that Pay Off - Tavistock Restaurants

maximizing profits |
By Chris Thomas
Promotions
Pay Off
that
His restaurant managers had to be convinced
when
Michael Dellar first proposed
the idea four years ago:
how about a promotion that would
prompt guests to order wines they
really wanted to try, rather than
what they felt they could afford?
Simplicity is critical to a successful promotion, says Michael
Dellar, co founder of the Lark Creek Restaurant Group.
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MAY 2007 | santÉ
“The managers thought their margins would really get beat up,
because they’re compensated on their profitability in the restaurant,”
recalls Dellar, cofounder of San Francisco’s Lark Creek Restaurant
Group. “But bottom-line profit as a percentage of sales has actually
risen because we do so much more business. The managers love it
now, because the customer traffic during that period is exceptional.
It’s become an event that people really wait for.”
Now, July is “Half-Price Wine Month,” when corks pop in record
numbers as the Lark Creek Inn, One Market Restaurant, and others in the Lark Creek Restaurant Group double their normal wine
sales volume.
“We don’t hold back on anything,” says Dellar. “The Bryant
Family Cabernet that’s normally $600 is $300; the $180 Silver Oak is
$90. You’re getting a bottle of wine for the price of two glasses.”
The accounting, he adds, is as basic as the promotion itself:
“We take the cost of this event, back it out of our wine costs, and
put it into our marketing costs. We still account for all the costs,
but they fall into different categories.”
To Dellar, simplicity is critical to a good promotion. “We’ve
run some that have been so complicated,” he sighs, citing an
annual April event known as “Dine Around the Bay.” The idea,
he continues, “is for people to try each of our restaurants, and
each time they go, at the subsequent restaurant their discount
gets bigger. It has worked, but it’s a rather troublesome
promotion and hard to communicate. For the most part,
people today don’t have time to figure things out. They want to
keep it simple.”
So how does a sales suggestion become a much-anticipated
event, for both guests and staffers? Restaurants of all shapes,
sizes, and price points wrestle with this question. The process
of brainstorming something fun and creative can be, well, fun
and creative—but then comes the extra work that’s inevitably
involved in pulling it off. And who has time for extra work?
“They’re going to
remember how
gracious we were
and how fun it was,
Creating good memories is ultimately a money
maker for Pastry Chef David Guas.
A tag team of two chefs and a sommelier walks
12 to 15 gentlemen through the fine points
of shucking oysters, making tarts, garnishing
plates, and selecting wines, and they have a
blast doing it. The dishes include ingredients
with either romantic history or symbolism: figs,
avocados, oysters, caviar. The idea, says Guas,
would adapt well for other special occasions,
including birthdays and anniversaries. The
cost per person is a reasonable $70 for a twohour lesson.
“We have a minimum number of attendees in mind so that
we’re not losing money,” Guas explains. “But by the time we
pay the staff, buy the product, and give away a few things,
we certainly don’t make money on it. We see it as public
relations—100 percent—and tapping into a new client base is
the top priority. Once we get ’em in here, it’s up to us to make
sure we get ’em back, based on their experience.”
For the same reason, Guas also hosts children’s baking
classes at Christmas. He admits the extra hours of preparation
can be tedious, but he has devised a to-do list for the month
leading up to each event that includes publicity. The waitstaff
talks it up, and general managers notify their guest lists by
e-mail, encouraging them to bring friends.
and they’re going
to come back.”
—David Guas
A New Take on the Cooking Class
There are plenty of simple, easily adaptable ideas for effective
sales boosters, and interestingly, a major bottom-line gain is not
necessarily the reason to undertake them. For instance, would
you fly in the face of logic and run a promotion that prompted
potential diners to stay home on a major dine-out holiday,
such as Valentine’s Day? Pastry Chef David Guas claims it’s not
a concern at DC Coast Restaurant in Washington DC, which
holds its “Sweetheart’s Special” cooking classes—for men only.
“They may stay home that one day, but they’re going to
remember how gracious we were and how fun it was, and
they’re going to come back,” says Guas. “This is about building
relationships.”
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“I’ve seen so many ads and billboards with absolutely beautiful,
creative artwork, and I think, ‘But how is that driving me to their
restaurant?’” she observes. “It’s not enough to look great; you
have to know who your customer is, and you also have to know
what customers you’re not getting, and why, in order to reach out
to them. I’m still a believer in direct-mail pieces, targeted to the
right person.”
Redefining Loyalty
The National Restaurant Association estimates about 40 percent of
restaurants offer their customers a loyalty program, up 15 percent in
the last couple of years. But these plans are anything but sure guarantees of additional business, as Tavistock Restaurants learned when
they inherited a traditional “frequent diner” program (customers
earned points that were redeemed for gift checks) with their newly
purchased properties four years ago.
