Management

A Tale of Four Failed Restaurants

A Tale of Four Failed Restaurants
What is the most compelling thing about your business from your customers' perspective? Is it remarkable?

I visited my home town recently and noticed that four, fairly-new restaurants were out of business. Restaurants going out of business is certainly not news--it happens all the time--but these four should have survived and thrived, but didn't.

Case #1: Joe's Crab Shack. Located at perhaps the busiest intersection in the area, Joe's opened just two or three years ago. Joe's is a chain of restaurants. As the name suggests, they serve crab and other seafood in a fish camp atmosphere.

Case #2: Lucky Buns. I believe this was a local entrepreneur's project. Built a beautiful building (see picture) on a nice busy street near a freeway off-ramp. The food was hamburgers and ice cream.

Case #3: Chevy's. Also seemed to have a great location and built a nice building. Chevy's is part of a chain and serves Mexican food.

Case #4: Juanita's. Another Mexican restaurant. Pretty good location in a busy commercial center. They built a very nice building to provide that "old Mexico" feel.

All four restaurants opened with great fanfare and significant crowds. Within a few years they were all closed. Why? I have no inside information. I haven't talked to the owners or any one else, but I have a hunch. In addition to remarkable facilities, good locations, and plenty of publicity they all had one significant thing in common: mediocre food.

I lived in the area when all four restaurants opened. I ate at three of the four exactly once. I never ate at the fourth because I had friends that did and told me it wasn't that great. In the restaurant business location and atmosphere may bring them in, but it is the food that brings them back.

How does it apply if you are not in the restaurant business? Make sure you know what will bring your customers back and then focus on making that aspect of your business remarkable, the rest will take care of itself.

The Happiest customers tell on average 8 other people. Who are your happiest customers? Promoterz knows. Learn more

Learning from the Best: George Washington

Learning from the Best: George Washington

I read a great article recently about George Washington. As I read about his amazing leadership characteristics it occurred to me that they are the same characteristics any entrepreneur or business leader needs to succeed. So, in honor of the celebration of Independence Day, here are a few leadership lessons from George Washington.

The article I read was based on a speech given by the author David McCullough at BYU. You can read the article here. here.

Age Though we have no control over our age, it is interesting to note that George Washington was 43 when he took command of the Continental Army. Because most pictures of him were done at an older age, we often think of him that way. He wasn't when he led the "rabble in arms" against the British.

Vision McCullough notes over and over that Washington was a man people wanted to follow--some of which I'm sure is due to the other characteristics noted here, but he also had a vision of "the glorious cause of America" was able to instill it in others.

On December 31, 1776 all the enlistments for the entire army were up. Every single soldier was free to go home on January 1, 1777. Most were planning to. Their families were suffering, they were suffering, they had done their part "for the cause" and were now planning to go take care of their own. Washington called the troops into formation and offered them all a $10 bonus (about a month's pay) if they would enlist for another six months. The drums rolled and Washington asked those willing to stay to take a step forward. Nobody did. He rode away and then turned and road back to them and said these words:

My brave fellows, you have done all I asked you to do, and more than could be reasonably expected, but your country is at stake, your wives, your houses, and all that you hold dear. You have worn yourselves out with fatigues and hardships, but we know not how to spare you. If you will consent to stay one month longer, you will render that service to the cause of liberty, and to your country, which you can probably never do under any other circumstance.

The drums started rolling again and the men began stepping forward. Washington raised their vision beyond the suffering, lack of pay, and uncertainty to the "glorious cause."

Courage The first year of the war was a disaster for the Continental Army. They were soundly defeated in Brooklyn, and only through miraculous events managed to get 19,000 men and their horses and equipment across the East River in the dead of night to escape capture and complete defeat. As the army retreated across New Jersey its numbers were depleted by disease, desertion and defection. By the time he reached the Delaware, Washington had 3,000 men and they were all in miserable condition. Charles Wilson Peale, the famous artist, said he had never seen such miserable human beings in all his life.

