Posts Tagged advertising

TRIANGLE THEORY IGNORED

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The Triangle Theory has been around a long time. It has been successfully used by many of my former employees and students. These days it can even be found in a number of places  on the internet.  It is a very simple concept, properly interpreted it says take care of your employees and customers and they will take care of your bottom line. The goal is for management to  balance the benefits of the business among the three sides of the Triangle. The smart  leader quickly learns that the more you invest in your employees and customers the faster sales and profits will grow. (This of course must be done properly to be effective….this is a plug for my book!)

I am watching with great interest the slow collapse and consolidation of the chains in the restaurant industry. Almost without exception the decline of various brands was caused by IGNORING the concept embodied in the Triangle Theory. Profits were the #1 priority and cost cutting became the #1 focus.  This of course was at the expense of the other two sides of the triangle, the employee and the customer. As sales AND profits declined, the obvious answer is advertising saying “please come back, we are not that bad!”. When that doesn’t work the next obvious answer is to buy them back with discounts, bundling and couponing! This all cost money so we are back to where we started……cost cutting!!!

Interestingly, well run companies with a balanced triangle, that are sold by their founders, are almost always immediately subjected to the profits priority and  the cost cutting strategy begins the never ending spiral down. 

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FOUR WALLS THEORY

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I was sitting at a car wash, 20 miles from my home, musing about the fact that I had driven past a number of new, fancy car washes, that didn’t have lines to this older less attractive car wash that did. Why? You guessed it, THEY GIVE A GREAT CAR WASH!

While writing the book I have become a student of current business in general and specifically the restaurant business. Most, experiencing declining sales, are focused on all the outside reasons for poor performance. The ‘economy’, fickle consumer, rising cost, and the old tired facility. Nothing has changed these were the same problems identified when we first launched Friday’s, in the early 70’s. Todays answers are no more creative than those of several decades ago. DISCOUNT, ADVERTISE AND/OR REMODEL but don’t take responsibility and look inside the four walls at product, service and cleanliness.

The Four Walls Theory teaches us to look to ourselves and inside our four walls of operation, literally or metaphorically for the answers.While monitoring many, “looking in all the wrong places” I am also happily monitoring some great success stories. The differences are dramatic. You can read about them in the book but doubling sales and profits is not uncommon. Oh, and without DISCOUNTS, ADVERTISING AND/OR REMODELS!!

I threw in a picture of Tadich’s Grill in San Francisco. Like my car wash it’s older but clean, un remodeled but charming, GREAT FOOD and long lines since 1849!

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ROCK – PAPER – SCISSORS

We all remember and many of us still play Rock – Paper – Scissors. I. There is a game in the restaurant world that involves scissors but I personally wouldn’t play.

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It is difficult for me to believe that scissors have, in many chain restaurant kitchens, replaced, the iconic badge of honor, Chef’s Knives. So for some the game now is: Frozen Bagged -Scissors. Everyone knows fresh beats frozen and reconstituted boil-n-a bag. A fresh burger is better than a frozen one, hand pattied is better than machine formed and fresh fries are much better than frozen. The food channel is very popular but I have yet to see a show on the use of scissors to open a boil-n-a-bag. I don’t think a show called “Reconstitution Kitchen – You freeze it and we thaw it!’ would make the cut.

So why do some chains spend their money on advertising trying to convince us their ‘reconstituted food is good. At least they discount and coupon trying to get closer to the real value of their product.. I would, however, rather stay home and thaw my own.

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AN INSTITUTION – NOT A CHAIN

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One of my favorite compliments was that, Friday’s was an institution not a chain. Cheesecake Factory is an institution – not a chain. When I left for my sailing adventure Friday’s had a 200+ item menu and we made everything from scratch, including the sauces and dressings. Through the insistence of the new owner we had over -expanded and were having trouble with the execution. The clear choice was to slow down and train but not compromise our fresh product. After my departure focus groups knew better and the menu was reduced by 100 items to reduce the degree of difficulty. This of course was the beginning of the end of Friday’s famous food culture.

In a few weeks, I will have the honor, to meet with David Overton, the founder of Cheesecake Factory. In preparation for our meeting I have been doing my homework. As a part of that homework I visited the Union Square CCF. I ordered a dish I knew would require a sauce with  complex seasoning. Wow! It was excellent! My wife and I ordered another dish simply because we have been addicted to it for years, Sweet Corn Tamale Cakes. Everything I believe and teach was being executed in the entire restaurant to a clear standard of excellence.

I introduced myself to the manager, Dave Schaefer, who was kind enough to give me a ‘tour’, which revealed David Overton has taken Cheesecake Factory to a level without peer. Everything is prepared fresh, including 136 sauces. With a menu in excess of 200 items and a back of the house compromised by building limitations, everything sang!  You could feel the energy and pride among the cooking staff online which carried into the small prep area. I mentioned Friday’s departure form the ‘culinary world’ because of the degree of difficulty. I was told that there had been a new VP that wanted to reduce the number of scratch sauces due to the degree of difficulty and ended his career, with that statement!

Friday’s achieved exceptional sales without advertising or discounting in any form.  David has taken this to a whole new level, as well. The store I just visited does $18 mililon in sales.  All of his stores set record volumes ever year without advertising. I will let you know how our beliefs and standards match up but I’ll bet they do.

Excellence comes with a degree of difficulty  but excellence = energy and pride of accomplishment and.. and…the list is endless.

 

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WHAT DO YOU DO WITH ADVERTISING?

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What do you do with advertising, you can’t eat it put in your tank or wear it. Regardless of what it claims, it dosen’t make products better but it tries to make us think so. It costs a TON of money. Occassionally it informs but most of the time it’s hype or an offer of a lower price for a product that isn’t even worth the discounted price.

I chose to invest 100% of the advertising budget in a better product and the people and systems it took to make it. WORD OF MOUTH took care of the rest. Have I mentioned we were the ‘HIGHEST VOLUME PER UNIT’ restaurant chain in the world. With zero advertising!

It is harder to run a business to a standard of excellence but it is worth it! Pride, morale and energy are manufactured by performing to such a standard. All the things management tries to artificially create are a natural by-products. The big deal is it’s more FUN! 

We talk about the ‘how’  in my book……coming soon!

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MEDIOCRITY CREATES OPPURTUNITY

imageimageimage imageimageI love food! I love really good food! I love innovative food.  Today’s chain restaurants are not much more than vending machines of pre-prepared and frozen food. Mediocrity in FOOD and excellence in advertising seems to be the forcus. In my upcoming book I talk about MEDIOCRITY CREATING OPPORTUNITY.  Innovation is confined to how to bundle various un-innovative food choices.

HERE COME THE INNOVATORS AND FRESH FOOD PURVEYORS…….FOOD TRUCKS! What an opportunity the malaise of mediocrity among the chain restaurants has created. If you haven’t caught the wave, I am sure it’s in your town, special off grid gatherings of these wizards, give it a try. We do every time we are in San Francisco. If you are in Philly be sure and catch up with ‘Joe Spud’!

 

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