There is a saying often heard that relates to many acquisitions in life. Perhaps it is most relevant when referencing the purchase of a product, item or service. That saying is “Poor man pays twice”.
When I hear these words, it immediately brings to mind another adage that says “Good is not Cheap, and Cheap is not Good”. If you believe these two statements are logically equivalent then keep reading.
So where does this all fit within the Hospitality sector, and perhaps most importantly, how does it relate to your cafe business? Maximize sales profits, by giving great value to your customers.
Within Hospitality, you know that when booking a hotel, that there are star ratings for the accommodation you seek, like 5-star, 4-star and so on. Knowing this, you automatically have a sense of comfort in mind based on your required star rating, that allows for you to feel confident in your booking. Naturally there is also an expectation in other areas related to your chosen hotel booking. This expectation extends to service, equipment, staffing, and dining options.
The above saying “Good is not Cheap, and Cheap is not Good”, I believe it is a concept found within four key areas of your cafe business as well. We will address those briefly and individually below.
Please note, I am not stereotyping any particular style, or how your cafe should be set up. However, I guess I am wanting you to view your business from the outside, and give particular thought to these following areas. When reading this article keep top of mind this thought, “Where are you placing your business in the market”, just like a hotel brand would do?
Service for sales profit maximisation
All cafes are not the same, and they all have varying degrees of service. You can be a sit-down full-service type cafe, or an order at the counter – seat yourself cafe, or a takeaway cafe. As a customer you would be aware that each style cafe would offer different service, which means the menu pricing would also be different just like a hotel.
Each style of service would also have a degree of customer satisfaction expected. However, if you excel in your service in either of these options, you would ultimately enhance the overall guest experience. You can provide exceptional service in either category, as each will have a suited structure as a basis. Work on that structure, and aim to improve on it regularly.
So, no matter what style service you provide your aim is to provide great service which is not cheap and avoid being too cheap that the service is not good. Also be mindful of the consequences of cost-cutting measures on the quality of service, especially during quiet periods. Maximize those quiet times for staff skill training, prepping, and getting to know your staff and their ambitions.
Take time to review your service flow for the customer. Keep improving and your customer will keep returning. Believe that exceptional service can differentiate a business from its competitors and contribute to customer loyalty, no matter what type/style service you offer.
Equipment – investing in quality
This section is perhaps the first thing we think of with the above, headline statement.
There is a multitude of equipment out there that can do a variety of tasks, to varying levels of quality, and they are probably priced as such. Be mindful that sometimes the most expensive equipment may not be the best for the job, and that the cheapest may cost you more.
Equipment considerations may benefit labor savings, or it may be something you want, to enhance your offerings, like Juicers, Toasting machines, Grinders, and POS systems. The list would be quite exhaustive to compile here for this post but you understand where I am going. There should be a return-on-investment calculation completed for any equipment purchases made.
Equipment reliability
There is a big priority on the reliability and quality of equipment. Sometimes it is not until we experience a problem with a piece of equipment that we realize how important it is on the service, and its reliability towards operations. Continual equipment problems are costing you more than downtime.
However, in all fairness the purchase of a quality piece of equipment will not be as efficient, if there are untrained people using it. I believe it is extremely important that staff are trained on equipment and are fully aware of its capabilities. This will help to maximize the quality of use and enhance operational efficiency, which automatically reverts to guest experiences as well.
Take a moment to think of the impact of using old, outdated and cheap equipment versus upgrading. As a cafe owner you need to realize the additional impact on work flow and customer service. In part of that time/motion analysis, realize the long-term cost savings associated with buying, or should I say investing in good equipment. Do you have a backup plan for any failure of your equipment right now?
Staff and customer relations
I have had firsthand experience in this area when it came to good skilled staff, and the costly unskilled staff. Believing one is worth more than the other in so many ways, but at the end of the day being realistic towards your operation and style is a necessity as well.
I also personally believe, that in business a person should be paid what they are worth. We have our roles and guidelines, employment awards, that set a basis for our staff remuneration. There is general consensus that there are people, who if part of your team, can either lift your business or bring it down. This I experienced with two different cafes.
