WA S H I N GTO N
October 2018
BRAND BASICS What’s in a Brand? Our Brand Story Social Media and Personal Brands Plus Your Customer Data and the European Union
Washington Hospitality Association 510 Plum Street SE Olympia, WA 98501-1587
October 2018 │ 1
STANDARD US POSTAGE PAID APEX MAILING SERVICES INC
Get the low rates you want and the fuss you don’t.
HOSPITALITY’S OWN
Credit Card Processing Program We’re delivering what members have asked for – volume pricing, no rate increases behind your back, no annual contract, no early termination fees. Powered by
Amy Spradlin | 800.225.7166 x 117 | amys@wahospitality.org
Local and Naturally Raised Beef
• No Hormones • No Antibiotics • Strict vegetarian diet
Country Natural Beef is a family ranch owned co-op that does things differently. They believe that the health of our lands, people and animals matter most. That’s why Country Natural Beef has stuck to their principles for decades! To learn more about Country Natural Beef visit www.countrynaturalbeef.com This fine product can be purchased through Sysco’s Pacific Northwest locations:
Sysco Portland, Inc. 26250 SW Parkway Center Dr. Wilsonville, OR 97070 503.682.8700 • sysco.com/Portland
Sysco Seattle, Inc. 22820 54th Ave. S. Kent, WA 98032 206.622.2261 sysco.com/Seattle
Sysco Spokane, Inc. 300 N. Baugh Way Post Falls, ID 83854 208.777.9511 • sysco.com/Spokane
EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Editor-in-Chief, Marianne Scholl Art Director, Lisa Ellefson Managing Editor, Morgan Huether Copy Editor, Paul Schlienz Contributing Editors: Andy Cook, David Faro, Jillian Henze, Sheryl Jackson, Lisa Leinberger and Nicole Vukonich
Inside
EXECUTIVE COMMITTEE Chair: Chad Mackay, Fire & Vine Hospitality Vice Chair: Ron Oh, Holiday Inn Express North Seattle Shoreline EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Haase Chief Financial Officer, Darin Johnson Senior Director of Communications & Technology, Lex Nepomuceno Director of Local Government Affairs, John Lane Director of State Government Affairs, Julia Gorton Director of Membership, Steven Sweeney
Features 11
Essential Health Insurance Questions
18
What’s at Stake in your Brand?
20
Evolution of a Brand
22
Our Brand Story
24
GDPR and the Hospitality Industry
26
Social Media and Your Personal Brand
510 Plum St. SE Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 wahospitality.org
In Every Issue Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification.
6
From Your President and CEO
Reproduction of articles appearing in Washington Hospitality Magazine are authorized for personal use only, with credit given to Washington Hospitality Magazine and/or the Washington Hospitality Association.
8
News Briefs
9
Association News
14
Local GA Update
Articles written by outside authors do not necessarily reflect the views or positions of the Washington Hospitality Association, its Boards of Directors, staff or members.
16
State GA Update
28
Calendar and New Members
Products and services advertised in Washington Hospitality Magazine are not necessarily endorsed by the Washington Hospitality Association, and do not necessarily reflect the opinions of the Washington Hospitality Association, its Boards of Directors, staff or members.
30
Ask the Expert
ADVERTISING INQUIRIES MAY BE DIRECTED TO:
Andy Cook
360.956.7279 andyc@wahospitality.org Washington Hospitality Magazine is published monthly for members. We welcome your comments and suggestions. email: news@wahospitality.org, phone: 800.225.7166. Circulation: 6,310
4 │ wahospitality.org
October 2018
WASHINGTON
CONVENTION NOVEMBER 11-13, 2018
PE PR O PE O PL RF CE E, O SS RM , A
N
CE
Hyatt Regency Lake Washington at Seattle’s Southport www.wahospitalityconvention.com
President and CEO Your Brand and Your Mission About 10 years ago, I found myself at a legislative reception in a bustling catering hall. I got introduced to a new legislator by another legislator. When I said I was from the restaurant association, the new legislator’s initial reaction was a derisive “Oh, the anti-minimum wage group.” To my pleasant surprise, the legislator who introduced me said, “Actually, the Association is a very pro-community group. It’s always interested in training and growing employees, and I know many of the members who are small restaurants always serving with me on different neighborhood task forces.” The legislator continued on and gave a couple of examples of her positive experience with the Association in the Legislature.
