A brand for a company is like a reputation for a person. You earn a reputation by trying to do hard things well.–Jeff Bezos, Founder, Amazon.com
What’s a tougher industry to successfully operate in, foodservice or retail? Which industry has better margins, foodservice or retail? And which industry faces less competition from Internet competitors, foodservice or retail?
As someone who speaks to, consults with and designs products for both industries, the answer to all three questions is Foodservice. The short list of reasons why the restaurant business is tougher than retail include:
1) the factory and the store are under the same roof,
2) the hours are long, the margins are thin and the competition is stiff,
3) you must both manage and serve a Freudian Smorgasbord of personalities, and
4) in the restaurant business, there are more ways to lose money than make money.
Due to increased quality, value, convenience and a time-starved consumer, the foodservice industry has grown steadily to become America’s Kitchen, despite the challenges we face daily. As traditional retail bricks-and-mortar crumble to the Internet’s click-and-order, the foodservice industry continues to grow brands, careers and opportunity. The US Bureau of Labor Statistics recently reported that foodservice created nearly 290,000 new jobs in the last year alone.
But if all we sold was food and beverage, we’d be called grocery stores, not restaurants. So what makes up a foodservice brand beyond its logo and menu? Service is the invisible product and people are the critical ingredient in delivering on our brand promise. Which begs the question: can service be branded along with your concept, design, and menu?
Where Brands Come From
Happy GuestBrands began in the 19th Century as a literal assurance that one rancher’s beef belonged to him. Later, as certain branded cattle came to represent better quality than others, that beef commanded higher auction prices and more demand. Retailers quickly borrowed the branding concept and evolved it into logos which they affixed to their merchandise to communicate standardized quality quickly. They began in the 1880s by offering their goods exclusively through mail-order catalogs supported by central warehouses, a concept Jeff Bezos digitally reinvented a century later with Amazon. Those original 19th Century “trade-marks” came to represent uniformity, quality, and most of all, trust. Spread across a vast heartland populated with skeptical immigrants in need of dependable goods, Americans eagerly took to the brand concept. The general store’s one-size-fits-all dungarees tended to bust at the britches too quickly for the local sodbuster, but a Sears & Roebuck custom waist-and-length brand jeans held their stitches. And if they didn’t, well, just send ‘em back and we’ll replace ‘em free. Freight’s on us. And so the Brand was born, built on the three-legged stool of Service, Trust, and Dependability.
Fast-forward to 2015. Nearly every imaginable cuisine in the world has now been branded in the foodservice industry. So it’s reasonable to predict that the most successful foodservice brands of 2020 will be characterized not only by what it sells, but also by how it serves.
The equity of a successful foodservice brand in the next five years and beyond will be as much about investing in the team members who literally embody the brand as its signage, logos, architecture, or menus. As author Patrick Lencioni says: “These are the people who either deliver on the brand or don’t, so customers judge the brand based on the experiences with those employees.” Given the perceived uniformity of foodservice chains today by the dining public, it’s the human face of your team members and how they treat your guests that matters most. Like a strong brand, hospitality and service is built on trust and it starts by extending it to your team. “If we want to exceed the trust of our customers, then we first have to build trust with our people,” said Starbucks CEO Howard Schultz in a recent Business Week interview. “Brand has to start with the culture and naturally extend to our customers.” Culture first, then trust. Trust second, then service, then brand.
Server 2Now back to the question: If service is our invisible product, can it be branded along with the products we sell? The short answer is no. Even though we use the word service to delineate specific segments of our industry, like QSR and FSR, the reality is that we associate foodservice brands more with the food they offer than by the service they give.
There are brands that have earned a reputation for service, like Disney, Chick-fil-A, and Ritz-Carlton, but you’d be hard-pressed to call what they do for their guests “branded service” because it cannot be uniformly applied and distributed. And while both Disney and the Ritz-Carlton stage mobile service institutes where you can send your teams to purportedly learn the “secret” for a fee, the truth is that service can’t be taught to the wrong people, nor can it be executed by companies who are hobbled by habitual inconsistency in operations.
The difference between Service and Hospitality
Service and hospitality are words that are commonly used interchangeably when in fact they mean two different things. Service fulfills a need, and hospitality fulfills people. You can get service from a vending machine or an ATM, but fulfilling people takes customer-facing team members hard-wired to satisfy others. That can’t be taught, but it can be sourced and sought in a thorough and regimented hiring and development process.
Everyone agrees that service is a critical component of the foodservice brand experience. And process streamlining over the last twenty years has given the operator better service but worse hospitality for the guest. That’s because foodservice brands invested more in system standards, throughput and configuration than they did in hiring standards and training. As a result, we have quicker, safer, better, and less labor-intensive food. But we also are saddled with increasingly disengaged servers and habitually absent remarkable service.
It’s been said that a restaurant brand is not about feeling full, it’s about feeling good. Since everything communicates, the human face we put forward to define and deliver on our brand promise may be the most overlooked part of your strategy. Foodservice brands used to be nouns, but they need to become verbs. That’s what consistently good service does for a quality menu. Create a standardized and vigorous process for hiring the right people and then religiously developing them daily. It’s complicated, but a worthy goal.
Service is simple. Simple is hard.
By Jim Sullivan, Copyright 2015