I know, I know – SORRY for the horrific photos of my body and condition.  I am only trying to be authentic (despite the embarrassment) of what it was like to experience Hong Kong head-first.

Hong Kong is not China.  As an American I thought they were the same.  It’s like saying New York City is America or Dubai is the Middle East.  The are quite different in culture, cuisine and currency.

As an international restaurant consultant I can say with confidence that Hong Kong is one of those places anyone in the trade should see first hand.  I feel it is just scratching the surface though.  Perhaps one day Mandarin will be as common place as English.  We should all start warming up to the cuisine not just because it’s likely to be a global cuisine in 20 years but because it’s a wonderful cuisine and culture steeped in history, tradition and delightful culinary sensation.

Restaurant Consultant Aaron Allen

November 2009 Cairo Egypt

Cairo is such a unique place in all the world and it was a thrill to at long-last check it off my list of travel goals.  A city with more than 25,000,000 people, Cairo is burstling with energy.  The ancient is juxtaposed against the modern.  The old world pyramids of Giza transport us back to a different time (and then the lazer shows that happen nightly in front of the pyramids bring us crashing back to the modern day).

One rumor I can confirm with certanty is the use of car horns.  As one cabbie put it “Here we can drive a car that has no lights, no radio, no seats, but we would never drive a car without a horn”.  There are few street lights, cars not pedisterians have the right of way, and as a result the honking of a horn is the most dominent and frequent sound throughout the expanses of the city.  You hear honks of anger, honks of hello, honks of “watch out or I’ll run you over”, and honks that seem to be made just as a matter of muscle memory habit like blinking an eye.  The pyramids seem to stand in patient persistance in the noise and commotion all around them.

The food in Egypt is a melting pot of Middle Eastern flavors.  There are approximately 23 dialects of Arabic spoken in the Middle East.  It is hard for an Egyptian to understand the Arabic of a Saudi national.  This creates an interesting dimension for the traveler seeking to go deep into the culture and understanding of the region.  Sadly, many Americans see an Asian and think they are Japanese or Chinese and don’t think much further.  The cultures of Asia are as rich and dierse as can be found anywhere in the world and they can’t be lumped together in such a way.  Similarly, the Middle Eastern Arab nations and cultures have their own uniquenesses of culture, tradition, heritage and beliefs.

While Egypt is on the continent of Africa, it is an important part of the Middle East.  Egypt is not representatie of the entire Middle Eastern experience.  Countries such as the United Arab Emirates, Bahrain, the Kingdom of Saudi Arabia, Jordan, Lebanon, Kuwait and Qatar are all starkly different in many important ways.  A similarity they share is the unique Arab Hospitality that has been passed down for thousands of years by the Bedouin tribes that roamed the Middle East.  Arab Hospitality is about lavish generosity.  There are many stories of families selling their most important and prized possessions to pay the costs of hosting a guest.  In Bedouin tradition, even enemies were given refuge and were hosted graciously.

There are many misconceptions of the Middle East.  There are also many story-lines that are currently going unnoticed.  For instance, while China is leading the world in growth in manufacturing and India is leading in outsourcing, few know that the Middle East is the fastest growing hospitality market in the world.  More posts on that coming soon.

Hope you enjoy the slideshow!

Aaron Allen

Middle East Restaurant Consultant Aaron Allen

 A recent study found that 63% of American households have a pet.  There are 74.8m dogs in the USA and their collective spending on pets tops $40b per year.  By comparison, estimates are that only between 10% – 25% of Americans smoke.  The number of dog lovers in the country is going up and the number of smokers is going down.  Surprisingly though, it’s often still tougher to find a place to dine with your pooch than for a smoker to find a place to light-up.

