Categories
Banking Customer service Management Restaurants Retail Small Business systems

“Nothing can be done about it.” Phooey.

One of the readers of my newspaper column owns a bar/restaurant.

Recently she told me that one of her bartenders accidentally rang in a $6 charge twice on a debit charge card.

They found the mistake the next day and corrected it by reimbursing the $6 to the customer.

The customer called back and said she had a problem.

Her debit card bank, US Bank in Boise, charged her $160.50 because her debit card (due to the bartender’s error) went over by $2.00.

The owner called the bank there because he found it difficult to believe the customer’s claim of the amount she was charged. The bank verified the fee and said “nothing can be done about it”.

What the bank employee’s “nothing can be done about it” comment really means is likely one of two things:

Either a not-too-customer-centric “I don’t want to do anything about it.” or “My boss won’t let me do anything about it.”

Not wise, but not unusual depending on the management involved.

Of course, my friend the bar/restaurant owner reimbursed her for the $160.50 bank charge.

But she was curious, so she called her business bank here in Montana to discuss their procedures.

She was told that at $27 per overdraft charge, it can add up as far as the computer system shows. However, if the customer were to call (as the bar/restaurant customer did, and as the bar/restaurant owner did)) and explain the errors (restaurant wrongfully double charging, and only $2.00 over her limit) the bank would waive those fees.

I’ve had experiences with this same bank where checks were accidentally written on a closed account. Once the check amounts were paid, the fees were refunded.

In other words, they have a policy (a good thing), and they have some automation in place (usually a good thing) but they also have a human side as well.

A very good thing.

There’s nothing wrong with having strong policies in place. And there’s nothing wrong with using automation to help run your business (I’m the last one you’d find telling you not to automate), but you should always leave room for the personal touch.

There are some businesses that realize this and make a point of empowering their people to make a decision that is right for the company and the customer.

Yours should be one of those.

Categories
Corporate America Education Ethics Legal Management Marketing Public Relations Restaurants Small Business Word of mouth marketing

How to tick off a big group of customers

Homeschoolers do what they do for a number of reasons.

Some dont like the local schools. Some homeschool so they can include religious teachings in the curriculum, or to avoid stuff in the public school curriculum that contradicts their faith.

Some do so because their child has something going on that might not help them succeed in public school. Some do so simply because they can – who wouldnt want to spend an extra several years with your kid, all day long, if you could?

Today’s guest post is from Ian over at Musings from a Catholic Bookstore, where he talks about the business lessons that the folks over at Subway missed while implementing their misguided campaign for school kids.

Me? I’m cooking for 80 or so folks at the Order of the Arrow Ordeal weekend near Bigfork, MT. See you Monday.

Categories
Apple Automation Competition Management Marketing Positioning Productivity Real Estate Restaurants Retail Rotary Small Business Software Strategy Technology The Slight Edge Web 2.0

Small business + iPhone app = opportunity

Disclaimer: I simply have to admit that it’s unlikely that I would buy an iPhone until Apple decides to discard AT&T, or Steve Jobs’ gang adds a better cell carrier to the mix. I’m simply not willing to deal with those guys if I don’t have to.

And yes, I’d probably get over it if the right opportunity (or idea) came to me.

My AT&T issues aside, your business could benefit a great deal from taking advantage of the fact that there will be even more iPhone users out there – with what appears to be the best mobile application platform built to date.

Let’s talk about a few possibilities.

Let’s say you own a restaurant. Imagine if an iPhone owner, their spouse and another couple are driving around deciding where to go for dinner.

They call up an app called TonightsSpecial on their phone. Because the iPhone has a GPS in it, it knows where you are. It displays the current specials at restaurants within a 15 minute drive (or 5 or whatever the iPhone owner decides) of their current location.

It shows the wait time for seating (if you so choose), price range, cuisine, and how to get there from the iPhone’s current location – again, since your phone knows where you are and where the restaurant is.

And with a touch, it tells the restaurant to hold a table for 4 for seating 15 minutes from now, because you’ll be right over.

Or maybe you own a motel. And some poor, tired traveler has been driving all day to get to Mount Rushmore, the kids are tired, their spouse is after them to find a motel and everything is full because it just happens to be the first weekend in August – ie: the Sturgis motorcycle rally.

Except that this traveler’s iPhone has an app on it called EmptyRoom that tells them where all the empty hotel room inventory is within 30 miles of their current location. And since you registered your hotel with EmptyRoom’s service, it knows when you have a vacancy.

Instead of that family driving past Rapid City because every hotel they checked was full, they turn left just past the airbase and follow the directions on a phone to a room that cancelled 23 minutes earlier because a biker got held up by some rain (ok, ok, that wouldnt happen with a REAL biker, but I digress).

