Restaurant Management:
Choosing the Right Customer

There is an excellent story about customer development from the famous Nordstrom's Department Store. (I must admit, I personally do not know if it is true or not. However, there are so many accounts of utterly outstanding customer service from this company that there must be SOME truth to most of them.)

A woman bought a pair of shoes at a competitor’s store and took them home. She discovered they were too small and decided to take them back. However, she found herself near a Nordstrom's and decided to take the shoes into the store with her, to see if the department store had the exact same style, but in her preferred size. Her plan was to buy the new shoes at Nordstrom's, then return the other shoes to the original store.

The sales clerk found the style and the correct size and fitted the customer. When the customer attempted to pay for the shoes, the clerk said, "Just give me the other pair and I will exchange it for the new ones." "But I didn’t buy these shoes here," said the customer. "I understand that," said the sales clerk, "but, I don’t want to give you an excuse to go back into that store. I will take them in exchange here, and then we may be able to keep you as a customer." Obviously, the sales clerk had identified a good customer. Have you identified your best customers? Are you giving them an excuse to spend their money somewhere else?

You do not want EVERYONE to be your customer. I know this may come as a shock to some of my readers. "What do you MEAN?" you may be thinking. "I want ANYONE who is willing to pay my price to be my customer. I can never have enough customers!"

Well, you may be right about never having enough customers. However, there are some people who are not right for your business. You do not want them as customers or clients, because they will cost you money in the long run. You want only the very best customers for your particular service or product.

Who Is the Right Customer?

The right customer is one that you can satisfy. He or she is the person who is going to give you money, and do it gladly. This is someone with a problem that you can solve. And, the right customer is the person who is so happy when you solve their problems that they will run out and tell other people, people just like them, that you can solve THEIR problems too.

You want customers with the following characteristics:

1. The customer has a problem. Remember, you are a problem-solver-for-hire. Your ideal customer NEEDS something, and KNOWS they need something. Look for people who have a problem, solve their problem, and charge them for it.
2. The customer wants you to stay in business - Your customers, that is, your GOOD customers, want you to make money. They NEED you to make money. If you are solving their problems, the last thing they want is for you to go out of business. Relax. These people are willing to pay you.
3. They are willing to spend - The best customers are those who have the money, and are willing to spend it right now. They will spend more than the average person does for your type of business. They will not complain about the price, nor will they worry about your profit margin. This is a great customer.
4. The customer is loyal - I once heard a salesman say that his favorite prospect was one who would only buy from the competition. The salesman admired the customer's loyalty. So, he would do EVERYTHING possible to win that customer over. He would try to get a SMALL piece of their business first, and after establishing a relationship, he would try to get a little more. He knew that a loyal customer was a valuable customer. He wanted them to be loyal to HIM.
5. They are frequent buyers - Your best customers will buy your product or service more frequently, and for different uses. For example, a restaurant client may bring business partners to lunch for a sales talk, his spouse in for a romantic dinner, and his friends in for birthday celebrations. He is a good customer, because he uses the service more than the average person.
6. This person is willing to spend more - They have no problem giving you more money. Just show them how to spend it! They are in your place of business because you are good at solving their problems.

Identify the right customers. Invite them to spend time with you. The more time they are exposed to your products and services, the more time they have to spend money - and the less time they will have to spend it with your competitors.

The Opportunity to Spend

Are your customers or clients getting every opportunity to spend their money? I was a consultant for a riverboat in New Orleans. It was a really terrific experience. We would cruise the Mississippi, watching the scenery on both land and water. The captain would point out areas of interest, such as the famous battlefields, Jackson Square, and even passing ships. But the travelers who sailed with us were not given enough opportunity, or information, to spend their money!

The "Texas Bar" on the riverboat was a great example. Did you know that the third deck on a steamboat is traditionally called the "Texas Deck"? If you didn’t, you may have been one of our customers - they didn’t know it either. And besides being a great bit of trivia to know, it also would have been an excellent clue as to the LOCATION OF THE "TEXAS BAR"! But since our customers were not given this information, the "Texas Bar" was vastly underutilized, even on busy cruises.

Our customers would sit on the second deck, (the one they entered on), enjoying the sights. They could have been enjoying a cool beverage upstairs, instead! We would have made more money, and they would have purchased even more vacation memories.

