Its What You Know, Part 3: Know Your Competition
Restaurateurs can get so wrapped up in the day-to-day running of their businesses that they fail to adequately evaluate the impact competition has on their restaurant. Knowing your competition enables you to determine why someone should patronize your establishment rather than your competitors.. It also helps you capitalize on your restaurant's strengths and improve on its weaknesses. Arm yourself with the information you learn from the following quiz to be more competitive in today's marketplace by getting to know more about your competition.
- Where are the foodservice dollars being spent in your area? (Be sure to include ALL foodservice venues: independents, supermarkets, convenience stores, quick service, fast casual, etc.) Which places are busiest?
- What is your competition's "product"? What is working for them? (Pay attention to details like menu items, quality, ambiance, service, speed, and price.)
- How does your product and package compare? What are the similarities and differences?
- What new strategies can you develop from a better understanding of your competition? Aftertaking a look at the quiz, Diana Delano of The Dockside Restaurant in Malden realized that, "these days with both parents working and everything always in a rush, wherever people can get good food, fast, and at a good price represents competition."
Bob Kershaw of Sam Diego's Mexican Cookery & Bar in Hyannis recognized his competition as supermarkets, casual theme restaurants, fast food restaurants, independents, convenience stores and quick service. Bill Brady of Sonoma Restaurant in Princeton has noticed an increase in "chain dining" for families with children 5-15 years old and a slight downturn in upscale dining. But, he added, "family dining remains steady during the week and weekends remain strong."
From getting to know his competition, Brady has discovered that "some very exclusive venues are now offering 'hidden' discounts. Like internet gift certificates and entertainment cards" to be more competitive.
Kershaw took a look at what his competition's product was and what was working for them. "Chains have name recognition and some of the independents are very competitive on atmosphere, price point, food quality and menu offerings," he said. Through his comparison to his competition, Kershaw discovered that his establishment was " very competitive as to atmosphere and price point. We stand out in the 'ethnic' market as being Mexican. And we are recognized as being a successful, long-standing independent with superior food and service."
Milt Simon, owner of Milt Simon & Associates, a sales trainer and motivational speaker at the MRA's New England Foodservice & Lodging Expo, remarked that restaurants should strive to set themselves apart. "Being different in an industry with thousands of competitors can give you an edge in attracting customers."
Brady said he has developed his market with the slogan, "You're only as good as your last meal." He actually works quite closely with the competition. "The more people we can bring into the area the better off we all are," he said.
Kershaw plans on using advertising and promotional strategies as well as utilizing human resources by attracting and keeping a good workforce through wages and employee benefits.
Delano concurs with that strategy. "We have a strong staff. That translates into efficiency," she said.
Brady said that knowing your competition helps restaurateurs to stay in tune with what the market wants and needs.
Dave Celuzza of Slattery's in Fitchburg said it best: "Restaurants get 90% of their business from a 10-mile radius and competition creates that landscape."
At a recent conference sponsored by the MRA Hospitality Institute, Jim Sullivan, CEO of Sullivision, Inc. and well-known consultant to many major foodservice operations and owner of six restaurants himself, said he calls on managers to be self-competitive. "Ask yourself, if I ran a restaurant across the street, how would I beat you?"
Shopping your competition can be an invaluable tool. Don't let your customers know more about the competition than you do!
- Develop a profile of your direct competitors. Know their strengths and weaknesses as well as your own. Then give your customers more reasons why they should buy from you rather than your competitors.
- Knowing your competition helps you know the best time, price and strategy for promoting your establishment and products.
- It will give you some fresh ideas on creating displays, advertisements and marketing your operation.
- It will help you to spot trends in your industry.
- You may learn new ways to streamline your operation and make it more profitable.
Knowing your competition will increase the likelihood that you will be better able to exceed your customers' expectations. Additional information to help you develop competitor profiles and strategies can be found at the Massachusetts Small Business Development Center Network website at www.msbdc.som.umass.edu/ and Jim Sullivan's website at www.sullivision.com.
With your increased knowledge of your competition, you should now be able to make a list of at least five action steps to take in the next few months. Knowing who your competition is and why customers might choose to dine with them will help you to be more responsive to your customers and more competitive in the marketplace.
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