Dr. Mitchell

Food & Beverage

A Tale of Two Cultures: How a different mindset will lift food & beverage

By Brian Mitchell, Principal, Mitchell Performance Systems

Co-authored by Evan Mitchell, Senior Consultant, Mitchell Performance Systems

** This is the first article in a series on improving revenue and profits from F&B

Hotel Food and Beverage is unquestionably a sales-based business. But can it really claim to have a sales-based culture?

In the summer of 1998 the Gillette Company was preparing to hit the button on the most expensive new product launch in FMCG history to that time. It was a product shrouded in secrecy. Through the years of its conception, design and production, what was to be the revolutionary Mach 3 razor went by the code name ER-226. It's said that even Warren Buffett, a major Gillette shareholder, was kept in the dark.

We were consulting to the company's sales divisions at the time and were given the task of translating consumer benefits - the product characteristics that had driven the four year design - into retailer benefits. These would provide the sales ammunition the account and category managers needed for their presentations to retailers on launch. There were clearly established strategies for Mach 3, and other supporting products in the Men's Grooming category, aimed at ensuring immediate market penetration and brand take-off. This was orchestrated to happen in multiple ways via impulse sales, add-on sales, trade-up sales, and solution selling. Each had their own sales messages for consumers - and for retailers. Despite plenty of skepticism in the press and the market generally about the price and product complexity of Mach 3, the launch exceeded even Gillette's optimistic expectations. Inside six months it was market leader in both North America and Europe.

The meticulous approach taken by Gillette on Mach 3 is typical of major fast moving consumer goods companies in most regions of the world. These are sales-based organizations with a strong sales culture. They recognize the need to adopt a scientific approach to the sales process. And while such sales classifications as impulse, and add-on, and trade-up, and even solution selling, have become somewhat passé in FMCG these days, that's because they are truisms that are universally accepted, not because they have ceased to matter.

Switch across the commercial world to the hotel industry - in particular full-service hotels and their restaurant operations. Let's compare the sales culture here with what we've seen above. How common is it for front of house staff to have clearly defined sales goals, and a clear plan for achieving them? Do their managers see sales management as an automatic core responsibility, or does it take second place, or worse, to other activities? Does senior management oversee an F&B operation with realistically challenging sales (as distinct from profit) targets, and carefully planned tactics for achieving them?

Or are these comparisons just a misreading of the essential role of F&B - to provide customers with a superb and memorable dining experience?

This last question goes to the heart of the issue, as it provides justification for a view that service trumps sales in hotel restaurants. But as long as this mindset prevails, F&B departments are doomed to underperform on their sales potential.

Returning to FMCG for a moment. Given the close and necessarily long term relationships between consumer products suppliers and their retailer clients, it's illogical to think that service in that industry is not recognized as a priority. Where it differs from F&B is that front line sales staff and management do not view service and sales as separate, or even as different sides of the one coin. Instead, like their retail customers, they see them as two elements in an integrated process.

Could that mindset, and its accompanying incremental sales strategies, work in F&B? Well first let's establish what we mean by an incremental sale.

Incremental sales

Put simply, it's those sales over and above what the customer (in this case the diner) would have committed to without the intervention of a salesperson. While diners don't arrive with a shopping list, they do come to dine with an explicit or implicit sense of intended purchase expense and quantity. The challenge in restaurants is to build incremental sales in a way that enhances the overall dining experience and the diner's sense of service received. A challenge? Yes - but a simple one. It doesn't require expertise in selling to accomplish - merely competent front of house staff with the right sales focus. Backed by management expectations.

A couple arrives, announces it's their anniversary, and orders two glasses of champagne. The waiter takes away the order. All well and good, but that's no one's sale - and the service impression would be neutral at best.

Different scenario. A couple turns up, announces it's their anniversary and says nothing more. The waiter asks "How would you like to celebrate with a glass of champagne?" That's selling and service. Difficult? Hardly. So why are such responses the exception rather than the rule? (A waiter with a firmer grasp of sales would, if there was still no response from possibly expense-sensitive diners, add "this is our French by the glass, and we also have a local sparkling that's delicious…" That would be recognizing the power of the alternative close. A step up in difficulty, but well short of sophisticated selling.)

Now that we have our ground rules, let's look at incremental sales techniques and their place in F&B - beginning with:

Impulse sales

In FMCG, impulse sales are largely placement driven - confectionary at the checkout is an easily recognized example. In a restaurant on the other hand these kinds of sales are timing and opportunity driven. They involve emotional, not rational, decisions. They play to sensual wants that can be uncovered simply. Take dessert wines - just one of a number we term the "black holes" in F&B, because they're universally done badly and sacrifice sales (a point consistently made by observant wine writers throughout the world). Here the move from hidden need to impulse sale is achieved by simple suggestion. And by "simple suggestion" we don't mean simply listing dessert wines on the dessert menu, a practice that seems to be seen as sufficient in the majority of establishments. It requires a little more thought than that and a touch more technique from the floor staff. It's still not rocket science - just knowing when to raise the question, and who to ask. The timing can be easily taught; the judgment should come with the job.

