Success Stories from Chain Leader LIVE
The 5th annual Chain Leader LIVE turned up good ideas for operating restaurants in a tough economy.
By David Farkas, Senior Editor -- Chain Leader, 11/19/2008 1:07:00 PM
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| Julia Stewart of DineEquity said a leader's top priority during stressful times is his or her employees' well-being. |
Some, in fact, were downright funny.
Take John Krings, chief operating officer for E&G Franchise Systems, the Eau Claire, Wis.-based franchisor of Erbert & Gerbert's Subs & Clubs, and Doug Thielan, manager of nontraditional marketing for Qdoba Mexican Grill. Both got laughs on the first day when they showed viral marketing efforts aimed at enhancing relationships with tech-savvy Millennials.
Key to Qdoba's humor involved bipartisan presidential politics. Thielan and a street crew interviewed people attending the Democratic and Republican national conventions, passed out T-shirts and asked them to explain why their favorite Qdoba product matched up to the presidential candidate they supported. The videos show some people proclaiming nachos for Barack Obama while others declaring burritos for John McCain. The videos became the basis for a Web site program called "Taste Bud Politics."
Silliness was also central to Erbert & Gerbert's marketing effort. Krings showed a video celebrating the chain's 20th anniversary with a wind cannon designed to blow out candles at far distances. Originally posted to YouTube, it received over 1.5 million hits, Krings claimed.
You Talkin' To Me?
Keynoter Dave Balter touted the effectiveness of an organized word-of-mouth campaign.
As important as the Web can be to marketing efforts, word-of-mouth is even more crucial-or so keynote speaker Dave Balter, CEO of BzzAgent, would have you believe.
Balter, whose company specializes in word-of-mouth marketing, describes the process as "the honest sharing of opinions between one or more consumers." That, he added, was in contrast to "shill marketing, the worst kind of marketing," because no one believes it. A person working for a business but pretending not to in order to seem reliable is deemed a shill.
An organized word-of-mouth campaign is the better alternative to online efforts, Balter added. Product testimonials from volunteers are credible because they do not get paid; multiple interactions among volunteers and consumers are the key to getting the word out about your restaurant; and about 80 percent of word-of-mouth communications occur off-line.
Business Abroad
International franchising has been a hot topic in 2008 given the downturn in the U.S. economy. Veteran Mike Shattuck, senior vice president of international operations for Atlanta-based Focus Brands, showed how communication lapses could capsize promising deals.
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Danny York of Santa Fe Cattle Co. shared his plans for expanding the concept in small towns throughout the South. |
Working the Margins
Speaking of ROI, businesses can't achieve them these days unless they pay close attention to margins.
During the Maintaining Margins general session, one audience member asked panelist John Scardapane, CEO of Conshohocken, Pa.-based Saladworks, whether operators should pay more attention to cost of goods sold instead of margins. "You have to look more closely at everything you do," Scardapane replied. "We are renegotiating contracts with our vendors, saying, 'Either you lower our prices or we find someone else.'"
Panelists Chris Tomasso, chief marketing officer for First Watch Restaurants, and John Metz Jr., chef-owner of Marlow's Tavern, discussed other margin-maintenance efforts such as dropping mystery-shopper programs, revising labor scheduling and reviewing cleaning contracts.
Creative Cooking
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| The Local Heroes reception featured Atlanta-based chains including Rising Roll Gourmet. |
Dismore collaborated with rock bands to create the new dishes Denny's rolled out in late summer under the Rock Star Menu. Dismore explained how Katy Perry drew inspiration from her song "Hot n' Cold" to create a multilayered concoction of cherries, vanilla ice cream, hot fudge, French vanilla cappuccino and whipped cream with a cherry on top, now called the The Hot N Cold Cherry Chocolate Cappuccino.
Innovation is a key to growth especially in difficult times like these, according to the panelists at the menu-development session. Vice President of Food and Beverage Chris Gatto of Uno Chicago Grill explained how the chain was "defending" its lunch business from quick-casual eateries by launching an all-you-can-eat, self-serve soup. "It's all about value and speed," he declared, adding sales rose about 6 percent.
People First
People Report's Teresa Siriani talked to HR executives Devona Haslam, Maggie DeCan and Kat Cole about how the tough economy is affecting how they recruit and retain employees.
It's arguably more important to retain productive employees than anything else. That case was forcefully made during the Focus on People panel. Moderator Teresa Siriani, president of Dallas-based human-resources benchmarking firm People Report, shared statistics that show stagnant job growth for restaurants.
Despite a soft labor market, she added, restaurants are having problems recruiting people because they are in competition with the health-care and education sectors. Panelists described ways their companies are addressing the issue. Kat Cole, vice president of training and development for Hooters of America, for example, told attendees how the chain "created more of an ownership culture" by assigning company GMs to task forces in which they had a role in decision-making. "We treated them more like franchisees," she said.
Julia Stewart, chairman and CEO of Los Angeles-based DineEquity, parent of IHOP and Applebee's, drilled home the message that employees' well-being takes top priority during stressful times. That's because they are likely to fret about their financial situation and become less productive. She suggested assuring workers that the economy and the company will improve eventually.
"[Employees] look for any crack that suggests all is not well," Stewart cautioned. "Demonstrate that you have not wavered one iota."
Restaurant operators are usually good at seeing opportunity, as members of the Leadership Panel showed. Coby Brooks, president and CEO of Hooters, described how his chain was menuing lower cost items to help maintain margins. Huddle House CEO Phil Greifeld mentioned the Atlanta-based chain was switching to a 7.5-ounce burger from an 8-ounce patty to trim costs.
Raving Brands President Daryl Dollinger noted that the Atlanta-based company, which franchises several fast-casual brands, was "always looking for a smaller box."
Expansion? Clay Dover, president and CMO of Baton Rouge, La.-based Raising Cane's, said his chain plans to expand its base by 20 percent.
MORE: For more information about this year's Chain Leader LIVE, check out our conference page.
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Attendees asked questions on topics ranging from marketing to menu development. |
Chris Tomasso of First Watch, John Metz Jr. of Marlow's Tavern and John Scardapane of Saladworks offered ways they are maintaining margins. |
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Old friends caught up at networking receptions. |
George McKerrow Jr. of Ted's Montana Grill made the business case for going green. |
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Operators got a chance to check out sponsors' products. |
Receptions provided attendees with ample networking opportunities. |
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Matthew Corrin of Freshii shared how he revamped the concept for expansion. |
Andrew Dismore dished on the rock bands he worked with to create Denny's Rock Star Menu. |
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John Krings of Erbert & Gerbert's and Doug Thielan of Qdoba talked about viral marketing efforts. |
Lunch featured dishes using sponsors' products. |
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Publisher Patricia Dailey urged attendees to use the best practices that came out of the conference. |
Operators talked shop and swapped ideas. |
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Industry executives at the Local Heroes reception. |
A panel of chain leaders talked about growth in an ailing economy. |
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