Rather than having a room-night go up in smoke, you just did 2 things: Rented a room for the night that was probably going to go to waste and 2, pulled a tired driver off the road and made their spouse and kids a lot happier and safer.

Or, you’re a Realtor. And you have built an iPhone app that automatically notifies a client on their phone when a home that matches their needs comes on the market.

You’re busy, out making a sale, or at a closing – yet your iPhone app is telling the client where the newly-listed home is, how to get there, what the price is, and if they tap a button in the app, it’ll make an appointment using the open times in your shared Google calendar (or me.com, or whatever) to tour the place.

And of course, it’ll only do that for people you have under contract, if that’s how you want it to work.

Or, you belong to a network of independent coffee shops. Starbucks is your arch enemy, other than the nice thing they did to sell everyone on how cool it is to buy $4 cups of coffee:) So when you join the independent coffee shop network, your shop appears on someone’s iPhone when they open that app.

Again, since a GPS is built-in, it can show me the closest independent coffee shops to the iPhone’s current location. This one can be cloned for just about any independent business. Bike retailers. Pizza shops. Dry cleaners, etc.

No matter what business you’re in – and especially with service, retail, restaurants and lodging, there are a pile of iPhone application possibilities here to make your business even more personal, to deliver even more value and to take advantage of an opportunity that most competitors wont even recognize.

Sure, all of this can be done now, from a web page, or the Yellow pages. You have a chance to bring it into their hand, without extra effort, so you can draw them specifically to your business – and that’s exactly what they want, otherwise they wouldnt be using that iPhone app in the first place.

Pre-sold buyers. Everyone likes them.

Categories
Community Competition google Marketing Positioning Restaurants Small Business SMS websites

Sticking a fork in restaurant websites

Though I haven’t mentioned it here in a while, my series of columns in the Flathead Beacon about local websites has continued over the last couple weeks. It’s on topic here as well, so let’s elaborate on it a bit further than I have space for in the Beacon.

Next week’s column takes a look at local restaurant websites in my area.

One thing stands out here, and thatâ??s the chains. Most all of the franchise restaurant chains have corporate-managed websites that are well done. But weâ??re not here to help them â?? they have plenty of help already.

What you can do is look to them to see what to consider when putting your web site together. Things like menus, a map to your location (pleaseâ?¦), whether or not you do catering, what meals you serve (ie: do you serve breakfast and lunch only?)

One example was a restaurant between Columbia Falls and Kalispell that I happen to like. Their site is simple, isnâ??t much eye candy-wise, but it touched on the essentials for a 3 or 4 page restaurant website.

It talked about their location (included a graphical map), their phone number, their address, their catering info (could have been more complete), their hours, which credit cards they take and the facilities they offered. This site could easily be completed in an afternoon. No, itâ??s not as fancy or as complete as it could be but it is what is absolutely necessary.

Slow cooked Angus sirloin, local asparagus, truffle butter sauce
photo credit: irrational_cat

They didn’t bother to go into great detail on the food, the special ingredients they fly in from coastal fisheries, their use of local game, organic local vegetables, custom processed meats and local seasonings, the romance of their massive fireplace area, the expertly trained staff, the menu, special occasion bookings, private dining rooms, banquet and special occasion services, their expert sommelier (not sure if they have one), the chef and his/her training and experience, and so on (those are all hints, if Iâ??m not being obvious enough).

No testimonials. No photos. No video. Cooking is an experiential thing. Video and photos are critical.

Butâ?¦their site achieved an important goal: to provide basic information needed to contact them and go there for a meal.

The unfortunate thing is that many local restaurants had no site at all, and that included those who also offer catering.

Iâ??ve gotten some good feedback from previous posts on this topic, including a great phone call from a reader in Kalispell whose input I will include in a later post on the subject.

Someone told me they felt that not all businesses need a website. Sorry, but I have to disagree.

Even if all you do is put up a one page site with your location, hours and a map, that is far better than nothing. You wouldnâ??t likely open a business and not have a phone. You wouldnâ??t skip on printing menus in your restaurant. If youâ??re a consultant, attorney, CPA or other service professional, you wouldnâ??t blow off printing business cards.

Not having even a one page website is equivalent to not having a phone or a business card.

Even if your business is busy and doesnâ??t need more work right now, you need a website. Everything has ups and downs. The time to dig the well is before youâ??re thirsty.

See all those kids running around with cell phones? They wouldnâ??t use the Yellow Pages unless you forced it on them. It wonâ??t be long before they are your 18-35 demographic group.

If you donâ??t have a website, to that group of people, you donâ??t exist.