Washington must have been overwhelmed. Cornwallis and his troops were headed for Philadelphia and it seemed unlikely anything could stop them. McCullough puts it this way:

Most everybody concluded that the war was over and we had lost. It was the only rational conclusion one could come to. There wasn't a chance. So Washington did what you sometimes have to do when everything is lost and all hop is gone. He attacked.

The result was a victory at Trenton and then at Princeton. According to McCullough it was "one of the most important turning points , not just in the history of the war, but in the history of our country and consequently, of the world."

Integrity Above all else, George Washington had integrity. According to McCullough:

Washington wasn’t chosen by his fellow members of the Continental Congress because he was a great military leader. He was chosen because they knew him; they knew the kind of man he was; they knew his character, his integrity.

At the conclusion of the war, George Washington could literally have been king, but he didn't pursue his own glory. What did he do? He turned back his command to Congress. When George III heard he might do this he said, “if he does, he will be the greatest man in the world.”

Washington had a vision of what could be, the courage to pursue it boldly, and the integrity to be true to it no matter the cost or the temptation. As business owners our causes may not be as glorious or as history changing, but they never the less require the same characteristics to succeed.

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

The Power of Staying in Touch

The Power of Staying in Touch

In the cluttered marketplace we compete in, I don't think the power (and necessity) of staying in touch can be overemphasized. I learned the lesson again last week--thankfully in a good way. It had been a while since I had heard from one of our clients at PromoterZ and so I sent him an email and invited him to go to lunch. We had a nice chat, I asked for feedback on our service and he had a few suggestions (I'm happy to note that we followed through on them). I ran a new idea we're working on past him. He liked the idea and agreed to let us test it with his customers. Then he mentioned that their franchising operation is taking off (looking for a good franchise opportunity? Check out Entrees Made Easy) and there might be an opportunity for me to tell some of their new franchisees about PromoterZ. Turns out the timing was perfect, and I'm scheduled to present to some of their new franchisees next week on how to turn customers into promoters.

So what did I get for my $30? Our product, PromoterZ, is now better thanks to his feedback, we have a place to test our new concept (more on that in future posts), and I have the opportunity to tell new franchise owners how much PromoterZ has helped Entrees Made Easy. Where else could I have got that kind of return on my money? Thanks Brandon!

They say it costs 5 to 10 times more to sell to new customers than it does to sell more to current customers, and yet what percent of our effort is spent looking for new customers vs. pleasing and staying in touch with our current customers? I was able to take Brandon to lunch, but that is not always geographically possible. A phone call works great. It can be as simple as, "how are things going?" Use technology where you can. Without exception, each time we send out our newsletter we get one or two phone calls from customers--they had been meaning to call but never got around to it until the newsletter arrived in their inbox. Here are a few other ideas:

• Send 1st timer customers a special thank you
• Send birthday greetings
• Send a newsletter
• Send Holiday greetings (Did you know today is Chocolate Eclair Day?)
• Send thank you notes

Finding new customers is tough and expensive. Once you've got a customer, hold on to them by staying in touch. I can guarantee you if you don't, somebody else will.

Hey dude, buy a belt!

Hey dude, buy a belt!

Ok, with three teenage sons I couldn't pass this one up. Hysterical article today in the Wall Street Journal about baggy, low-slung pants tripping up would be thieves. Seems they perpetrate the crime and then as they try to run away holding on to their booty with one hand and their pants with the other things get all tangled up! Next thing they know both hands are in cuffs. One guy tried to jump a fence, most of his body made it over but his pants didn't. The cops found him dangling upside down with his pants around his ankles. Quote from the Police Chief: "He was wearing underwear, thank goodness."

So with the baggy-pants thieves as inspiration, here is the question of the day:

"What stupid things am I doing that keep my business from growing?"