Better skilled employees, combined with an efficient flow of systems, means you can manage your business with less employees, and experience less staff turnover. Ultimately lowering your labor and food costs simultaneously. The right team in place will also increase your sales volume, based directly from guest satisfaction.
The reverse is true for paying less skilled staff at a lower rate, where you may experience costs from increased food waste, theft, and returned food from guests. There may also be customer complaints, lack of staff motivation and dedication to the team. You may also end up having to buy additional equipment so people with little skill can do a better job.
Skilled Staff
A skilled worker, be it a Chef or Barista, or even Cashier or Waitperson, is worth more to you full stop. They will also care for your business, your customers, and your business growth. These skilled workers are satisfied talented staff that want no BS or unnecessary pressure within the work environment. Their skills exemplify attention to detail, speed and efficiency, whilst maintaining pride in their work. They enjoy customer feedback and reviews, a healthy work environment, and working alongside other talented people.
In summary, skilled staff, are proud of where they work, and know that they are appreciated. Everyone wants to be part of a team and remunerated appropriately for their skill level.
If the going rate is $30 per hour for a staff member, and through customer/staff feedback, you believe they are worth more to your business, then offer a little more. You always want to retain the great staff as they are part of your product offering to those returning guests. Just think back again to booking that 5-star hotel, where you do not mind paying extra as a customer, if the service is great.
Produce – increasing sales through value
Having quality products to work with, will enhance your offerings exponentially. After all this is the reason why your customer is coming back in the first place. Serving poor tasting food and drink items on the cheap will not have your customers banging down the front door, but then you are not a five-star restaurant either.
There is a balance to be found in the products you buy for your establishment. Buying cheap or substandard food products may result in a lack of flavor or taste, and also the desired shelf life.
Coffee beans would be a good example where the quality of the bean and roasting process determines the quality of coffee that your Barista can produce. In all fairness your Barista may be great at pumping out luscious lattes, but if all they have to use is cheap inferior products, then they are not a magician. They same could be said about your Chef or cook, so give them quality products to start with, and once again your customers will be rewarded.
Your customers are looking for satisfaction and enjoyment from your offerings of food and beverage items. They know the difference between a freshly squeezed juice, and one that came one off the shelf, poured from a labelled-two litre bottle. Good products contribute in part to your guest’s satisfaction, approval, and loyalty.
In my last cafe, cooked breakfasts were popular for in house customers, and the good old favorite bacon and egg toasties for those on a tight schedule, or on the run. We had a few suppliers approach us wanting to sell us their brand of bacon, as they knew bacon was a high usage in cafes.
High usage produce v customer satisfaction
The bacon brand we were currently using was not as cheap as those being offered to us. From a price point these cheaper products could have saved us thousands of dollars over the year on bacon purchases. However, we stayed with the brand we had as our customers said it was the best in flavor when compared with the samples, we offered them.
Consider what the cost would have been in lost sales if we changed the bacon, and what it would have taken to get those customers back that went elsewhere for breakfast. A fifty-cent saving on a kilogram of bacon may have returned substantial savings, however those savings could 10X the loss in future revenues from customers who moved on as well.
The feedback and approval from your customers are paramount here. This thought should be on your mind with every decision you make in your cafe, and in particular produce.
So, there you have my thoughts on your cafe business when it comes to “Good is not Cheap, and Cheap is not Good”. Keep this saying in mind when you next have to make a decision concerning your business and its operations. Think of the repercussions of any decision no matter how complex, as it is certainly significant within the hospitality industry.
I encourage you no matter, what part of the business you are concentrating on, to prioritize the thought of quality over cost.
So, you can see from above, these four key areas within your cafe, when combined together, provide the ultimate in portraying what your cafe stands for in quality and service. Although I have listed them separately to explain the effects of each, you need to work on them collectively as they complement each other in all aspects of customer satisfaction.
Summary
My final thoughts on investing in excellence with your service, equipment, staff and produce, is that the ultimate winner is your customer who will keep returning.
When you have satisfied repeat customers your profitability can increase, as you can charge more for all those touch points because “Good is not Cheap”. Maximize sales profits, by giving great value to your customer, from your decisions toward Service, Equipment, Staff and Produce.
I am not saying you need to change everything today. Create yourself a plan and be mindful when making those future decisions, because ultimately this is how your customers and your business benefit going forward.