We Americans love to pamper our pets.  As I write this I am in a 1,100 square foot four-star suite that is so pet friendly they allow both of my dogs (a Great Dane and Dachshund) and even bring up pillows and food bowls.  Some new doggie day care services charge as much as $120 per night for a luxury kennel (only my dogs get to stay at that rate, not me too).  Collectively, Americans spend $16.1 billion on pet food.  To help put that number in perspective, consider – all of the restaurants in Florida combined will post just $24 billion this year in revenue.  These numbers paint a picture of the buying power of pets.

There are more than 40,000 “doggie diaries” on Dogster.com and the percentage of dog owners who share their bed is 42%.  Americans love to talk about their pets, spend time with them, and increasingly they are looking for hotels and restaurants that are getting with the pet-friendly movement.  Not a bad community to tap into if you’re looking for solid word-of-mouth promotion.

Given how loyal people are to their pets, wouldn’t it make sense to tap into that strong emotional bond and create not just pet-friendly patio dining but to go further and develop marketing campaigns around this untapped market?

Pet Friendly Ideas for Restaurateurs to Consider:

• Water & Treats – You can tell how dog friendly a restaurant is these days by whether or not they bring a water bowl and treats over with the drink order for the table.  People (and their dogs) love it!  Be sure though to let the owner give the treat to their own dog (it is part of training and bonding as well as correct etiquette on behalf of the restaurant).
• Dog Days – A day guests are invited to bring their dogs for social hour.
• Free name tags – Consider offering to imprint a dog tag with the pets name and owner details on one side and your restaurants logo and phone number on the other.
• Dog Photo Walls – Consider taking pictures of guests who bring their pets and post on a bulletin board or on your Facebook or Twitter accounts.  They love it (plus it helps communicate the message of how your establishment is pet friendly).
• Sanitation – Pets are forbidden inside the restaurant because of strict health codes.  They have even started to crackdown on giving treats.  Starbucks used to offer a doggie treat to drive through customers who had a dog in the car but stopped doing it because of the grouchy heath department.  That said, they are still – at least for the time being – allowed outside on the patio.  Encourage your staff to help the pet and owner feel welcome.  Also remind them though to wash their hands and maintain the same standards of sanitation you encourage in other aspects of food and hygiene.

There are a ton of other ideas on ways to communicate a pet-friendly policy and attract a profitable and untapped market.  Please open up the discussion – looking forward to your comments using the form below!

Restaurant Consultant Aaron Allen

The National Restaurant Association (USA) has reported the average restaurant marketing budget is three percent (3%) of total revenues. Critics argue this point and we’ve seen budgets ranging from zero to six percent (6%).  We believe this depends on the brand, operations performance, market conditions and a host of other variables. Yet, while many can generally agree on a reasonable allocation of overall sales, they pay surprisingly little attention to how the money is allocated beyond just falling into the “marketing budget”. Once you have the allocation, where does it go?

The Digital Marketing Toolkit

We recommend that of the three percent (3%) allocated to the marketing/advertising line-item, forty-percent (40%) of that be dedicated to digital marketing and publicity efforts. Going further still though, the budget, the strategy, timelines, the tactics, the messages, must now all be succinctly distilled and then divided among a number of cutting-edge new digital media categories. This list of vehicles is mind-boggling and it only continues to grow and fragment. You’ve got the Internet and Intranet, search engine optimization and Pay Per Click advertising, digital signage, narrowing-casting and Podcasting, RSS feeds, social media and social networks, Wiki’s, Widgets, Mash-ups, Analytics – the list grows and grows. These are sustainable emerging technologies too – not just fly by night digital jargon.

It’s Natural for it to all Seem Overwhelming

The marketing rules have changed in the digital era and the train is moving like a bullet. Yes, the principles of marketing – the four P’s, brand strategy, etc. – these remain as true today as ever.  They are bedrock and all too often marketers chase the latest fad while forgetting proven principles to restaurant branding.  While maintaining a close connection to the fundamentals of restaurant marketing we should also be reaching out to discover the innovative new approaches that will prove to be game-changers.  It all sounding complicated and overwhelming isn’t a good excuse for ignoring the seismic shift that’s afoot.

