An often overlooked aspect of running a successful foodservice business is the organization's ability to retain its existing customers in addition to pursuing new ones.
As the leaders of many foodservice companies continue to look for ways to enhance the profitability of their business, they may be overlooking one of the more straightforward opportunities: customer retention. That was one key message made by Craig Twombly of Priority Learning, during his presentation at the the Spring Conference hosted by the Commercial Food Equipment Service Association.
"Businesses don't address the customer defection issue," Twombly said. In fact, he pointed out that five percent reduction in customer deflections can result in a 20 percent to 80 percent increase in profits for an organization. "It costs five to six times more to get a new customer then it does to keep an existing one."
One of the simplest ways to help stave off customer erosion is through enhanced customer service. Sixty eight percent of customers will leave one supplier for another because of what they perceive to be poor employee attitudes, Twombly said. "We live in a society that looks for problems and we spend a lot of time searching for them," he added. "And the leaders of foodservice organizations are dealing with these problems every day."
And if a foodservice organization becomes too focused on dealing with customer problems it can deter from the business' ability to focus on its original mission. "The organization really becomes focused on addressing challenges," Twombly said.
To help avoid falling into this trap, Twombly said it is important to ensure that foodservice company's front line personnel are positioned to provide the best possible customer service. "Restaurants can serve the best products in the world but getting people to properly execute is one of the biggest challenges they have," he said. "People really are the tricky part of the equation."
In looking for opportunities to enhance the way frontline personnel serve customers, Twombly, suggested approaching it using what he calls "The Four Ds."
- Discover: Focus on what your company has done well in the past and is doing well today.
- Dream: Challenge the status quo by envisioning ways to add more value to customer interactions.
- Design: Create the social architecture through provocative proposition.
- Deliver: Drive sustainable results by nurturing a collective sense of destiny.
"How do you make this work?" Twombly asked the CFESA members in attendance. "It needs to be a priority and you have to make a commitment to follow through. And when you sit down, the employees need to be involved. The process has to be collaborative. This approach is not about how you can make your people feel better. Rather, it is about serving your customers better.
Gathering employee feedback is a key element of Twombly's process because these frontline individuals provide important information about what occurs at the transaction level. "Employees inside the organization hold the building blocks to great customer service," Twombly added. "It does not cost much to get your employees involved but it is not easy to manage."