'Don't be cute, just execute:' How restaurants can grow same-store sales
The same-store sales performance across the industry can best be described as “choppy” of late, particularly amid a heavy value environment. The ability to achieve growth for this metric is both an art and a science, and it requires a sharpened focus on the fundamentals.
“You have to be careful with discounting because that’s not value. Value these days is portion size, quality, do I feel good about what I’m spending for what I’m getting? It’s not how cheap I can get it,”
It’s worthy advice given that Mo’Bettahs is riding 18 consecutive years of positive same-store sales. And it was one piece of many Ertmann shared during a panel at the recent Restaurantology event in Salt Lake City, hosted by Savory Fund, alongside Savory CEO Clay Dover, and ZenMango CEO Arjun Sen.
Sen and Ertmann shared their tactics on winning over consumers who have more dining-out choices than ever. For Sen, the lure is to make sure your concept is differentiated and “demonstrably better,” and that you’re communicating that to customers. For Ertmann, the secret to winning consumers is “consistency, value, and just an overall great experience.”
“How you win the next guest is to win over the last guest who was in your restaurant,” Ertmann said. “Word of mouth — having a brand that people are talking about, sharing to others — that’s how we win them over. There are all sorts of marketing tactics to perk people’s interest, but it starts with winning over the last guest walking into the restaurant.”
That said, you still have to get that last guest into your restaurant in the first place, and more concepts are relying on discounting to do so as consumer pressures continue to mount. Sen and Ertmann cautioned to avoid aggressive discounting for reasons other than driving trial.
“You have to be careful with discounting because that’s not value. Value these days is portion size, quality, do I feel good about what I’m spending for what I’m getting? It’s not how cheap I can get it,” Ertmann said.
Sen added that operators should consider “discounting up.” For example, if a customer spends $50, give them $5 off, so guests see the value at full price.
“FOMO (fear of missing out) is where you use discounting,” he said. “Otherwise, if you do it regularly, it becomes tough to get out of.”
And, once you “get out of it,” it can be tougher to drive repeat visits. Mo’Bettahs incentivizes return visits with its loyalty program, but that’s only part of the equation. The biggest piece is the customer experience.
“So often we get stuck in this pattern of thinking you’ve just got to have better food, and you just got to have better service. You've got to be clean, and you've got to do this. But I think breaking it down and starting with the people and how we help them provide that great experience — where they're not stressed out about how they're going to get through the shift and they can focus on the energy of the customer— that’s where the magic starts to happen, and that's where that repeat visit comes from — a consistent experience,” Ertmann said. “Inconsistency is what kills repeat traffic.”
Sen added that one of the best ways to connect and retain customers is to reiterate to employees that they’re in the “feeling business.”
“At the end of the day, we decide emotionally and justify rationally. You cannot fake it — start with humility, be the customer, think like the customer, feel like the customer, then act,” he said. “If I can build that emotional connection with a customer, they’re coming back tomorrow, because that’s what truly brings them back.”
Anyone can copy a menu, the panelists said, but true loyalty starts when the guest feels noticed.
“You can go to the local grocery store, get the ingredients, and make our food at your house. It's not that defensible. However, the passion and the energy and what you pour into it is what makes it different,” Ertmann said.
Maintaining this difference is critical while you scale, but that’s easier said than done. Ertmann and Dover both talked about their experience scaling brands and how they went from knowing every general manager and their families to “getting further and further away from that.”
“It’s not intentional, but we’ve got to get every single level of the team to be the ones carrying it down to the next group and the next group,” Ertmann said.
“You have to think about these (brands) like your own children. Once you start losing the people around you that care as much as you do, that’s where it becomes a challenge,” Dover added.
To avoid such challenges, get out of the office and into the restaurants.
“Everything gets solved in the restaurants. You’re not going to solve anything in the boardroom,” Sen said. “Get out into the field, connect with the team, understand what’s important to the guests. It all happens in the field, not by sitting and looking at the numbers. That’s not how you’re going to identify how to get the next guest.”
To end the discussion, Dover asked what one lever the panelists would pull to ensure comparable sales growth in the next quarter. Sen said he would look at what has worked well in the past and pick one thing to focus on. Ertmann cautioned about looking just one quarter ahead.
“I would think about the quarter after that because quick levers often involve discounting or gimmicks that aren’t going to get you (to growth) in the long term. Eventually you run out of trick shots,” he said. “Invest in the people to get them to provide that experience that will give you payoff in the long run.”