The Trend Will Pickup Velocity

Digital marketing is has only started to become recognized as a powerful tool in the restaurant marketers toolkit.  Today it represents a tiny fraction of the overall restaurant marketing budget for chains and independents alike.  Given that more than 30% of restaurant customers will visit the restaurants website before visiting the restaurant itself, getting a solid web presence and supporting it with a strong digital marketing and publicity campaign is more important than ever. 

Restaurant Consultant Aaron Allen

The new iPad is all the rage these days.  In just its first two months over 2,000,000 units were sold.  Does the iPad have a future in the restaurant business?

Microsoft made a bet on tablet technology and saw great commercial application potential.  The fragility of the hardware/system and lack of software kept the early tablets from reaching their full potential.  Apple has effectively fixed the software issue by partnering with industry and developers to create “apps”.  There are more than 200,000 apps in the iTunes store and more are added daily.  The apps developer conference mints more new millionaires than any other conference (according to news reports).  It is widely agreed that now the tablet technology will lead the future of computer industry growth.  Consider – there are 1.5b Internet users on the planet yet there are 3.5b cell phone users.  Smart phones are the new handheld computer.  The limitations of size are part of what has lead to this new computer category which is essentially a hybrid of the power and functionality of a personal computer with the ease of use and portability of a smart phone.  The iPad is selling currently at a rate of 1m per month.  It took two years for the iPhone to reach the sales volumes the iPad posted in just two months. Impressive. The surface has only been scratched.

1. Microsoft Surface – We waited in anticipation for years for the launch of Microsoft Surface. The video/microsite launched prior to the first 3G iPhone. It looked like Microsoft would take the touch-screen technology adapted by Apple (first introduced at the T.E.D. conference in 2006 – amazing how far we have come in so little time) 

Apple has advanced the technology so fast that it has seemingly gained credit as having invented it (that credit belongs to Jeff Han).  The uses of Microsoft Surface technology had amazing potential in the restaurant industry.  So much so, in fact, that the pre-launch promotional videos seemed focused on restaurant use.  My firm was put on a waiting list to help bring the product to market in trials and pilots for the restaurant industry.  The call from Microsoft never came.  The technology raced past Microsoft.  Just this May (2010) I saw the first Microsoft Surface in use.  It was in The Sheraton lobby in Chicago and got barely any attention.  There were no noteworthy applications and the functionality included just a basic game of checkers, chess and kid-like drawing pad.  It was perfect illustration of how Microsoft has fallen behind and that if we are to see application of touch-screen technology in the restaurant industry anywhere similar to the fairytale portrayed in the Surface video, it will come from Apple and its legions of app developers.  It’s not the hardware that makes iPad successful, it’s the hundreds of thousands of applications.

2. Inventory – To think through the potential future uses of an iPad in the restaurant industry, we just have to envision the things we do on the go.  Inventory is certainly one of the potential range of restaurant industry uses.  Inventory in the old days was done with a clip board and then manually input in a central computer system.  In recent years we have seen bar code scanning tools and other hand-held devices created by industry or Point of Sale  (POS) companies, but these cannot compete with the iPad once inventory applications are developed for it.  An iPad can be purchased for just a few hundred dollars and custom app developers can create tailored software for as little as $2,000.  I believe we will certainly see the iPad put to work with restaurant inventory jobs using both subscription-based applications created by developers and also proprietary software developed by restaurant companies specific to their own needs.  Primarily the larger restaurant systems will be the ones to develop their own software but the development costs are actually within the range of small regional chains, not just the national restaurant systems.

3. Surveys – Gaining customer feedback in the field is another activity that is mostly mobile in nature.  Going to shopping malls, running exit interviews with customers leaving the restaurant, going table to table, and showing new creative/brand materials to solicit feedback are well-suited for the iPad.  It can be difficult these days to get customers to agree to written survey forms or lengthy in-person interviews.  The novelty of an iPad – at least for a window of time – will spur interest and curiosity which should result in higher yields of survey participation.

