Compete on Quality - Not on Price
Updated: Nov 21, 2020
If you have been following my Restaurant Reboot posts, you will know by now that I am a strong proponent of running your business simply, effectively, and just plain smart. It’s easy to waste time, money, and effort chasing fringe opportunities and responding to all comments and so losing focus on the critically important items staring you in the face. We are all complicit in this!
As this transition into a new age continues, restauranteurs are being presented with a once in a lifetime opportunity to shed old habits and reshape market expectations. A true value perception, whether undertaken consciously or not, is based on the relation of three components: quality, quantity/portion, and price. There will always be segments of the market looking for big portions + low price, with quality falling second. Hey, it’s okay if these market segments are not your customers!
Playing to this crowd will ultimately damage your reputation and narrow your potential customer base. No matter what customers try to tell you, they really don’t care if your salmon main course costs $19, $24, or $28. If the salmon is amazing, you win; if it is not, you lose at all price levels. The total on the bill will soon be forgotten, but the poor-quality food and/or service is lasting, and the barbed wire ball of negativity will be shared with as many people as possible!
The demographic of the overall market is shifting toward customers who want quality, uniqueness, and a brand with which they can align emotionally. The focus on competing on price is a lose-lose scenario. Something has to give and usually does. That something is usually product quality and guest experience.
Are we as an industry able to put this behind us and focus on taking what we do to the highest possible level? This should be the passion and focus that drives our efforts each and every day! In the spirit of the Japanese manufacturing concept kaizen, our company cultures must become all about continual steady improvement – each and every day in all areas of the business. In his book "Trust the Process-An Artist's Guide to Letting Go" very succinctly captures this ethos when he says "Sit with what you already have and dream with it in a new way". I would add better to that new way to ensure that our creativity and innovation are not only focused on what is new but forces us first to re-imagine what we already do.
“What can we do better?” is the calling card of a business that will weather the current storm and emerge stronger. Your customers will notice, pride in the workplace will increase with employees, both top line and bottom line will grow, and the long-term viability of the business will increase.
The entrepreneurial spirit, especially when combined with the creative culinary mind, is always looking to create something new and different. This is much needed, of course, but what would happen if we turned our focus toward mastery of our craft, our products, and the running of our business?
So, what can we commit to in order to build customer loyalty and a sustainable future?
· Do less… and commit to doing whatever you do at the highest level of quality.
· Commit to long-term thinking, not short-term cost savings, and corner-cutting.
· Invest in the quality of your ingredients. Challenge yourself to break the mental barrier of just buying the lowest-priced items. Push your suppliers on both quality and pricing.
· Invest in your team and expect a high level of execution – you get what you pay for with both raw materials and people.
· Build and reinforce a culture of “Quality First”: no shortcuts, no cutting corners, no compromise.
· Once your Quality First culture is in place, charge what you must to earn the needed level of gross profit.
· Execute, execute, execute, and execute better each and every day. Commit to improving one important thing before leaving the building.
· Sell your quality difference to your team and to your guests.
· Cooperate with your competitors; don’t chase one other down the rabbit hole to failure.
· Review any and all discounting that you do. Are you a quality house or a discount house?
This is in no way about gouging customers. That, too, is fruitless. This is about investing in quality and charging a fair price – fair to customers and fair to the business. Analyze every aspect of your business; trim the fat; stop extraneous activities that provide no benefit; tighten up your menu; execute better; commit to not leaving money on the table unnecessarily.
I understand this is a scary place for many operators but what is there to lose in this climate? Is fear your motivator? Or is pride of ownership, long-term viability, and improved profit where you want to be?
Until next time!