Authors: Barry Gibbons
Tags: #Business & Economics, #General
So, do we prepare the obituaries in advance? Is it all over bar the shouting? Is that a fat lady I hear singing?
What baloney.
Sure, McDonald’s have issues, problems and challenges – and they might be on an unprecedented scale – but they also have unrivalled brand-equity, resources and proven skills to bring to bear. What they face is what brand management is all about – it’s wildly different in its stages of genesis, adolescence and maturity. They do not need a single revolution, but neither can they do it by just evolution – they need a bit of both. Here are my thoughts.
McD’s will disagree with all of the above, of course, and have their own better plans. Whatever. The point is, they should not only survive, but still thrive.
If you all think I’m too optimistic, I should let out a secret – I am a closet fan of McDonald’s. You see, in the early 1990s, when we were trying to bring Burger King out of a coma, McD’s fired a missile at us, hoping to make our efforts stillborn – they launched the
McRib
. We rushed out to buy one, fearing the worst. With solemn faces, the guys brought one to my table. With suitable gravitas we opened the box. It looked like something that had fallen off an old Russian space station. And you know what – it tasted like something that had fallen off an old Russian space station. They were so kind to me.
Hey, they were kind to me. I can only wish them well.
34. The enemy is inside the gates
T
he Austin Powers movie called
The Spy Who Shagged Me
had two effects on me. It amused me, as it did millions of others. It also gave me an enormous shock – or, at least, the title did.
For years, as a Brit living in America, I got away with murder in moments of stress and/or high temper. There were, you see, a few British swear words that were virtually unknown in the US – and you could let fly in company that would otherwise have been seriously offended, and raise no more than a quizzical eyebrow. ‘Shag’ was one of them, and I remember thinking at the movie’s launch that if they ever put that word in lights on the front of cinemas in the UK, my mum would start attacking people with her umbrella.
Spy movies and novels usually have another characteristic that appeals to me. When the plot finally unravels on the next-to-last page, it usually reveals that the real villain has been sitting right next to the President all along – and that he has been a lifetime friend. The enemy has actually been inside the gates. As I read (daily, it seems) about the war the quick-service industry seems to be fighting, I wonder if our real enemies might turn out to be trusted friends who are actually working for the other side.
I have my suspicions about two of our centurions. They have been with us for a long time, and done stalwart service, but they have been acting a bit suspicious recently. Like Jack Ryan, I’m beginning to have my doubts. Let me share them with you.
The first one is the
value engineer
. This is somebody who has been on our side for decades but did his really great work in the ’90s. This is the person who can provide any given effect or specification by another method or by using another material – which is always significantly cheaper. Where you used to use wood, he can source recycled tofu to give the same effect. Steel? Pah! He spits at steel. He has come across a new synthetic alloy made from used fertiliser and old cola cans, and nobody can tell the difference. Mayonnaise? Why on earth would you use the real thing when he has found a substitute product that studies have shown cannot be distinguished from the real thing by a focus group of would-be consumers who have been temporarily blinded for the occasion? It is based on bat dung that can be imported for a penny a ton from somewhere in China.
All these alternatives are cheaper by far, and the customer, he insists, will never know the difference.
He is wrong, dear reader. The consumer does know and can tell. And the consumer has seen real value eroded from our industry’s offerings on an unprecedented scale in the past fifteen years. The value engineer is part of the problem, not the solution. He is not a friend; he is an enemy.
There’s another enemy within our gates – somebody who has been with us from the start, and who we dearly love. He’s called
gross margin man
. Most quick-serves (essentially) add value by doing something to a series of products that are bought in and then retailed to a customer in a defined environment. The price you charge for such added value is the point on the graph where the industry attempts to match supply and demand, and is complex to calculate. There are an almost infinite number of ways you can do it, but to this author’s mind there’s only one way you can’t. The latter, however, just happens to be the received wisdom and prevailing practice in much of the industry – which is to take the bought-in price of each of the products that come in the back door of the restaurant and apply a required margin percentage to each one.
To many in our industry, the individual product gross margin is sacrosanct. It is the one figure that cannot be changed – whatever the circumstances. If sales are soft, there are numerous tactics that can be employed to combat the problem: cut the staffing levels, don’t clean the place so often, avoid those irksome maintenance charges, push back the repaint for a year or two, delay investment in that new payroll or till or inventory management system, cut the local advertising, etc., etc. – any or all of those should do it –
but don’t question the gross margin percentage
on individual products. Hey, we got 75% in 1975, and that’s what the system was built on. Some things can’t be questioned; can’t be changed.
This guy might just be a bigger threat than value engineer man. My advice would be to be safe. This is a spy movie, right? It’s a thriller – PG-15 sort of thing, right? Well, I’d take them outside on to the White House lawn and kill them both, albeit with a silencer.