4. Training – Training in the restaurant industry has long been an issue in need of new approaches and more technology.  There was a movement with the iPhone and iPods to usher in a new generation of training deployment in the restaurant industry.  It didn’t really catch on.  Part of the reason was screen size and the associated restrictions.  With the iPad Area Developers can take their training on the road; meeting one-on-one with restaurant general managers to demonstrate a new approach, policy or quick instructional tutorial. GMs can be issued an iPad which automatically synchronizes with the corporate communication system; automatically downloading rich content such as performance dashboards, videos, slideshows and other company data.  Using the iPad as a distribution tool for such content can make the content easier to access and protect over the traditional out-dated restaurant P.C. in the back-office.  In fact, for a period of time before the novelty wears off, issuing GM’s an iPad also sends a brand message of the company commitment to technology, investment in its people and boosted sense of morale among their management ranks.

5. Kiosks – While the iPad is the latest rage and has a multitude of potential uses in the restaurant industry, it shouldn’t be the only techno-tool restaurant chains consider – particularly in the QSR segment of the industry.  The touch-screen technology and improved applications available in mobile form are also being adapted to kiosks.  In certain circumstances, a kiosk may be a better tool than an iPad, and so both should be considered.  For instance, it is unlikely the iPad will gain traction as a menu ordering system in QSR’s.  A kiosk would be better in ordering than a portable iPad.  Additionally, kiosks are great tools for providing menu information such as nutrition, serving as a portal for submitting applications electronically at the unit level, and also a wide range of other creative in-store marketing uses.

The iPad will very likely be the first generation of a new form of personal computer which will grow from novelty to category giant.  Many predict the iPad is the future of personal computing.  Whether they are entirely right or just partially right, what the iPad offers can be put to work in the restaurant industry immediately and its usefulness is only likely to grow.

Restaurant Consultant Aaron Allen

Panera Bread Opens Donation Model Restaurant

During the peak of the recession we all read of many restaurants around the world attempting donation only promotions to draw in customers. This tactic was largely used as a publicity stunt which worked very well. The first reports of this I heard were from Europe and then a spattering of U.S.-based restaurants jumped on the free media bandwagon. When the media interest died down, so too did the notion of customers paying what they want.

Panera has reinvented this publicity tool in a smart way. By going 100% donations as a concept for the pilot – which they hope to expand – they have essentially created an ongoing tax shelter, publicity machine and powerful method of building their catering business.

Far too many restaurants are non-profit not by choice, but by circumstance. The average restaurant in the United States pulls down just 5% profit; which is not a large sum when you consider how capital and labor intensive the business can be. Leave it to a billion-dollar chain to figure out how to euthanize poor performing stores while simultaneously gaining free press and investor confidence.

Many will remember the punishment Starbucks took when they shuttered 600 under-performing units. Wall Street walloped the stock and a bruised Starbucks has yet to regain the former glory and favoritism among investment media. Imagine if instead of closing units though, they had converted select units to a pilot similar to Panera where units are community fund-raisers.

Panera can effectively convert low-performing stores into this new donation concept and instead of units looking like failures, they can look like corporate philanthropy attempts. The units are put in a non-profit classification, the losses are 100% tax deductable, the press flows in graciously (within a week of this story, I counted more than 300 national media press mentions for Panera on this story alone), and to top it all off, the new approach creates an angle to build relationships with powerful community organizations and allies (who later become some of the better catering accounts for the donation-model units).

I actually think this concept is brilliant. Congratulations, Panera. You were the first to figure it out. I am certain other billion-dollar-plus chains will watch closely and a few of them may actually see the greater long term potential of this concept. The off-shoots of this pilot can grow in many favorable and profitable directions. My head is spinning in contemplation of how much further this concept could be taken – both from the standpoint of actually helping communities as well as the standpoint of restaurant marketing strategies for large restaurant chains.

Aaron Allen
Restaurant Consultant