One of the simple tactics for making more money is to give your customers the opportunity to spend more money! They have money. You just have to show them where to put it! Remember, YOU are the expert. If they could have stayed home and solved their problems, they would not have needed you in the first place. They came to you saying, "We have a problem. We NEED something that you have. We have money, and we want to trade it for something more valuable to us. Can you help us? Can you please take our money and solve our problems?"

Customers do not want to hear that you can only do SOME things for them. They want you to do EVERYTHING for them. You are the expert. You can do things they cannot do alone. Use your expertise to give them everything they want. Then, charge them for it!

I am constantly amazed at how DIFFICULT it can be to spend money. One Christmas, I was in a department store, trying to spend money. It was the 23^rd of December, and I was in a mood to spend! There was an outfit on display that seemed perfect for my wife. Looking around, I spotted two sales clerks talking to each other at the cash register. They did their very best to ignore me. Even my waving and looking forlorn didn't work! They simply would not stop their conversation to give assistance.

So, I started shouting for help. "Help me, Help, Help, Help!" I shouted. That got their attention, (and the attention of quite a few other people as well.) They came rushing over and asked "What is it? What is wrong?"

"I need help with that outfit. How much is it?"

It took them a second to catch on. They were quite upset. They were angry because I had shouted for help. Yet, that was why I was in the store in the first place.

Another example: My father owned a real estate agency with a fair number of sales associates, but no designated receptionist. When the phone would ring, he often had to answer it, because no one else would pick it up. His sales staff told him that the calls usually did not lead anywhere. He was astonished, (and he changed a few sales people)! So what if most of the calls did not lead to sales. If SOME of the calls brought in business, why wouldn’t someone want them?

Take every opportunity to take your customer's money. Give them something of value, of course. But don’t overlook the second purchase, the extra service, or the new product. If you need a lesson in this area, think of the fast food restaurants that have made MILLIONS by asking each customer, "Would you like fries with that?" Wouldn’t you like to have an extra nickel from each order of fries McDonald's sells?

Customer Satisfaction and Profits

Remember, this chapter is about finding the right customer, who has the characteristics we discussed earlier. The right customer is also one who is compatible with the type and level of service and quality you offer. This will be reflected in your price, of course. If you have an inexpensive product or service, you will attract and appeal to a certain type of customer. If you offer luxury and status, quite another type of person will make up the core of your business. You must create the strategies necessary to attract, and hold, qualified customers.

Don’t ever fall into the trap of believing that making money is the opposite of satisfying customers. It is the exact same thing! If you want to make money, you MUST satisfy your customers!

And while we're on the subject of satisfying customers - which is easier - creating great customers from prospects, or creating great customers from good customers? I bet the second one is easier. You see - it is far easier to make a great customer of someone already familiar with the things you do best. If someone is currently your customer, you are already satisfying that person. Now, try to find some more things your customer would like.

The Price Dilemma

Are you afraid, or at least intimidated, by the prospect of asking people for money? This is a problem in our modern, corporate culture. As we create more and more layers of bureaucracy, we move further and further from the source of our profits - the customer. And, since most of us are trained to be "consumers" rather than "producers", we are unable to ask people for money. Let me give you a personal example.

A colleague and I were meeting with some prospective consulting clients. The man who owned the business had a lot of money, knew he had a problem, and wanted to hire someone else to fix it for him. This was a consultant’s dream! Most of the time, our clients either do not have enough money, or do not know they have a problem. Even if they have the first two, they simply don’t want to hire someone to fix it for them. Instead, they try to do it themselves.

Back to our story. This guy really wanted to hire us. He wanted us to sign a contract and get started. However, my partner, who was senior to me at the time, did not ask for the business. Instead, he kept talking, telling the client how much better he would feel once he hired us to work on the project. It was almost too much for me to bear. I finally asked my partner to step outside with me. When we did, I said, "Stop talking and take this guy’s money! He doesn’t want to hear any thing more about his problems. All he wants to hear is that we going to start solving them for him RIGHT NOW!"

We went back to the table and asked for a large deposit. The man was so relieved that it almost made me cry. However, when we got the check, which he wrote IMMEDIATELY, it made me want to dance and sing instead.

I hope you read this chapter carefully. It is really the most important part of this entire book. Once you understand that you are making money because you are doing something good for people, the whole game becomes a lot easier.

Trading Value for Value

Your customers have something. They have money. You want their money. But you knew that. And you have something your customers want. THEY WANT IT MORE THAN THE MONEY THEY HAVE!