Anthony Anton President & CEO
Let’s talk about brand. The new legislator brought in her impression of what we stood for as an industry -- as an anti-minimum wage, anti-worker industry. The legislator who knew us presented a very different impression, one of a community-driven and solutions-oriented organization. If one legislator was to introduce you to another legislator, what would they say about you and your business? There’s a difference between your brand and your mission. The mission really drives what you’re here to do. The brand drives customer impressions and how the public perceives what you are. When I was a lobbyist, my attire was part of my brand in the Legislature. Everyone knows I’m most comfortable in a golf shirt and Dockers. But, each day on the hill I would wear my suit. I wanted legislators to take our industry seriously. I wanted the Association to be seen as one of the most important business organizations in the state. Anthony in a suit best represented our brand. The crux of brand is not only the color or the cartoon character or the font. It’s those impressions that lead to a reaction. According to Jerry McLaughlin, a marketing writer for Forbes, “Your brand is what your prospect thinks of when he or she hears your brand name. It’s everything the public thinks it knows about your name brand offering—both factual (e.g. It comes in a robin’s-egg-blue box), and emotional (e.g. It’s romantic). Your brand name exists objectively; people can see it. It’s fixed. But your brand exists only in someone’s mind.” You want to empower your team to make decisions that leave customers with the impressions of your brand. Simple example: One of your employees is buying art for your lobby. Your brand is local. If you put in pictures that are clearly mass-produced, you’re leaving the impression that your business is canned or pre-manufactured. If you put in pictures of the local berry fields and bottles of Washington wine and the attractions in your area, you’re reminding customers and guests that you’re local. You don’t want to go out and buy the pictures. You have to run your company. But you want the people who do to think about this. This goes to clip art on your website, taglines on your customer email list, all the way down to dress code. Now at the Washington Hospitality Association, every day we work to make sure the legislator meeting us for the first time and the legislator who has experience working with us will both say our industry is made up of local, community-oriented businesses seeking solutions and helping our workforce succeed. I encourage you in the coming pages to learn about brand, identify it for yourself and for your business and strengthen it to help you meet your mission.
6 │ wahospitality.org
Primary Source of Information | News Briefs
Some restaurants banning cellphone use For restaurants, when customers dine in and take Instagram photos of their meals, it can be a great way to share the word about your business. It’s free advertising. But when customers have loud conversations at their table, it can be an annoyance for the other guests. Harvey Cedar’s Clam Bar in Beach Haven, N.J., was one of the first restaurants to ban the use of cellphones. Manager Nel Lally instituted the policy 15 years ago after many patrons complained of loud conversations interrupting their meals. “People did not understand how to talk in a normal voice,” she told NJ.com. She posted a sign at the front door at the request of her customers and has kept the policy in place. “People love it,” she said. She doesn’t even have to monitor cellphone use. Her regular customers do it for her. At Fascino, an upscale Italian restaurant in Montclair, N.J., customers are asked to take their conversations outside, but are encouraged to snap photos of their meal.
Pumpkin spice a boon for breakfast and coffee chains The NPD Group has new data that suggests pumpkin spice drives sales during the fall months. According to National Restaurant News, customers who buy pumpkin-spiced lattes tend to have higher incomes, are female, have no children at home and tend to be younger—about 55 percent of the customers are younger than 45. They also visit pumpkin spice latte establishments twice as many times as typical consumers and spend an average of $3 more. “Pumpkin spice latte limited-time offers have a positive impact on visit frequency and check averages, as consumers tend to purchase food along with the beverage,” said Annie Roberts, vice president for food service at NPD. “Consumers anticipate their availability and know the drinks are only around for a short period of time, and this anticipation creates demand.”
