Why it’s hard to sell new technology and other innovations to Independent Operators (Bars/Restaurants)

In response to some questions on LinkedIn, I thought about how to express the primary reasons why new tech, new products and new ideas in general are a hard sell to independent F&B operators. I was a marketing director and buyer for a chain of restaurants for more than 10 years.  Also I’ve been a consultant and agency exec who’s successfully sold in programs and products to the F&B industry.

I’ve been on both sides of the table selling and buying over many years, so here’s my take on the top reasons my industry is such a tough sell:

(1) Sales people often don’t have experience in the industry, don’t understand problems, workflow, language of F&B operations.  So products seem marginally relevant and trust is not established.  Jargon is a big problem on both sides.

(2) Past bad experiences saying ‘yes’ to supposed ‘free,’ ‘no-brainer’ or ‘money making’ products/systems that turned out to be anything but.  Every scammer, bust out or ball-dropper from the past works against today’s good sales person persuading the operator.

(3) Operator sees their business as established and successful, and views new idea sales person as trying to leverage their success to build a start up on their shoulders.  For some reason this breeds resentment and unwillingness to buy/try.

(4) Complexity is your enemy in F&B operations. It’s already too complex and a struggle to operate food and beverage retail.  Good operators are focused on streamlining and simplifying not adding layers.  Anything that takes your eye off the ball of “the basics” better be not just somewhat beneficial but a grand slam or you’ll lose more than you gain.  I looked to get 7x return on investment for anything we spent time or money on when I was a buyer/marketing director for large independent. That’s a tall order.

(5) One of the biggest headache in F&B operations is maintenance and repairs.  One more thing to break down, have to call customer service/IT about, download updates, read manuals etc is extremely unwelcome. There had better be a huge benefit.

(6) Training is a huge time and resource suck in a high turnover/low professionalism industry like bar/restaurant.  Anything that requires training introduces higher costs than sales people usually appreciate.  Most sales people don’t know that many of us in the industry refer to training as “soft costs.”  To be controlled as stringently as food and beverage COGS.

(7) Customers tend to go to full service restaurants and bar for an old school high touch, personalized experience.  Sales people tend to not realize tech solutions that might be good for fast food are actually a downer for restaurant/bar customers who crave personal attention.

(8) No, independent operators cannot hire a new person just to handle whatever it is you are selling, offer additional discounts to customers or staff incentives.  The margins are not there.  Support staff in independent F&B is sparse, sales people usually do not realize this.  Most likely the person you are pitching will be responsible for all additional work generated by the product/service they say ‘yes’ to. Do you now see why they often say No?

(9) Frequently sales people will tell operators “you don’t have to do anything.”  In our experience this is never true.  More often than not new technology, additional inventory and other “feature bloat” to our establishments becomes an additional pain for operators.  Scheduling equipment installations is a classic example.

(10) This one kind of pulls together (3), (7) and many of the others on this list:  A basic truth is that any problem that the customer experiences in an F&B establishment they will hold the operator responsible for.  So the operator is putting their reputation on the line to add any new technology or in fact anything being sold in by a supplier. This makes them very gun shy and reluctant to relinquish to anyone even a small element of control over the customer experience.

(11) Just plain too busy for another meeting, sales call or study needed to make an informed decision.  Staffs, margins, and time are so tight in our business it’s hard for others to understand.  And the show must go on every day, serving customers food, beverages and a good time!

Watch this space for some solutions I will post soon.  Please comment!

Good News for Chicago and the economy, rising home values help hospitality and all business

Home prices show biggest annual jump since 1988

January 28, 2014

Chicago-area single-family home prices jumped 11 percent in November compared with the same month last year, the biggest yearly local increase in almost 15 years, according to closely watched data.

The annual local increase was the highest since December 1988, according to a statement with the S&P/Case-Shiller indices released today.

Year-over-year local prices showed a similar jump in October.

The S&P/Case-Shiller 20-city index rose even more, with November prices up 13.7 percent over the same month the previous year.

Compared with October, prices fell 1.2 percent in Chicago, the biggest drop among the 11 of the 20 cities that saw a decrease. The 20-city index showed a 0.1 percent drop from October.

“Despite the slight decline, the 10-city and 20-city (indexes) showed their best November performance since 2005,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement. “Prices typically weaken as we move closer to the winter.”

On a seasonally adjusted basis, Chicago-area local prices rose 0.8 percent in November compared with October. The 20-city index rose 0.9 percent.

Local prices are down about 25 percent from their peak in September 2006, according to S&P/Case-Shiller data.  Source:  Crain’s Chicago Business.

Bars/Restaurants: 7 more effective profit-driving activities you are blowing off to work on your Social Media

  1. Going from table to table to greet guests every day
  2. Updating your food and beverage menus seasonally
  3. Creating fun, attention-grabbing marketing inside your establishment (four walls marketing)
  4. Inspiring your staff to smile, remember guests’ names and upsell.
  5. Fixing any seating/bar/waiting areas that are too hot, too cold, too noisy or dirty.
  6. Upgrading your music and entertainment
  7. Making your website mobile friendly

Is Bring Your Own Food the new BYOB?

“It’s a win-win, it cuts back on our expenses and also allows our customers to vary it up every time they eat here.”  Beth Lindsay, the Board Room, Washington DC

http://www.washingtonpost.com/business/capitalbusiness/forget-byob-area-bars-increasingly-allow-patrons-to-bring-their-own-food/2013/12/24/c0747dc0-6777-11e3-ae56-22de072140a2_story.html?byo food copy