The same comfort and naughtiness appeal that confectionary has on a gondola end or at checkout, is achieved by the suggestion of dessert wine. It can be a half bottle to a table or a single glass. Sometimes it can be an accompaniment to dessert, sometimes a substitute - playing to the individual not having dessert. The range of options makes it easier for staff, not more difficult. Could any front of house individual do this if they had to - if you held a gun to their head? Of course they could. Will they do it of their own volition, without management direction? Only those who delight in their own professionalism - and it's fair to say, they are the few.

So what are we saying here: that it's management's fault that all staff are not impulse-selling at every opportunity? That's one point of view. But a fairer one would more blame the industry, which is slave to a history and tradition of service first. That's understandable, laudable even. However the ultimate arbiter of service in any industry is the customer. And our argument is that selling and service in F&B are not in opposition, but rather nicely complement one another. When floor staff utilize the right techniques, the diner's perception of service rises in line with their table spend.

After-dinner fine spirits, fortifieds, and liqueurs - in decades of dining all over the world, we can count on one hand the number of times we've actually been asked whether we'd care to finish with a "Cognac or Armagnac, perhaps a Calvados, or a single malt…" Another black hole. And listing these beverages at the back of the wine list is no replacement for a competent (merely competent) waiter's power of suggestion.

Trade-up sales

These require a slightly higher level of beverage knowledge, but can you really sit back and let the top end of the wine list sell itself? It won't. The fine line to tread here is between introducing the diner to a wine they're grateful you intervened to suggest - and what's often perceived as sommelier-gouging, which can secure that purchase but kill all future business.

Trade-up sales represent a slight move up the skill scale, though still at the low end. It requires qualifying the customer - establishing their preferences in style, quality and (most sensitively) price. This is not the systematic qualifying process of big ticket selling. In F&B for the most part it can be done "on the run" by a competent waiter instructed appropriately. There is a value to higher priced wines (and beverages in general) and this value must be reinforced explicitly to the customer. The promise of additional pleasure will often override price. But as with any incremental sale it requires intervention by the waiter - ideally not via tongue-twisting tasting notes (which frequently confuse floor staff) but simple, effective descriptions we call "wine bites".

Add-on sales

Here we're not talking the "would you like fries with that" clichés, or the dreaded "up-selling" notion with its built-in customer unfriendly connotation. There are abundant opportunities in restaurant situations to secure add-on sales and to position these firmly in the customer's perception as additional service - "up-servicing" if you like. More to the point, the value of the add-on sale in F&B is substantially greater than in other industries. It can open up the entire table, rather than just one individual, to the prospect of further purchases.

A bottle of wine is empty as a table is finishing their main courses. The waiter asks if they'd like another and takes one person's "no" as absolute. If they instead play to the individual (and there's invariably one) who looks undecided, chances are they don't just secure a single glass for that diner, but a couple of glasses, or even reconsideration and a further bottle purchase. Add-on sales in F&B complement successful impulse selling. Secure a couple of glasses of dessert wine and it's likely than anyone abstaining may be doing so because they don't like dessert wine. But if offered a fine spirit they may well happily accept, rather than sit without a beverage while others at the table indulge.

Add-on selling is the introductory level of the phenomenon known as:

Solution selling

It's not surprising that Solution Selling became an FMCG industry rage. It explicitly bound sales and service into a singly inextricable entity. It also cast the salesperson in the flattering light of being a solution provider, and this positioning automatically refocuses the customer on the value rather that the cost of a product. Gillette "owned" the Male Grooming category because they provided a beginning-to-end grooming solution - a suite of products so comprehensive that the morning shower and shave ritual became a total Gillette experience.

How can wait staff provide solutions that increase incremental sales? The most obvious way - in those hotels and resorts with high end fine dining restaurants - is to secure sale of degustation wine matching and flights of wine. In less rarefied dining environments, however, there is still enormous scope for a solution selling approach. The ability to qualify customers' expectations and wants is essential, but not difficult to achieve. It's a core aspect of diner psychology that people come out to dine wanting to put themselves in the hands of professional staff. Giving that impression of professionalism starts with the earliest interactions. If they're sensitively handled, with an obvious attitude of consideration towards the diners' needs, then every subsequent recommendation has an increasingly greater chance of being perceived as a solution to the evening's overall enjoyment.

