How do you go about growing a hospitality business? I get this question in various forms from almost all of the business people I deal with. Everybody is looking for the magic formula — the simple fix that will cure all their income problems. While every business is different, there is one basic issue that is common to all. The issue is value for money. It is the first thing I try to assess when I go to help a business. The concept is often referred to, but more in lip service than in action.
Value for money is a perception, or to put it more simply, a feeling. It is the state of mind that a customer has when they leave your premises. Your own opinion of your business’s value for money is meaningless, it doesn’t count. The only opinion that counts is that of the silent majority of your customers — who vote with their wallets and purses.
The perception of single dinersI first pondered this issue of customer perception when I worked for Hilton Hotels a long time ago. I often used to dine in the Hotel’s bistro and spent a great deal of time observing the behavior of the diners. The first great revelation I had was as a result of the waiting staff telling me that they had far more problems and complaints from single diners than from group diners.
About the same time, I was doing a fair amount of travelling and often used to dine alone in restaurants and hotels. I used to hate it — going to strange, unfamiliar places, eating alone with no one but the staff to talk to. I was often left sitting for long periods, waiting for the food to arrive. Naturally, I would spend that time examining everything that was happening around me in great detail. It is easy to adopt a critical outlook in these circumstances, and I often did.
The same experience can lead to totally different perceptions
I also had my fair share of business and social dinners in these same restaurants, when I shared company for the meal. If my company was stimulating, I became largely oblivious to what was happening around me and concentrated on the conversation.
Carrying these observations about perception one step further, I gathered all the research on customer response in the hospitality industry I could find. It struck me that if some simple rules or procedures could be formulated to help business owners manage customer perceptions, I would have valuable information for my training courses and consulting services.
The second rule should perhaps go like this: ‘A customer’s perception of your value for money is formed by comparing the cost of what they have received from you with the cost of what is generally available elsewhere’. If you are average, you have a problem — average was defined by one wit as ‘the crème of the crap’. Average is not good enough to generate growth in customer numbers during a difficult economic period.
Go check out your competitors
It is amazing the reaction I get when I map all the real competition a business has and drag the owner around to look at it. The result is often a complete and immediate re-evaluation of priorities. Only a minority of business owners get out regularly and assess their real competition — they usually assess those they think are their competition. The public perception can be quite different.
Consistency is critical
Consistency is also a critical factor in perception. You are not doing yourself any favours if your standards vary. People usually dine out with some hidden agenda — it could be anything from seduction to simply impressing a business colleague. You put your social standing on the line every time you recommend a restaurant or take someone to one.
Value for money is a feeling. If your business is not buzzing, your customers are not feeling it.