Why Being Good Rarely Leads to Success in the Restaurant Business

Hopefully you don't believe that merely having good food and service will cause customers to flock to your restaurant. Maybe 20 years ago in a good location, but not anymore. Good food and service barely gets you into the game today. Of course, good food and service are important, but unfortunately not sufficient for a restaurant, in most markets, to attract any more customers than the competition.

Sustainable success today generally requires at least one differentiating characteristic or point of difference, to cause people to become loyal, enthusiastic customers. To be effective, the characteristic MUST stand out. Understatement or subtlety will very likely not translate into the results you want. Consumers must desire your differentiating characteristic enough to break out of their normal routine or pattern to get it.

A differentiating characteristic is generally connected to some aspect of a restaurant's operations, service, products or ambiance.

For example, Pal's Sudden Service, a QSR chain based in Kingsport, TN, focuses intently on operational excellence. In speed of service and order accuracy they are unmatched in the industry (in fact, their service times are 4 times faster than their top competitor and they average 1 complaint out of every 3,500 orders). As a result, their 27 restaurants average over $1,500 of sales per square foot, possibly the highest in the industry.

Profit in business comes from repeat customers, customers that boast about your product or service, and that bring friends with them.
-- W. Edwards Deming

Magnolia Pancake Haus serves breakfast and lunch in two free standing locations in San Antonio, Texas. Owner and RestaurantOwner.com member Robert Fleming believed that Magnolia would excel by serving an exceptionally high quality American breakfast in a casual upscale atmosphere. By delivering on that strategic vision and adding some unique specialty items to the menu, he has effectively differentiated his restaurants to such a degree that his customers are willing to pay higher prices and often wait up to an hour or more for a table to enjoy the Magnolia experience.

Then there's Chick Fil A. While they are certainly very competent operators, we've talked to many people who say the best thing about going to Chick Fil A is their exceptionally personable, polite and capable employees who are famous for smiles, eye contact and habitually replying "my pleasure" to appreciative customers. We'd have to agree that every Chick Fil A that we've ever been to is in a class by itself when it comes to caliber of staff in the QSR segment.

While having "better" food, service and/or atmosphere is preferable to the alternative, in most markets merely being "better" is not sufficient to differentiate your restaurant in a meaningful way. The three concepts above enjoy "significantly" higher sales volumes and customer counts than the norm because they excel at their core competencies to the point they are not just perceived as "better" but as fundamentally "different" than their competition.

What is your restaurant known for? What does your restaurant do better than anyone in your market? What could you begin doing today that would elevate your reputation or competency to the point of making your restaurant stand out as being not just better, but essentially in a "different" league than your competition?

Take some time to ponder these questions. The answers could provide the seeds of a future that is significantly more successful than the past.

Is there anyone else in your organization who should read this?

Have a profitable week!

Jim Laube & Joe Erickson