Wow, read that again. They want what you have more than the money they have. That is it. Pack up your bags and go home, you do not need any more information. This is all there is to know. (Of course, the rest of the book contains specific suggestions for getting that money!)

You, as an expert, are adding value for your customers. You have trained, worked, planned, and organized all the resources necessary to make your customers happy. This has great value to them. And, they want to give you their money so your will transfer this value to them. They want what you have.

Unfortunately, they sometimes do not know what you have, or at least, they do not know ALL the things you have to offer them. So, you must tell them, or better yet, show them. We will talk about this some more in the next chapter. Suffice it to say that your job is to make sure that the customer knows EXACTLY what you can do for them.

Gathering Information

The key to discovering what your customers need, filling their needs, and charging them for it, is to first know as much as you can about your customers. Who are they? Where do they live? How much can they spend? What are their problems? This information is vital to offering products and services to meet their needs. But where do you find this information? How can you get it?

Here is a clue. You already have much of this information! It is in your business records. Simply begin to gather the extra data you need by looking at what you already have.

A casino hotel in Las Vegas had a gigantic Western-style clothing outlet attached to it. They had A LOT of customers, but didn’t know much about them. We suggested a simple survey form for gathering some more information. The form only had four questions on it. They were:

1. Male or female (Don’t worry, we didn't actually ASK this question. We used our observations.)
2. What state, or foreign country are you from?
3. If from out of town, what hotel are you staying in?
4. What time of day are you shopping? (Again, this was our observation.)

We put these books of questionnaires at the cash registers, spreading them out over weekends, weekdays and different times of day. In about two weeks, we had a LOT of information about the customers. We combined this with reports from the credit card companies, who told us what the average card holder was spending on retail clothing in our area. It was the start of a great database.

How about your business? What do you know about your customers? Are they returning to your business and remaining loyal? Do they use your products and services frequently or infrequently? What do they really want?

Do You Have a Friend?

Who are your best potential customers? They are probably very similar to your best customers right now. Go find some more of them! Study your current, best customers, find out where they are from and how they found out about your company. Then go find some more people just like them.

Rewarding Customers

I live by some very strict business rules. They involve honesty, caring, determination and persistence. Yet, the most important rule of all is one I call "Bill’s Rule". Bill’s rule is this: People will not consistently do something for you unless you can show them what is in it for them . Does that make sense?

Your customers want to know what is in it for them. Don’t wait for them to discover it on their own. Tell them. Show them how you are rewarding them for their loyalty and their good taste! Give them something, and tell them you are giving it to them. This will increase their loyalty even more.

Everyone wants to feel special and appreciated. So, give your great customers something extra. It doesn’t have to be expensive, just SOMETHING that shows you appreciate their business. Don’t give them discounts. Give them an opportunity to satisfy more of their needs by purchasing more from you. Now there is a great philosophy.

Airlines have long used the frequent flyer programs to reward their customers. Do these programs save the flyers money? Maybe, but, that is not why the customers are using those programs. They want to fly MORE. And do they fly alone? Not usually. No, they take friends and family with them. In fact, they fly more than they would have flown if they did not have the program. This, in turn, means more business for the airlines.

Some people trade their frequent flyer points in for a first class upgrade. Others use them to buy companion tickets. Some, but not many, use them for free business travel. But those are the exceptions. And, of course, the use of the frequent flyer tickets is so restricted that it is almost IMPOSSIBLE to use them for business travel.

So what have the airlines done? They have created loyalty by giving a reward. The reward they give is not costly, because the person who earns the mileage, usually a business traveler, cannot use the tickets for traditional business travel. So, people take vacations with it, traveling on off-peak hours and days. But, don’t ask one of these travelers to give up their frequent flyer miles. "This is one of the few benefits of BEING a business traveler" they will tell you - they LOVE those free miles. So do the airlines.

How can you reward your best customers? Remember that they don’t want a discount. They want a reward! Why not reward them by giving them an opportunity to buy more?

Money-Making Strategy #2 - Finding The Best Customers For Your Restaurant

Carefully describe your best customer. What is it about that person that makes them so valuable to you? What does your restaurant do that gives this customer such great satisfaction? In other words, what value do you give them, and what value do they give you?

Now, how can you reward that person so they will remain loyal? Don’t even think about giving them a discount! Remember - your reward should give them more opportunities to spend money. Maybe you can create a special menu or seating area for them. Perhaps they should have priority on reservations. Be creative!

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