Here are a few ideas to get you thinking. If you think of others, feel free to add to the list:

  1. When was the last time you asked your customers what they thought about your service?
  2. How often do you pro-actively communicate with your customers?
  3. What would compel your customers to tell their friends about your business?

If you can't come up with good answers, you may as well be dangling there on the fence next to Mr. Baggy-pants.

Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more

Real Small Business, Real Word-of-Mouth, Real Improvement.

Real Small Business, Real Word-of-Mouth, Real Improvement.

I don’t mean to bite the hand that feeds me, but I’ve noticed that we of the small business/entrepreneur blogging world talk a lot about word-of-mouth and other great business principles, but rarely do we write about actual experiences from small businesses applying the stuff. My goal is to change that with some real case studies of real businesses applying great business principles and enjoying the benefits. Here is my first attempt.

Chuck & Joan Matheny own two Sport Clips locations in greater Phoenix. Sport Clips is a hair cut place that caters to guys. Every stylist chair has a TV tuned to sports, all the décor is sports related, and they have an “MVP” service that includes a hot towel and a neck massage. Their motto is “Guys win.” If you’ve never been comfortable in the fru-fru world of hair salons, this is the place for you.

Anyway, last September Chuck was looking for a way to improve the performance of one of his locations. It had a great staff and a good location but wasn't performing like he hoped it would. Rather than pay for traditional advertising, Chuck decided to focus on encouraging his existing clients to spread the word. Four months later, without spending a dime on advertising, Chuck’s weekly sales were up well over 20% and have continued to grow.

From the client's perspective, Chuck's program starts with a simple invitation received at the conclusion of their service. The invitation is the size of a business card. It includes the stylist's name and offers a free service upgrade in return for visiting a web site to provide feedback. "Our feedback survey is extremely short," says Chuck. "It literally takes our clients less than sixty seconds to complete. Our goal is not to get feedback on every little thing, but to learn if the client is happy with the service and start an ongoing dialogue."

The ongoing dialogue is initiated with the last question of the survey that asks if the client would like to receive additional information and specials from Sport Clips. Nearly 90 percent of those that provide feedback choose to receive additional information. That’s a pretty good “opt-in” rate. Once customers opt-in, Chuck uses technology to stay in touch with them. First-time customers automatically receive reminders via email, including a discount coupon, every three weeks to encourage loyalty. Every customer that signs up receives a birthday greeting from Chuck including a discount on their next hair cut and Chuck regularly sends out email specials associated with holidays or other events.

The Sport Clips client experience is remarkable and worth talking about in and of itself, but Chuck also takes extra steps to encourage his clients to tell others about their experience. Each time a client completes a survey or receives an email from Chuck they are given the opportunity to forward online discount coupons to their friends along with a personal message. Thirty percent of the clients that join Chuck’s program take advantage of the opportunity and send an invitation to their friends.

Chuck's efforts have paid off in many ways. His stylists love the customer feedback and take greater pride in their work. He knows who his most loyal customers are and can contact them without paying for advertising. And, most importantly, his customers are actively telling their friends to try Sport Clips. All of which have lead to healthy growth.

Time, effort, and money required? The invitation cards that Chuck’s stylists hand out are business cards ordered from Vistaprint. They run about 4 cents a piece--four color both sides. Chuck uses PromoterZ for his online survey, opt-in list management, outgoing email and online referral generation needs. Cost: $50 a month. In terms of time required, Chuck spends a few minutes each day responding to customer feedback. Once a week he shares feedback with his managers as part of his manager meeting. He also spends some time each month deciding on a special offer to send out to his loyal customers. This month? Fathers and Sons that come in together get a Free MVP upgrade for Dad and a half price haircut for son.

The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more
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Seeds from the blogworld
We search the business blog world looking for posts that illustrate principles, or "Seeds", that if followed, or "planted", will help small businesses grow. We list them here for your convenience. Enjoy.

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