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5 ideas from the Chain Operators Exchange

For the first time in a decade, I’m attending the annual Chain Operators Exchange, better known as COEX, an industry event that’s undergone significant changes in recent years. One of them was giving restaurant operators more of the spotlight that fell in previous eras on celebrity keynoters, motivational speakers and suppliers.

The adjustment yielded ideas from smart restaurateurs who aren’t exactly on the industry speaking circuit, talking about concepts that are similarly low profile. 

Consider Slater’s 50/50, a five-unit concept specializing in burgers made in equal parts from ground beef and bacon, a major factor in generating per-store sales of  $4.5 million to $6 million. Or Cooper’s Hawk Winery and Restaurant, with average unit volumes of $8.7 million, which puts it in the same sales bracket as Cheesecake Factory and Maggiano’s (though possibly in a higher profit echelon, given how much of the check is generated by wine.)

Here are some of the ideas they cited as contributors to their success, augmented with an insight from a provider of research data, a signature of COEX then and now: 

Respond personally to even routine tweets and other social media postings by guests. “Because I can’t be in all of my restaurants and my name is on the door, it’s how I keep a connection,” said Scotty Wise, CEO and founder of seven-unit Scotty’s Brewhouse. “People know they have a personal connection. If they want to talk to Scotty, they can just send a message.”

The downside, he said, is how the staff conveys that message to customers: “’Follow him and see how much of an idiot he is.’”

Who says full-service places can’t do grab-and-go? Scott Slater, CEO and namesake of Slater’s, doesn’t like the idea of fast-casual places eating his lunch. So the chain offers a $5.99 bagged meal of burger and fries that “looks just like what you get at Five Guys,” Slater said. The takeout option is promoted through social media and is a big seller, he added.

Celebrate your outlay for employee health insurance. All but the smallest businesses will have to offer health coverage eventually, so why tar yourself as anti-employee by grousing or trying to game the system? Tim McEnery, CEO and co-founder of Cooper’s Hawk, said his little chain’s willingness to cover employees is viewed positively by prospective hires who know the big guys intend to keep employees ineligible by cutting their hours. “If someone’s good, I want them out there for at least 30 hours. I want more than 30 hours from them,” he says.

“It’s expensive,” he stressed. “It makes you want to throw up. But get over it and move on. We should be focused on selling better food and service.”

Schedule a staff appreciation week. For a seven-day stretch every year, Scotty’s Brewhouse says thank you to employees by providing them with free food and apparel and ample applause, all part of Staff Appreciation Week, says CEO Wise. It’s an idea he admits stealing from Phoenix’s Wildflower Bread Company.

The tribute is part of a larger strategy of viewing employees rather than guests as Scotty’s key constituency, says Wise. The approach is conspicuously similar to what New York restaurateur Danny Meyer cites as the key to his outposts’ phenomenal success.

In the case of Scotty’s, the effort extends to inviting participation in a chain-wide giveback to a social or community cause every 90 days.

Rethink the role of limited-time offers. In three out of four restaurant visits, the guest knows what he or she intends to order before arriving, said Jack Li, managing director of the data firm Datassential. “If you’re doing LTO marketing, how much of a window is really there?” asked Li. “That LTO sign in the window, maybe it’s more of a tool to get them back for a next time.”

Follow me on Twitter tomorrow (@peterromeo and @RB_magazine) for more coverage of COEX.

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