There may be others – folk actually inside our establishment working against us. I’ve got my suspicions about
guaranteed return man
and
pay minimum wage at all times man
. You may have your own ideas, but we must fight back quietly for a while, because if they begin to get suspicious that their cover has been blown, our lives will be in danger.
If my magazine column is missing next month, you should fear the worst. But you should carry on the fight.
35. First impressions
W
hen you reach a certain age – notably mine – you can allow yourself the luxury of looking backwards and regretting: the chances you missed, people you upset, things you wish you had done differently. You can even admit to little personal failings – aspects of your character that, if you had your time again and the benefit of hindsight, you would try to change. In my case, there is one (
Only one?
– Ed.) that has blighted my tramp through life’s minefield – I have always been over-governed by first impressions.
My wife has been far more flexible. At our first meeting, at a dance at Liverpool University Students Union in the mid-sixties, she decided there and then that I was either (a) okay or (b) a complete plonker. Approaching forty years later she still hasn’t firmed up her view.
I am terrible at this with people. Within seconds of a first meeting – whether it be as unimportant as the lightest social occasion or as important as interviewing somebody for something that might change their life – I make a value judgement about them, and it takes dynamite to blow me away from that position in the future.
It’s the same for me with everything, from countries to music, from books to clothes. In February 1963, I was in the Oasis nightclub in Manchester, England. An unknown rock band were setting up their equipment, but I was far more interested in the girls present. Then somebody called John Lennon hit the first notes of
Twist and Shout
and took the roof off the nightclub. Shortly afterwards, he and his three colleagues were to take the roof off the world. That first impression changed my life.
There are those that think the famous book opening ‘Call me Ishmael’ is the greatest literary first impression ever. Drivel. Consider this opening sentence from the immortal P. G. Wodehouse:
‘At the open window of the great library of Blandings Castle, drooping like a wet sock, as was his habit when he had nothing to prop his spine against, the Earl of Emsworth, that amiable and boneheaded peer, stood gazing out over his domain.’
When you read that, you are hooked. You know what’s ahead will be worth its weight in gold.
It’s the same with restaurants, including quick-serves.
When you walk through the door of any restaurant, all your senses are on red alert. You are open to any assault of smell, sight, sound, touch, or feel. It is likely that, in the first minutes (maybe seconds) of any visit, one or two of your appropriate senses will register such an assault and it will shape your views about the place. Those views might be positive or negative. They might be nutritional or corrosive, and they might not just last for this visit, but shape a lifetime’s attitude. They might not just relate to that single location but might also shape a view about other locations if they exist under the same banner. A whole brand positioning might be affected – all in a few seconds.
It is an enormous opportunity for the enlightened operator. It is in your hands – the ability to affect a fundamental customer attitude to your restaurant, using largely natural (and free) materials, simply by picking a target sense and deliberately trying to affect it positively within ten seconds of somebody – anybody – coming through the door.
But there are pitfalls. Some senses are more easily affected in a positive way than others. Some are hard to affect positively at all, but easy to affect negatively. These I call
dirty window
senses – they respond negatively to things that are bad (dirty windows) but you don’t notice them if they are good (clean windows). If your restaurant tables and the floor areas beneath are left cluttered and dirty, it’s a huge and early strike against the place for many customers. If it’s all clean, it’s like a clean window – that’s how it should be. Nobody notices.
It is possible, however, to make a strong positive impact within the same timescale. Simple things, like using a customer’s first name, can do far more to increase customer frequency and loyalty than discounting and ‘two-fers’ ever can. And don’t believe it can’t work for you in a big branded outlet. In one study we did in England, one member of a counter staff remembered 400 customer names!
I’m kinda odd (would you believe?). I’m particularly open to being impressed by the first sounds of a place when I open the door. Does it sound friendly, busy, welcoming? Obviously, however, the main sense that can be assaulted positively for most people is that of sight. What do you see when you open the doors? That might be a welcoming ‘meet, seat and greeter’, but, if not, you need to monitor what’s in the sight line from the door and put something powerfully good in there.
That’s the trick. Look at your place. Go outside and walk back in. Pick one sense and have a brainstorming session with your team. What can you do to assault that chosen sense positively in the first ten seconds? It might just be obvious and it might just be cheap. Get it right and it will be highly effective.
As I said, first impressions are critically important to me. I can’t wait to see
Basic Instinct II
.
36. Love thine enemy
I
n an unnerving moment at the end of the 1980s, Mikhail Gorbachev’s smiling spokesman, Gennadi Gerasimov, taunted the West with the words, ‘We have done the most terrible thing to you that we could possibly have done. We have deprived you of your enemy.’
What rubbish. We have managed to substitute a perfectly adequate new common enemy – and I do not refer to terrorism, the non-Christian world, SARS, AIDS, or any of those lesser ones. I refer, of course, to France.