How do I establish a hospitality business? — Part 2

Written three years after the previous article, after further frustration dealing with the same problems in many more hospitality businesses. See also: How do I establish a hospitality business? — Part 1 and Part 3

Can somebody explain something to me please? Why do many restaurateurs persist in spending vast sums on the physical aspects of their businesses and very little on the human side? I sat at a table setting the other night that must have cost $1,000 — quality crystal glasses, expensive silverware, crockery you have to take out a bank loan to purchase. The surrounds were opulent, the tables were antique, the artwork extravagant — it was like the palace of Versailles. The only problem was the service was woeful and the food was average. I counted myself lucky that I wasn’t paying for it.

I can feel a major crusade coming on. I’m seeing restaurants like this too often and there’s a danger I’ll imbibe several bottles of red one night and make a cretin of myself (what again?). I feel like grabbing the owner and shaking them like a terrier while screaming: ‘DON’T YOU UNDERSTAND YOUR OWN BUSINESS?’ I’ll try to resist because a major public wobble wouldn’t be too good for my business reputation.

How is a customer’s perception created?

Successful hospitality businesses carefully manage perceptions

Successful hospitality businesses carefully manage perceptions

If you go to a restaurant to dine, and your total perception of the experience represents 100%, how would you break up the importance of food, service and ambience? I’ve recently asked some participants in our training courses and there was a consensus — they believe it breaks down to 40% for the food, 40% for the service and 20% for the ambience. What do you think?

My own observations lead me to agree with my students. Whenever we conduct customer perception surveys (which is a continuous process these days), I’m surprised at how customers will not notice, or will not comment about the details of their surroundings. They will note a gloomy atmosphere or a lack of cleanliness, but they will ignore such things as clean toilets that badly need refurbishment and cheap table settings and still give the place a big tick.

Human interaction is carefully noted

Those same people will, however, make careful note of every nuance of their dealings with restaurant staff. Comments about badly groomed waiting staff and arrogant, slow or absent service are common. You can almost feel the anger or disappointment leaping off the page as you read the reports sometimes. To put the issues into proper context, I’ve never had a comment of more than a few lines about physical, but we often get pages of comments about human interaction.

People create hospitality, not places or things — and it’s hospitality that justifies the difference between a thirty dollar main course and a ten dollar one. The food is rarely 200% better in the former case. Most people are not naturally hospitable. They need to be thoroughly taught and consistently supervised before they deliver. This costs money.

Where does your food stand in perception?

The food is also important — but not for obvious reasons. You’d think the public would be super-critical, especially where high prices are concerned. It seems that this is not so. As long as the food looks and tastes good they seem to accept what they are given without too much question. What they comment about the most is temperature, delay and consistency. Our surveyors are very intolerant of cold food and expect to get a dish within a reasonable time that looks and tastes the same every time they visit. Most of them couldn’t tell if a sauce was made using a booster or flavouring, for instance, and neither can I most of the time (no apologies to those sensitive artistes among you who think the public all have palates that can taste down to the molecular level).

Your food is important, but only one component of customers' perception

Your food is important, but only one component of customers’ perception

Flashes of culinary brilliance are interesting but seldom commercially viable. You can count the financially successful restaurants that operate at the very top of gastronomic and service excellence on one hand in this country. What really matters is your ability to repeat a performance again and again without hiccups, no matter at what level in the market you operate.

I sometimes think some of my associates run their restaurants for the approval of other restaurateurs and ignore public opinion. Peer status is a powerful thing — it blinds some people to the realities of life — realities like the lack of direct relationship between expenditure on décor and perceptions of ambience.

Spend your money where it counts

I’ve never had a restaurant rate highly without having good food and service, and I’ve never had a restaurant rate well on its décor or ambience alone. If 80% of customers’ perception is created by human interaction and human production, why, oh, why, dear Lord, do some restaurateurs fork out huge sums of money on their physical presentation and next to nothing on developing their staff? It doesn’t make sense to me.

Be very careful of management advice from an accountant.

Be very careful of management advice from an accountant.

I can concede that business owners could be loath to spend money on staff if they think those staff won’t stay around for very long, but this logic is invalid and somewhat short-sighted. Is this an excuse to then direct development funds into an area of the business that will not yield a proportionate level of return?

One other possible reason is that we are talking about an intangible here. If you spend $20,000 on your staff it is not going to show on your balance sheet or be immediately reflected on your profit and loss statements.

Your accountant would probably have a fit — but then your average accountant has not been trained to deal with the realities of business. The fact that you can’t put a dollar value on something doesn’t mean it doesn’t exist.