“When we evaluated those guests’ purchasing profile and
determined what a $25 redemption did to drive their decision
making, we actually decided to fire all those customers!” says
We risked
“
at least $ 6 million
Tavistock President Bryan Lockwood aims too “engage the guests”
with in-house promotions.
Beyond the Bottom Line
Building loyalty is a unique challenge in markets like Las Vegas, where the typical tourist
stays three and a half days, according to the
city’s Convention and Visitors’ Bureau. So, in
addition to a full slate of tourist-driven advertising, the Wolfgang Puck Fine Dining restaurants
cater specifically to locals with an ongoing perk
called “Compliments of the Chef.”
“It began in 2001 and was launched to
serve the needs and time constraints of
our locals,” explains Stephanie Davis, director of brand communications. “The program offers priority reservations and preferred seating times
for local customers, and a complimentary dessert
per couple.”
Managers take guests’ word for it that they are, indeed,
“locals.” Davis says the reservations and seating times are
key, but it’s the free dessert that leaves that final, positive
impression: “It’s a little something extra that shows people
you care.”
Like any upscale eatery, Davis says Puck’s restaurants
can’t afford to be kitschy in their promotions; offbeat can
be off-putting. In her view, restaurateurs often come up with
a promotion idea they think is fun and wade right into it,
never asking the obvious follow-up question: fun for whom?
worth of sales
to make the decision
that we needed
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MAY 2007 | santÉ
better customers.”
—Bryan Lockwood
Tavistock President Bryan Lockwood. “We risked at least $6 million
worth of sales to make the decision that we needed better customers.
We didn’t see that the guests were inviting friends or buying up on
wine sales—they weren’t doing anything outside of their normal
purchasing habits. And we had to say, ‘That’s just not going to get us
where we want to be.’ It was a giant step.”
Today’s Tavistock promotion feels like anything but a discount,
although a price break is the ultimate prize. From Thanksgiving
through the end of December, guests at the group’s 20 branded
properties (including Napa Valley Grille, Blackhawk Grille, and
Cafe del Rey) receive a “Holiday Gifts” envelope with their check.
They’re invited to return in January to open the “prize” envelope
in front of a manager to see which of three special perks they’ve
won: $20.07 (for this year) off the check total; one free meal; or the
The Collegial, the Charitable,
and the Decadent:
More Business Boosters
• In Denver, Mondays are “Service Industry Nights” (SIN)
at Nine75, the Sullivan Restaurant Group’s hip, casual
comfort-food eatery. Anyone who shows proof of
restaurant or bar employment receives a 20 percent
discount, on both food and beverage.
• In Chicago, the Signature Room (on the 95th floor of
the John Hancock Building) has raised $500,000 for
160 different nonprofit organizations with its “Charity of
the Month” program. Charitable organizations apply for
consideration; each year kicks off with a January event to
honor all 12 groups selected for the year. Ten percent of
the profit from a four-course “Signature Selection” meal is
donated to the charity for each month, prompting a new
roster of first-time guests every 30 days or so.
• In Cupertino, California, Alexander’s Steakhouse has
created perhaps the ultimate promotion to boost a single
check average: the “Evening of Extreme Luxury” sports a
$10,000 price tag that includes a roundtrip limo ride from
the couple’s home, fresh flowers, and a decadent, multicourse menu paired to premium wines that ends with
“Jewels and Dessert,” a course that garnishes dessert
with diamond jewelry.
From Thanksgiving through the end of December, guests at Tavistock’s 20 branded
properties receive a sealed “Holiday Gifts” envelope with their check. They’re
invited to return in January to open the “prize” envelope in front of a manager and
see which of three special prizes they’ve won.
grand prize of dining free once a month for a full year at the
restaurant.
“The holidays are so busy that it hampers our ability to
connect with guests as much as we’d like to,” Lockwood
observes. “So they’re presented with this gift while they’re
out buying their own gifts for other people—to let them know
we’re thinking about them. Then when things slow down in
January they come back, and with each and every one, there’s
a hand-in-hand connection between the management staff
and the guest, a chance to get to know them better. It’s fun
for the managers and gives them a platform to chat with the
guests. Sometimes the chefs get involved in the redemptions,
too. It’s like a thread that [stitches] together the emotional
connections we try so hard to work on.”
The theme allows for some personal recognition of
each guest, and the certificate includes an opportunity for
guests to sign up for e-mailed newsletters. “Holiday Gift”
redemption is an impressive 37 percent. Lockwood explains
it’s a matter of increasing repeat business without decreasing
perceived value. It pays off in other ways as well, as guests
opt into the newsletter program and refer friends. Or to
summarize Lockwood’s theory of good promotions in his
own words: “The win continues down the road, if you engage
the guests.”
Chris Thomas is a food, restaurant, and business writer based in
Boise, Idaho, and Seattle, Washington.
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