Kids these days know that they can text â??59937 mexicanâ? to 466453 (ie: G-o-o-g-l-e on your phone’s dial pad) from their cell phone and get back a list of Mexican restaurants in Whitefish Montana with their phone numbers.

Le digo yo
photo credit: fluzo

Did you know about that? This feature isnâ??t limited to searching for restaurants. Where do you think that data comes from? A Google search, of course.

But it isnâ??t just the young adults who use the web these days.

One of the phone calls I received about websites was from a self-proclaimed â??older personâ?. She had some great feedback about what is important to make a site usable for people who arenâ??t 29 anymore. She doesnâ??t want to be ignored when she uses the web. Neither do the 18-35 or 25-55 groups.

What demographic can you afford to ignore? Most businesses canâ??t afford to ignore any of them, but there are exceptions. Not having a website is ignoring at least one, maybe more â?? especially tourists. They research what they plan to do using the internet.

Do you want to be on their radar, or not?

Categories
Competition Corporate America Entrepreneurs Management Restaurants Retail Small Business Social Media Starbucks Strategy

MyStarbucksIdea.com – A gift to every independent coffee shop and cafe owner

Regular readers of this blog have probably figured out that I’m not all that impressed with Starbucks, especially when compared to local coffee shops that get it (much less the ones that don’t burn their beans). This time, I actually have a kind word for the corporate coffee monolith.

Cup of coffee [ without edition ] photo credit: Al- Fassam [ Online! 😀 ]

The news has been full of talking heads twittering and blogging about the new Starbucks website that encourages their customers to provide ideas, feedback etc.

It’s called MyStarbucksIdea.com, and is run on SalesForce.com‘s CRM/sales platform.

If you Google around, you’ll find all sorts of bile about the stupidity of this decision, how it’s “stale”, or it’s a ploy, and so on.

While I think Starbucks has done a lot of dumb things, I think it’s one of the few smart things the coffee giant has done lately.

Encouraging your customers to provide you with ideas on how you can improve your business – anonymously (rather important).

Not only does Starbucks get some value from it by virtue of not being so close to their business that they can’t see the forest for the trees, but it great for their customers as well.

Why? Because the non-jaded among us get to feel some ownership of Starbucks via their ideas and suggestions.

You can do the very same thing tomorrow via a WordPress (or whatever) blog. For almost nothing, almost instantly. In an hour, I can have a new domain name, web hosting, a copy of WordPress with a nice looking theme in production.

What are you waiting for? Or don’t you have an hour today? Why is that?

I promised you a tip, didn’t I?

If you own a retail store, a coffee shop, a cafe, a donut shop/bakery, or any business that is even similar to Starbucks – shouldn’t you be monitoring the Starbucks idea list for ideas to implement in your shop? Likewise, shouldn’t you be watching the feedback that people give to the MyStarbucksIdeas that others suggest?

There’s just nothing like getting a free gift basket of low-hanging fruit from your biggest competitor:)

Other posts on this topic:

Starbucks “Gets” Social Marketing
Starbucks feedback is good idea
Starbucks picking up buzz from crowdsourcing
Starbucks is on the right idea

Categories
Corporate America Employees Restaurants

Outback, aka OSI Restaurant Partners, takes their hand back out of servers’ pockets

Last week, I tossed OSI Restaurant Partners on the barbie (sorry, that just had to be said) for their new policy of charging their servers for the merchant fee portion of their tips when tips are paid via credit card.

I think I was pretty clear on how bad a decision I felt this was, despite the fact that it was what they deemed yet another “extra cost” in an already tightly budgeted business. Later in the week, I updated that post after finding out that they had arrived at a change of heart.

This morning, Shannon Black from OSI posted a letter (via the blog’s contact page) from Mr Kadow (OSI EVP), which I include for your reference below.

Everyone makes mistakes, and as I noted in another post not too long ago, how you respond tells your customers something. While I think this was an exceptionally short-sighted decision from a big picture point of view, I’m glad to see that OSI/Outback reconsidered it and then decided to do the right thing.

Sure, maybe they wouldn’t have without the publicity in the news and from blogs, but they could have ignored all that and stood by their original decision. They didn’t. Publicly admitting that you goofed in today’s corporate environment isn’t easy.

Here is Mr. Kadow’s letter:

February 1, 2008

For 20 years our success has been built on the spirit and pride of our people and the excellent customer service they provide. OSI Restaurant Partners, LLC and each of our brands, Outback Steakhouse, Carrabbaâ??s Italian Grill, Bonefish Grill, Flemingâ??s Prime Steakhouse & Wine Bar, Royâ??s, Cheeseburger in Paradise, Lee Roy Selmonâ??s and Blue Coral, have been founded on and are dedicated to our Principles and Beliefs. Paramount among these is the belief that if we take care of our people and our customers, the institution of OSI will take care of itself.

