Insights for Restaurant Owners: Keeping Good Employees, Profits

 

If you, as a restaurant owner, have trouble keeping talented employees, consider insights from a report on a Sacramento, California TV station. It will also help you stay in business.

The headline, “Servers Say Groupon Leads to Smaller Tips,” on Jan. 25, 2012 is enlightening. The KXTL-TV report cites numerous comments on YCombinator.

It seems restaurant employees across the nation are unhappy about the small tips they get from customers who use discounted Groupon coupons. Groupon has about 150 million subscribers.

Consumers get coupons from Groupon for discounts. The rub is that restaurant customers are tipping on the 50 percent discounted price, not the regular menu price.

What’s worse, the article states: “The State Restaurant Association tells FOX40 that with the stressed economy, business owners are finding it hard to keep giving such big discounts.”

Indeed, the report confirms informaiton in a Biz Coach column last year: Daily Deal Sites and Pricing Principles – What’s Sustainable and What Isn’t.

The column cited research by Rice University that shows many restaurants find it impossible to be profitable by partnering with Groupon and other daily deal sites.

I wrote:

“The study caught my eye because this business portal has long maintained it’s dangerous to sell products at the cheapest price in the marketplace vis-à-vis focusing on value and customer service. (See What are the Secrets for Success from Advertising?)

“Companies that focus solely on price attract the smallest segment of consumers – 18 percent – the least-desirable customers who make buying decisions solely on price. Such consumers are not loyal. Additionally, they’re the biggest complainers and more likely to return products.”

The warning is still valid.

Listen to your employees – here’s how and why to partner with your employees. Consider eight simple strategies to give you pricing power.

From the Coach’s Corner, for business success in marketing, here are related resource links:

Fast-Food Restaurateur Shares Secrets for Success

Tips To Get Strong Results From Your Marketing Plan

Fast, Easy Ways to Create Buzz

Marketing Essentials on a Shoestring Budget 

“Incentives are not strategy, they are tactics. Defensive measures.”
-Carlos Ghosn 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?