The Service Opportunity

Recently, I came across interesting information about how restaurant chains are performing in tough times. According to Ron Paul, whose company Technomic measures the financial performance of the restaurant industry, visitors of chain restaurants have noticed declining service quality.

As the recession drags on, consumers are visiting restaurants less often, spending less, and expecting more. Diners crave fresh, interesting, full flavored food, but they also expect convenience, efficiency, prompt service, order accuracy, cleanliness, friendliness, and a relaxing ambiance. Service is a larger part of the customer’s value equation than ever before.

Yet service levels (among chains) have worsened in the past year or so. Recent surveys indicate that diners across the country have sensed a deterioration of service standards. Why? For one thing, restaurant companies are not taking service seriously enough to invest in adequate staff training. Most have reduced their training investment in the past 18 months.

I think that Ron Paul’s observations are good news for Independents for three reasons:

1) Consumers have raised their expectations. Tough times are making quality oriented patrons even more quality oriented. That is, if they cannot afford to eat out as often, they expect the food to taste really good and the service to be very attentive. Otherwise, they will not risk their hard earned money by returning to restaurants which disappoint them.

2) Cost oriented chains are trying to do the same with less. Just when consumers expect greater value for their dining out dollar, cost oriented chains are going in the exact opposite direction. The reason is that big chains are typically hard wired from top to bottom to maximize short term earnings (e.g., by reducing staffing but expecting the same output). And if service standards are sliding, food quality cannot be far behind.

3) Independents are best positioned to benefit. Whether Independents recognize it or not, many quality oriented pizzerias and Italian restaurants have done relatively well, despite tough times, by attracting new customers from lesser quality competitors … including chains with declining food quality and/or service quality.

What does this mean for your restaurant?

Most Independent restaurateurs I know take great pride in both serving superior food and treating guests like family. However, most are also open to discovering new ways to better satisfy customers!

That can be a good thing if many chains continue to disappoint additional customers, causing them to seek better dining value elsewhere. Therefore, the operators best positioned to attract these quality seeking patrons are those whose food quality and service quality are “best of the best” relative to other area competitors.

In other words, even if your existing food and service are consistently head and shoulders above every competitor in your area, further improvement can help strengthen your existing competitive advantage.

On the other hand, if other area competitors are pretty good too, improvement on your part can increase your “drawing power” and help you get a bigger slice of that “pie” over time.

As for how to further improve your current service efforts, you might start by asking your team to “put themselves in the customer’s shoes.”

The fact is, unlike ingredient consistency and flavor, good “service” is not always easy to measure or describe. But each of your team members knows exactly what kind of service they like to receive when they are the customer.

Asking your employees to help improve your service is smart for several reasons. First, just having the conversation reminds them that service is a top priority. (Excellent service is usually “second nature” to the owner, but its importance is rarely discussed.) Second, they work “where the tire hits the pavement” so they know better than anyone how service can be improved. And third, your asking for (and visibly acting on) their thoughtful advice helps them to “own” the solution, because they will give their maximum effort to making their ideas work. Trust me, when that happens, great things become possible.