April 1, 2004
RH Staff
Picture a room of the country's top restaurant executives being asked to imagine they provide food and beverages free of charge. After you're finished laughing, imagine that everyone thought it was one of the smartest things they had ever heard. Can't imagine that, can you? That, however, is what happened last October when marketing expert Adrienne Weiss presented that thesis at the Restaurant Leadership Roundtable.
Ms. Weiss' proposition, however, did include exchanging money. But instead of paying for food and beverages, Ms. Weiss asked us, "If your food and drinks were free, how much would your customers pay for the experience?" As a following statement, she offered, "If what your customer would offer to pay for their experience is less than your average check, your restaurant has a problem."
After 27 years in restaurant management, that was the most thought-provoking question and statement I'd heard. In fact, it has completely changed how I think about our restaurants. It's the definition of the elusive concept—value we all try to capture.
We can no longer look at menu prices or average checks to determine value. Instead, if customers believe their dining experience was worth the price they paid, then the meal has value regardless of the portion size of my filet or how many ounces of scotch I pour.
To survive, all things evolve, and restaurants and customers are no exception. Today's dining public is more sophisticated than ever. They are increasingly paying us first for the experience we provide, and second for the food we serve. In fact, good food and honest drinks are just expected in today's competitive environment.
To succeed in this era of experience over food, we must analyze what customers want and what our establishments mean to them. How can we give guests the experience they're looking for and make it worth their time and money? And how can we make it so worthwhile that they will return again and again? This is not about completely revamping your restaurant. This is about refining and rethinking how you relate to customers in order to stay relevant to them.
P.F. Chang's, for example, does a wonderful job of transporting guests to another place. Their ability to provide an experience has a lot to do with the dècor, layout and music in their restaurants. It involves menu and plate presentation. Their style and quality of service add to the feeling of getting away from daily life and enjoying a respite, even just for the lunch hour.
The ability to do this comes from seriously examining what customers value and designing an experience around that.
I'll give you another example a little closer to home for me. In designing our newest restaurant, Harry's Tap Room, we considered our customers, what they value, and how we could be relevant to them. We decided they most likely wanted black-tie quality food in a blue jeans atmosphere. Based on that, we designed the restaurant and the menu. We chose to offer an upscale experience without the hassle of a suit and tie. We selected first-rate china. We created a new experience for them without completely changing what our brand means.
Let's assume you've bought into Ms. Weiss' thesis and want to make sure your customers would pay as much for the experience you give them as they would for anything on your menu. How do you start?
Start with analyzing what you mean to guests and what experience they're looking for. Determine what you can change in your establishment to satisfy the needs of today's customer. Everyone looks for a place to get away from the demands of daily life. If you can provide that consistently to your guests, you can't help but succeed.
In addition, menu prices should not set the stage for the experience you offer. Your customers don't know about your costs for labor, food or rent, and that's not what is important to them. The experience is important. Did they get away from real life for awhile? Did they have someone cater to them? Was the experience— not just the entrèe—worth the amount on the bill?
The French origin of the word "restaurant" refers to a rich, restorative soup meant to rejuvenate the body and spirit (John Mariani—America Eats Out, 1991). Restaurants today serve the same purpose. People come to our establishments a bit weary, and if we've done our job, they leave restored and rejuvenated. To run a restaurant is no longer about delivering the right entrÈes to the table. Today, it is about delivering an entire experience. The quality of your food and service should be a given, so the main question you want your guests to answer positively is: "Was this a worthwhile and valuable experience?"
Michael Sternberg is chief executive officer & co-founder of Sam & Harry's Restaurant Holdings, LLC.
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