily basis as every other day there is a new player in the market to offer something unique and with a new experience. So, give upon on what you were doing in the past, be it the promotional strategies, consumer profile or the food offering.
Start afresh, have a new approach towards your business. Look for new food trends, and try to tap the new consumer segment. This ‘new-approach’ strategy will not just help you to identify your weak points but it will also help you to look beyond your regular business and evolve for better.
The author is the Co-Founder of POSist Technologies Pvt. Ltd.