Once in a Lifetime Opportunity Nation's Restaurant News recently reported on a study done by Restaurant Marketing Group (a division of ZenMango). The study reveals three consumer trends that are coming out of the recent “down economy.” Can I get what I buy cheaper?I used to spend $8 for a sandwich at your restaurant, but now I realize that with the economy being down, I have the power. So can I get the same sandwich for $7?  How about $6.50? Can I get more for what I spend?Fine, you do not want to sell me the sandwich at a lower price. How about giving me something more?  Maybe a free drink and a cookie if I paid you $8? I think that is fair. Do I have a better option?Wait a minute. As I was negotiating to get a better deal from you, I realized I may not want a sandwich after all today.  Maybe I should call the pizza guy and see if he can offer something better. Why not call the burrito place and see. Or maybe I should call my husband and see if he can pick up a rotisserie chicken from the grocery store, then I’ll just fix up some vegetables.    This openness in the consumer’s mind has given all restaurants, big or small, the chance of a lifetime. Now your brand is being considered for occasions that were “closed” to you before.  The window of opportunity is open to your brand as the consumer is willing to give you a try. Now is your time to seize the opportunity and “wow” the consumer. Give the consumer a reason to come back over and over.  The opportunity to increase your transactions and increase your market share is right in front of you. Seize it with the mindset as described by Vivian (played by Julia Roberts in the movie Pretty Woman), “Baby, I am gonna treat you so nice, you're never gonna wanna let me go.”  For you it translates to, “Oh valuable guest, I am gonna treat you so nice, that at the end of this experience, you will never let me go.” Live the mantra and seize the opportunity of a lifetime. Now is the time for you to kick some competitive “butt” and steal some market share. Guest Experience Enhancement™Five Step Approach, the Restaurant Marketing Group Way Step 1: Define Your Guest Experience VisionRMG leads your leadership through a brain storming session in which your current guest experience vision is analyzed. The outcome of this step will be used as the benchmark for the steps that follow. Step 2: Observe Your GuestsRMG spends time in two to three store locations to observe the guest experience from a customer’s perspective. Your brand’s guest experience vision will be examined to see where the brand stands on each element. Step 3: Guest FeedbackRMG will interview customers just after they finish their meal for one-on-one interviews to understand the guest experience from the customer’s perspective. The interviews will go through the following discussion areas:What are the experience elementsWhat are the decision pointsRevisit decision (what were the main drivers of the revisit decision)What are the break points – where are they most vulnerable. The one-on-one interviews will identify whether your brand is below, above, or at-par with each element compared to guest expectations. Step 4: Competitive ObservationThree competitive brands (that consumers consider as sources of business for your brand) will go through the same observation as in step 2.  For each competitive brand, RMG will spend time in each store to understand the guest experience from a customer’s perspective. RMG will identify each guest experience element and see where the brand stands on each one. Step 5: Guest Experience EnhancementRMG will present the findings of the guest experience enhancement vision to your leadership team. This brain storming session will develop your brand’s strategy to measure and manage each of the guest experience elements. The guest experience enhancement will connect you with your customers and help you be the best-in class for guest experience in your category....

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Solving for Inefficiency First there was dine-in.  America left home for a destination meal. Then a smart operator thought of maximizing asset utilization. “We have an asset that isn’t currently being maximized. We can increase our output, without increasing the dining-room capacity, by allowing the kitchen’s capacity to drive productivity in my restaurant.” Take-out was born. This new distribution method allowed restaurants to become relevant for in-home and off-premise occasions, and thus increase sales. As a natural extension of take-out came the drive-thru; perfectly suited for a rushed occasion where the driver either did not have the time to come into the restaurant or wanted to pick and eat on the go. Delivery was next in the line of restaurant occasion evolution. Now driving was not even necessary to eat your favorite restaurant’s food. But with all this evolution into new occasions, something was lost. THE Problem: In 2000, during my days as the VP of Marketing and Operations at Papa John’s, my team realized that there was a major inefficiency in the restaurant system. We realized that the phone ordering process, the first step in any ordering for the brand, was completely broken.   I put myself in the position of a customer to understand the break-down in the guest’s experience. I started making numerous phone calls to various restaurants and placed orders for take-out and delivery food. I could very easily mistake any of the pizza delivery brands name to be “Pizza Hut Hold Please,”  “Domino’s Hold Please,” or “Papa John’s Hold Please”, as all pizza places greeted my phone call the same way: “Welcome to Pizza Hut, hold please.” After a basic analysis of the phone ordering system I concluded that for any phone order, the consumer felt a total lack of control stemming from the following three inefficiencies: The order takers could put the me on hold any time they want, with or without my consent. During the ordering process, I was always worried about getting dropped from the call in one of the “on-hold” moments. Getting dropped from the call meant I would have to call again and be put back at the end of the line. Finally, when the order-taker asked what I want to order, I did not have a menu in front of me. It is tough to order when you don’t know what the restaurant offers. This “observe and learn” process made me realize how tough it was to place a simple order for carryout or delivery. It was a major inefficiency experienced by customers like me in more than 50% of restaurant occasions. The solution: As the Papa John’s team tried to solve the inefficiency, I realized that the solution must result in giving the control back to the consumer. The solution for this inefficiency came in the form of online ordering. The consumer got the control back and was unrushed as they accessed the menu in a self-paced environment. Every step of the online ordering tool was developed with one vision in mind, “how can the consumer win using this process?” As we started to build the process, we realized that other brands were trying “pseudo-online ordering processes”.  I called it pseudo as these brands were replacing fax-ordering with online ordering, but the orders were not going directly in the point of sale system. Instead the orders had to be manually processed. This meant that even though the consumer got a better interface, there was a high rate of failure in the process.  THE IMPACT OF ONLINE ORDERING: All previous channels (dine-in, take-out, drive-thru, and delivery) were born as restaurants were trying to expand into newer occasions. This was the first time a new channel (online ordering) was born into the process for the purpose of solving for customer inefficiencies. Solving for the inefficiency got expanded to a bigger consumer benefit. As a consumer, I no longer needed to remember or look up the closest store’s phone number before placing an order. Now, wherever I was, I just had to go to the brand’s online ordering site. Like magic, the restaurant finds me and delivers food to me. Restaurants became more convenient to a customer. To me it felt like my personal store followed me as I traveled freely. Restaurants have been rewarded for solving the inefficiency. The big three in pizza have each raced to close a billion dollars in online business and most fast casual restaurants are introducing online-ordering. What started as a simple solution to a broken phone ordering process has resulted in one of the fastest growing, and most profitable, channels for the restaurant industry. THOUGHT STARTER FOR YOUR BRAND: When was the last time you observed and reviewed a guest’s experience with your brand? When was the last time you observed and reviewed a guest’s experience at your competition?  What is the big inefficiency your customers are facing day to day? How can you be the leader and solve for the inefficiency (and of course, in the process be rewarded handsomely)?...

