Waiting for fuel costs to fall? Dream on.
There's a
fundamental shift underway in the cost of doing business: this could be the
greatest challenge of the decade. Attention has to be focused on three areas:
direct supply costs, customer experience and the impact on staff.
Costs go under the microscope
Last time there was high inflation (in the 80's), much of it could be passed on
to customers - raising prices was a sport. But when fuel prices multiply by
four, this is not a game. Even cheap consumer goods and machinery will take a
hit. As an example*, it now costs $8,000 to send a container from Shanghai to
the US East Coast, compared to $3,000 in 2000, and similar rises have hit
Australian and European importers. Goodbye cheap tableware, furniture and
linen.
Delivery charges are now a cost centre. Free, fast delivery used to be the
norm. Now there are minimum orders, fuel surcharges and other add-ons. Have
another look at minimum quantities and par levels. Do methods that relied on 'a
little and often' still make sense? Does everything have to be delivered within
24 hours?
Kitchen and bar profit margins have to change. Still using
old-fashioned benchmarks? The cost of goods needs to fall by at least 3% to
make space for the rise in fuel and energy costs. This is where chefs can earn
real bonuses - finding new ways with presentation and less expensive
ingredients. Recipe Management Software is more important than ever.
'Normal wastage' is out of date. Over poured liquor, badly trimmed food, slow
work and laborious prep. Cutting 60 tasks by a minute each is saving an hour of
time. Once we accepted it, now we don't.
Kitchens are energy guzzlers. Does the kitchen exhaust suck up your expensively
cooled air? It's important to have the exhaust system supplied with the right
quantity of 'make up air' so it doesn't drag it from the front of house. This
is one of dozens of costly inefficiencies that don't matter so much when energy
is cheap, but hurt right now. Fridge seals, dirty motors and leaky taps - use
one of the Staff Cost Control Surveys to gather suggestions. Professional
energy audits usually pay for themselves in weeks.
Make life a little warmer (or cooler). Does the air-conditioning or heating
need to be quite so efficient? A rise or fall of 1 or 2 degrees won't hurt
anyone. Make a story about it, and bring your customers on board.
Reduce customer anxiety
We make our money by giving people a happy, stress-free experience, so it's
time to dial up the smiles.
Read the Tour Diary from the 2008 Trends Tour to Chicago & Las Vegas -
click the purple button on the left. Now with a huge new Photo Gallery.
Keep the atmosphere cheerful. A visit last week to
Talk and buy local. Do it sincerely, and share with customers. They know you
can't feed them 365 days a year from local farms, but love to see an honest
effort. Are Perrier and San Pellegrino really so magical that you should bring
them around the globe? Consumers are asking about 'food miles' - how do you
answer?
Can you still deliver for free? Can you afford to offer free delivery for pizza
and take-away meals? Chances are if you institute a small delivery fee, it will
be eagerly copied by your competitors. The cut-throat pizza industry pioneered
this -- now it's time to explain and retrain our customers.
Don't make people drive if they can do it online. Buying gift cards and
t-shirts, checking function menus and seeing room layouts -- it should all be
possible online. In fact, many customers would rather not talk to you -- they
prefer to do it at the keyboard. Is that possible? Have another look at the
recent Google Services article for fast, free methods. Here's the new brief for
web designers: make it easy for customers to spend without getting in their
cars.
Refund the price of a litre or gallon of fuel. It's a clever promotion being
used by some operators - acknowledging the issue and slipping in a discount
that's not over the top.
Explain and educate. Customers don't really want to hear your war stories, but
there are ways to gently remind them why prices have increased, or 'free' now
has a 'fee'. Brief your staff so they can defend price changes, and add an
occasional short note to the menu.
Staff are hurting
We're not famous for high wages: rising costs will soon flow through to pay
increases. Your empathy will help minimize excessive demands and help people
come up with solutions -- make this a 'we' project. Can car pooling be
encouraged or organized? Are rosters worked around the availability of public
transport? Is the boss's big SUV the right look for the times?
Work with staff on fuel saving tips. Here's one: if you travel at 80km per hour
instead of 100km per hour, you will reduce your fuel consumption by 50%. This
is one of many tips you can find on Google - ask someone to do a search for
'fuel saving tips' and gather a 'top 10' list for your location. Projects like
this are always motivating.
Create a new staff hero. Put the sales bonus on hold and create a new category
of winner - the Energy Warrior. 50 staff all coming up with one idea for
improvement creates a powerful force for change.
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