The kind of qualifying we're talking about is not complicated and it doesn't come with ulterior motives. Frankness is a virtue - "Tell me what you're thinking about drinking this evening, and I'll make your experience as satisfying as possible…" Tables of two, especially those having very different dishes, can have entirely different wine-by-the-glass experiences choreographed for them. Their individual enthusiasms will increase their combined enjoyment. Wait staff can even recommend transition wines between courses, to flesh out the dining experience and incremental sales. "I find a rosé the perfect transition between white and red, and so enjoyable while your main courses are being prepared. We have this lovely Provence by the glass…" It's important to recognize that any generally competent staff member armed with the right technique can secure this sale, regardless of how expert or otherwise their knowledge of that particular Provence rosé - or, for that matter, any other kind of wine.

Solution selling is an aspiration and an attitude. It's a little more complicated than securing a one-off impulse sale, but not a lot. It's a technique that can be easily taught. Floor staff invariably respond positively because it's a technique that can be adapted to their own preferred style with customers. Once established as part of the F&B sales culture, the rewards from solution selling are disproportionately high - in increased sales, enthusiasm of staff, and satisfaction of diners.

In considering the benefits of an incremental sales strategy for F&B, bear in mind two huge pluses. First the numbers. When you do the math conservatively, it becomes evident that just a modestly performing staff member can add in excess of $200 additional profit over a week in impulse sales alone. Extrapolate that across all floor staff, and factor in further business from add-ons and trade-ups, and the numbers become impossible to ignore. That's the direct flow to the bottom line. Equally important is the impact on customer perceptions. The incremental sales initiatives described, enhance the dining experience. They increase customer enjoyment and generate extensive positive PR through "word of mouth", as diners share their experiences with others. That's the indirect flow - and it's a lot cheaper than advertising.

What are the obstacles to this approach? There are two common misreadings. Both are equally damaging. Both are killers of an incremental sales strategy in F&B. The first is extreme pessimism - "Our floor staff could never do that." The second, blind optimism - "Let's pass the word down we want it to happen."

For all that we like to express confidence in our people, when the chips are down often we're inclined to judge them by harsher standards than reasonable. If not contempt, then familiarity can certainly breed doubt and skepticism. "Don't get me wrong, our staff are great, but…" Or this variation "if it's as straightforward as that, why aren't they doing it already - they're obviously not up to it." To which we'd reply (on behalf of front of house staff everywhere): "Would you? Show me my manager doing it."

The other reaction, blind optimism, is at heart the same - a tacit acknowledgement by management that they don't want to get involved. Both are understandable in a culture where traditionally selling sits low in management priorities. But why should this remain the case? Any number of psychological studies show that a suggestion has the power of persuasion - when it's made at the right time, in the right way. Add to that the psychological truth raised earlier, that diners come to dine ready and willing to accept suggestions from floor staff, provided they perceive them as competent.

There's clearly significant revenue to be gained here, but how does it play out in practical terms?

First, the competence of floor staff is not just a judgment by customers. It's something they need to believe themselves. Your staff should never have to pretend to know more than they do - and that goes double with a subject as complex as wine. Knowledge can be useful in creating incremental sales, but without technique it's wasted. The incremental sales methods outlined are technique driven, not knowledge dependent. And techniques can be taught far more easily and effectively than knowledge. Techniques are broad in application whereas wine knowledge (while admirable) is narrow. Give your front of house staff a technique and you'll instantly improve their sales performance.

But all of this begs the question of management's attitude. An incremental sales strategy in F&B can't just be bolted on to an existing culture in which sales responsibilities are ambiguous and often contradictory. Nor will it blossom and spread "like a hundred flowers", as staff member after staff member act on their own volition. It comes from the top and it requires an adjustment in mindset. The encouraging thing is that it doesn't take much of management's time to set up - just its firm commitment. Over to you, then - the results are certainly worth it.

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This article was co-authored by Evan Mitchell, Senior Consultant, Mitchell Performance Systems. Mr. Mitchell's interest in the dining experience began in his university years when he worked as a waiter and later sommelier in leading Australian restaurants. On graduating from the University of Sydney with an Honors degree in English Literature and Psychology, he continued to work in the restaurant industry until joining Mitchell Performance Systems (MPS) as a designer and consultant. After a number of years working on sales productivity strategies for leading US consumer products companies, he returned to his earlier love, the food and wine area. He now leads the MPS consulting activities within the restaurant industry. He has co-authored three publications on wine and numerous articles on the dining experience. Mr Mitchell can be contacted at emitchell@psychologyofwine.com

After completing a PhD in Psychology at the University of Sydney, Brian Mitchell spent several years in clinical practice. He moved into retail consulting with the Mandev International group. He became President of the North American, Asian, and Australian operations. He also pioneered performance management systems within a major football code. In the mid-1990’s Dr Mitchell established Mitchell Performance Systems (MPS), consulting with the consumer packaged goods industry. The company worked on techniques to improve sales and negotiation. Mr. Mitchell has also worked on improving revenue and profits in restaurant Food & Beverage. Dr. Mitchell can be contacted at brian@loveandwine.com.au Extended Bio...

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