It is no secret that all casual dining restaurant companies are facing unprecedented cost increases and substantial declines in profitability. It is our responsibility to adjust to this environment and take appropriate action to protect the business.

The recent decision to ask our servers to share in the cost of processing their credit card tips was made in this environment.

We did not make this decision lightly. We considered this in the context of the total package of benefits we provide our employees. After researching our competitors, we find our health insurance, vacation pay, and restaurant discount/comp policy to be significantly more generous than our competitors.

For example, we offer our hourly employees a variety of health insurance choices with premiums as low as $42.71 a month. We keep health insurance premiums for our hourly employees low by charging a disproportionately higher premium to managers and executives â?? the more you are paid, the higher your premium.

However, upon reflection, we realize this decision is inconsistent with our Principles and Beliefs. Effective immediately no server will be charged for credit card processing fees on their tips. In those areas where we have already implemented this, all credit card processing fees will be returned to the servers.

OSI will continue to fulfill its responsibility to all of its stakeholders, including our people, to operate our business at an acceptable level of profitability. But we will do this consistent with our Principles and Beliefs: we will take care of our people and our customers and the institution of OSI will take care of itself.

Joseph J. Kadow
Executive Vice President
OSI Restaurant Partners, LLC

Pass the bloomin’ onion.

Categories
Competition Marketing Restaurants

A tip for restaurant owners: Royally ticking off the customer-facing employees is a bad idea.

burger.jpg
Last week, it was reported that several restaurant chains are getting ready to charge their wait staff when a customer leaves a tip on a credit card. Specifically, they will charge the employee for the merchant fee portion of the tip.

Here’s how it works: When a restaurant takes your card to pay for your $100 meal, they pay the credit card company somewhere between $1.50 and $3.00 (a percentage, usually between 1.5% and 3%) for the ability to let you charge the meal to your card, validate the charge electronically and pay later. This amount is called a merchant fee.

It’s a good deal for the restaurant for what I hope are obvious reasons. If you add a tip to that meal, that raises the amount of the merchant fee, since the amount charged was higher than the price of the meal.

Even in states like Montana where employer tip credit is illegal, it’ll be interesting to see how this plays out.

It’s far more clear how it might impact wait staff (financially). That’ll get analyzed to death by someone, but as a business coach I’m thinking that these owners are nuts.

Clearly, this is going to tick off the wait staff in these restaurants. While the staff is obviously motivated to provide outstanding service in order to increase their tips, there are some people who might not be so motivated. That’s going to roll downhill. Some quality waiters are likely to look elsewhere for work, raising the service level at competitors’ restaurants.

The Fox News article quoted Joe Kadow, VP of OSI Restaurant Partners, who noted that “there are too many extra costs in the restaurant business”.

What is an “extra” cost? It’s either a cost or it isn’t. More importantly, it’s an easily predictable cost.

Kadow continued by noting that dinging the wait staff for the merchant fee portion of their tip is “preferable to raising prices”.

Horse hockey. Let’s look at the math.

On a $100 meal, a tip for really good service might be $18-$25.

Even if you have the worst merchant account vendor imaginable, the card-present rate on a card might be 4% on a downgraded rewards card. Believe me, that’s pushing it.

4% of $25 is .04 * 25.00 = $1.00. A more reasonable card-present transaction rate (ie: “swipe” rate) is more like 1.8-2.2%, which reduces the $1 to about 50 cents on a hundred dollar meal.

Now back to the client who just bought a $100 meal and dropped a $25 tip on the table. Think they’ll care or notice if their medium rare Ruth’s Chris New York Strip is $40.45 instead of $39.95? Or worst case, $40.95 vs $39.95.

I doubt it.

Even at Outback, where a ticket for 4 seat table is typically $40-50. A 20% tip on a $50 ticket is ten bucks. 2% of that (a reasonable merchant fee) is TWENTY cents.

Is annoying your wait staff “preferable” to a 20 cent increase on a $50 ticket? Puleeze.

Kadow closed his comments by noting that “it’s a legal option and his company is taking advantage of it.”

Not sure this is much of an advantage, Mr. Kadow, but hey, knock yourself out.

For the rest of you: Take care of your people. They take care of your clients. If you don’t get this, please give my phone number to your competitor and ask them to call me.

UPDATE (Feb 7, 2008): It has gotten back to me that the publicity of this has prompted OSI Restaurant Partners to change their tune about dinging their staff for merchant fees. I’m convinced that if it hadn’t made the news and the blog world, they’d still be moving forward on it. Thanks to HR wizard Tom McGuire for the update.