Part Nine of the Boosting Restaurant Revenue series is dedicated to trends. What do trends have to do with boosting restaurant revenue, you ask? Well, a lot more than it might appear on the surface.
A trends list may not seem as tangible and actionable as a list of promotional tactics. The reality though is that the biggest wins for restaurant chains looking to leapfrog over their competitors isn’t going to be found in a tactic; it will be found by correctly predicting where the market is going and getting there before the consumer or your competitor even knew it was where they wanted to be.
We all know the pace of change is accelerating. And never before has it been more evident that success today favors those companies who innovate. As you scan the restaurant industry for recent success stories you see that the most profitable and fastest growing concepts are those who are innovating in fast growing categories and are perceived to be originals. That means not only knowing the restaurant trends, but also creating them.
Ideally, the best positioning you can have is to be the “original.” The second best positioning you can have is to be the “alternative.” In many instances, you can add the market share of #1 and #2 in any category and you’ll find their share is greater than that of #3 through #10 combined. An often-used example to look at is Coke versus Pepsi. Coke is “The Real Thing” (the original) and Pepsi is “The Choice of a New Generation” (the alternative). Any idea who’s #3 in cola? Few do. To be the original, you have to be first (or really early to the party and boldly claim leadership). You can’t be first following the trends. As Henry Ford famously said, “If we’d given people what they wanted it would have been faster horses.” Don’t aim for where the target is at; shoot for where the target will be.
There are numerous benefits to being ahead of the trends. Some of them include:
Consumers reward companies that innovate by happily agreeing to pay premium prices. This means higher margins. Innovative companies are more profitable than those who ignorantly try to build their business on the quicksand of discounting.
Journalists seek early-adopters to interview and cite in stories about new technologies, trends and innovations. Just look at Kogi Korean BBQ. When Twitter was just starting to catch on in 2009, journalists were looking for small business success stories of using Twitter for marketing. Naturally, reporters look to the restaurant industry for small business examples. Few mega chain restaurants were early adopters of Twitter and so Kogi started fielding the calls. The story caught on and snowballed (once one news organization covers a story others follow suit and this can create a positive media feeding frenzy). The coverage got so hot that it actually helped spawn a whole new trend and industry category – Food Trucks. What started out as a story about an early adopter of a new trend helped actually create a billion dollar category. By 2011, Food Trucks were listed by the National Restaurant Association as one of the top 10 industry trends for the year. In short, when you are on top of the trends, you get noticed not just by customers and talented professionals who want to join your team, you also get noticed by journalists, investors, partners and more. And, you may springboard even further and create a whole new category that you own and are forever credited with fathering.
Every one wants to be associated with success. By innovating, you build not only on the results of success but also the perception of success. The success pheromones will attract the brightest people who want to work with you, reporters who want to write about your company, investors and franchisees who want to join with you, and other partners who seem to come out of the woodwork. For instance, we had a client who had tried unsuccessfully for a decade to get an A location in Las Vegas, but after we helped secure a feature story about the client in Forbes, the A locations started courting our client.
Just look at Apple. RIM’s Blackberry has been decimated by Apple’s iPhone. Blackberry – once referred to as the “Crackberry” because it was checked so much in boardroom meetings – is so crippled that it may actually go under, and meanwhile Apple owns nearly 50% of the smartphone market. My, what an astonishing turn of events in just a few short years. It all boils down to this: one company was slow to innovate and sat confidently on its laurels while another company was aiming not just to catch up, but put together the clues found in the trends and build its entire corporate strategy on a vision of the future. The moral of the story is that even if you are on top of the trends today and gleefully enjoying that success, you have to continuously look and plan ahead to keep that position. I know you know this already. It’s how you got to where you are today. I’m simply offering a humble reminder – innovation is as important as ever before, change is accelerating faster than ever before, and your commitment to knowing and applying the trends has to be commensurately prioritized.