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Restaurant Marketing Group, ZenMango's restaurant focused division, has completed their annual Leaky Bucket study for 2009. This year's study is the largest to date, and includes 160 national and regional restaurant brands for the most comprehensive competitive outlook in the industry.   The Leaky Bucket study is focused on customers who try a brand but state they are unlikely to return to the brand. The higher a brand's Leaky Bucket percentage, the more customers the brand is losing.    People are abandoning restaurants faster in 2009 than 2008. The restaurant industry is at a crossroads.  People are not returning to restaurants where they have eaten in 2009 the way they did in 2008.    The restaurant industry's 2009 Leaky Bucket average is up 7% from one year ago to 36%. This is the highest average percentage recorded in the history of Restaurant Marketing Group's Leaky Bucket annual evaluation. In addition, an average of 36% of those who fall into a brand's Leaky Bucket cite the price/value of the restaurant as a primary reason for not returning to the brand. Price/value as a reason for not returning is up 11% from 2008, the area with the largest increase in the study.   Arjun was quoted in a recent Nation's Restaurant News article to say:       Many casual brands also struggle with value perceptions, especially at lunch, accounting for a 39-percent price-value leak score, Sen said.   “They’re doing what’s ‘price-value-relevant’ for dinner,” he said. “If we want to use the best deal, Applebee’s ‘2 for $20’ deal, it’s still not relevant for lunch. It’s very tough for them to compete with fast food and fast casual, especially the sub sandwich [category]. In three to five years, Subway’s $5 footlong and Quiznos’ $4 Toasty Torpedo will be seen as a defining moment. [Those deals] move traffic away from both fast food and casual dining.” The takeaway for the restaurant industry is to understand that consumers are searching for something beyond "whatever is closest." The brand which demonstrates the best guest experience will dominate a consumer's choice set.   Check back for individual brand highlights from all categories included in the study. Below is a sneek peek at what the industry as a whole looks like in 2009 compared to 2008. Or, go to our website to download a free Leaky Bucket industry overview report. Industry Average: Changes vs. One Year Ago    Leak Size Food Menu Atmosphere Price/Value Location  Service Family Friendly   2009 Industry Average 36% 25% 17% 19% 36% 36% 23% 13%   2008 Industry Average 29% 25% 17% 15% 25% 43% 13% 10%                     Change vs. 2008 7% 0% 0% 4% 11% -7% 10% 3% ...

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Last week PepsiCo sued Coca-Cola for false claims that the new Powerade ion4 sports drink is more complete than Gatorade. BevNet recently posted this article following the suit. This high-profile case has highlighted the importance of ad claim substantiation in competative warfare marketing. A brand's marketing and legal teams must work seamlessly in the planning of such an attack to be able to withstand critical challenge. Once the research process is started, everything is discoverable. If challenged, all research and internal communication that supports the claim has to be shared in its entirety with the networks and competition. Between 1999 to 2001 I worked for Papa John's as the VP of Marketing and Operations on the marketing aspect of "The Pizza Wars: Papa John's takes on Pizza Hut." I learned very quickly that this can be a very effective tool for a brand to generate trial.  If you claim to be better than the best or the leader, of course you make a strong case for the consumer to try your brand. But here is the risk.  When the consumer tries you based on a competitive ad mentioning your key competition, the consumer has a high expectation of your brand.  Repeat business happens only when the consumer's expectations are fulfilled.  If a brand's experience falls below the expectation, the consumer feels that they were mis-guided and the brand falls in "been there, done that, and never falling for it again" category.  It is very tough for a brand to come out of this hole. Earlier, competitive advertising was restricted to within a category, where an aspiring  brand went after the category leader.  But with the economic pressures impacting the macro aspect of the industry, many a time a brand is going after anywhere and everywhere it can source business from.  Otherwise, how does one explain Dunkin' Donuts going after Starbucks or McDonalds going after Starbucks? ...

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ZenMango's restaurant focused arm, Restaurant Marketing Group, was featured in Nation's Restaurant News this week for their recently published 2009 Restaurant & Consumer Trends report. Click here to read the article and find out what Julia Roberts in Pretty Woman has to do with overcoming some of 2009's biggest obsticals, like keeping current customers active....

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