Editorial: The Test of Time

Are your short-term tactics supporting long-term goals?

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 10/1/2006

When I spoke to Panera Bread Co. Chairman and CEO Ron Shaich for the Cover Society interview currently running on www.chainleader.com, he told me a story about customer service. A co-worker of his was traveling and found the air conditioning in his rental car was broken. He asked the rental company to bring a new car to the hotel. The rental agent refused, saying the Panera executive would have to return the car; the company would only bring a replacement if the car wasn’t running. When asked why, the agent told him that too many people would take advantage and the rental company would lose money.

Shaich used the story to illustrate the difference between short-term and long-term goals. Sure, the rental company saved the time and labor costs involved in bringing the replacement car to the hotel, but it has lost a customer—a frequent one at that—plus the business or at least its reputation for service among that customer’s circle of friends.

Goal Setting

The Driving Traffic survey Chain Leader conducted in August asked operators what their goals are in increasing customer counts, such as increasing visits by frequent diners or growing a particular daypart. We also asked if the objective was to achieve a short-term traffic increase or a long-term one. While 85 percent said long term, 38 percent noted they were hoping for a short-term bump in traffic. (Those numbers equal more than 100 because the respondents might have been aiming for both.)

Does this mean there are a bunch of m yopic operators out there making decisions without thinking ahead? Some of them, yes, are like that rental-car place. Many companies prioritize quick gains over consistent growth, fast expansion over well-fortified infrastructure, or the hot, new trend rather than ideas that stand the test of time. Sometimes they are even rewarded for their innovation, fast decisions and income spikes.

But I think most of the restaurant companies who responded to our survey are using short-term tactics that are in line with long-term goals.

The Short and Long of It

Our parent company, Reed Business Information, recently held a one-day nationwide sell-a-thon. There were balloons and megaphones and some pretty serious prizes for sales representatives who met certain goals by the end of the day. This is certainly a short-term method of increasing sales. Did it come at the cost of long-term objectives? No. In fact, it energized our sales staff and they shared ideas. It introduced new customers to our products. And it highlighted electronic products within the company and in the marketplace. All of which fit nicely into our company’s long-term objectives.

In the restaurant industry, operators use many methods of driving traffic that would be considered short-term. Promotions, coupons, even a lot of television commercials are meant to entice people into the store who might not have come otherwise. Perhaps customers come for the free entree with the purchase of one or the new sandwich with spicier sauce. But the successful operators know that once you get that consumer in, you have any number of ways to make them a frequent customer.