Katherine Lugar leaving the American Hotel & Lodging Association Katherine Lugar, president and CEO of the American Hotel & Lodging Association, has announced she is leaving the organization later this year. She has accepted the same position with the American Beverage Association. Under Lugar, AHLA tripled its membership and revenue, aligned policy interests of brand, owners and management companies, and made its political action committee one of the largest among all trade associations. “I am fortunate to have worked with the outstanding staff and leadership of the American Hotel & Lodging Association,” she said in a statement. “Together we have made significant strides over the past five years. While I will dearly miss working with and for leaders of America’s iconic hotel companies and the truly exceptional AHLA staff, I am confident that the success of the organization will only continue and expand. It has been a true honor to represent this innovative and dynamic industry.” –Morgan Huether and Lisa Leinberger
8 │ wahospitality.org
Primary Source of Information | Association News
Golf FORE Education Thank you to our sponsors and attendees. The Washington Hospitality Association Education Foundation raised more than $53,000 at the tournament this year. Tournament Winners First Place – Jason Thomson, Richard Mueller, Robby Hipp, Jason Hamilton Tenth Place – Pete Finlon, Josh Mayr, Charles Williams, Josh Mayr Last Place – Sean Hansen, Jeff Morgan, Kevin Eggen, Jeronimo Cisneros Closest to the Pin Winners Victor Mena David McLaughlin Megan Bjornberg Jacque Farrell Kevin Eggen Robby Delaney Longest Drive Men: Matt Eveland Women: Kim Murphy Putting Contest Bryce Winn
Hospitality Convention: VIP passes still available, industry Stars recognized Enhance your Washington Hospitality Convention experience with a VIP pass upgrade. This premier industry event takes place Nov. 11-13 at Hyatt Regency Lake Washington at Seattle’s Southport, and with your VIP pass you’ll enjoy a private hotel tour, appetizers and drinks on Sunday afternoon, a private spirits tasting and an exclusive musical performance from an up-andcoming local artist on Monday afternoon, plus additional VIP benefits throughout the convention. On the first night of the convention, the Washington Hospitality Association will present the Stars of Hospitality Awards. These awards celebrate the truly exceptional professionals and properties that exemplify the very best of Washington hospitality. Industry stars will be recognized for exceptional work, exemplary leadership and more. Tickets for the awards dinner come with convention registration or can be purchased independently. VIP passes and award dinner tickets, as well as general registration, are available at wahospitalityconvention.com.
October 2018 │ 9
Education Foundation
Thank you all for helping raise over $53,000!
FARRELLI’S pizza
and Smith Greene c o m p a n y
Aberdeen, WA
LEGAL SINCE 2010
R
Sponsored Content
Essential Health Insurance Questions As we move toward 2019, here are some basic questions hospitality business owners and operators need to be asking about health care insurance. By Gordon Kushnick, HIHIT broker and owner of Essential Benefits
People, process and performance—these three words are the core topics of next month’s Washington Hospitality Convention. They also describe the questions I answer every day for restaurateurs and hospitality professionals considering offering employee benefits, especially health insurance. PEOPLE “Why should I offer employee benefits?” and “Who should be offered benefits?”— simple questions with complex answers. Let’s consider who first. Who? Small group coverage—defined as employers with less than 50 employees on payroll—can be offered to groups with as few as two eligible employees. The HIHIT program, available only to members of the Washington Hospitality Association, allows for a plan to be offered to “managers” only. For businesses with under 50 employees on payroll, benefits can be offered to employees that meet YOUR definition of eligible employment. Why? Better benefits attract and retain key employees. This may seem like a marketing slogan for employee benefits, but it must be considered in this tight labor market. Large employers have to offer health insurance to their full-time employees and your competition down the street may already be offering benefits too. How are you going to compete with them to keep your key employees? Increased wages alone may not do the trick. PROCESS You already wear 37 different hats, and there isn’t a 25th hour in the day, so why consider taking on additional management burden? The fact is heath care coverage is simply not that hard. Here’s how you do it right: •
Engage a broker who can help define your goals, needs and budget.
•
Produce a census of eligible employees.
•
Provide the census to your broker, and let them shop for options. Ultimately, they will provide you with a synopsis of plans that meet your benefit and budget criteria.
October 2018 │ 11
Sponsored Content
•
Conduct a staff meeting, led by the broker, who walks everyone through their benefits and manages initial enrollment.
•
Communicate additions and terminations, to your broker, who in turn manages your roster with the insurance carrier and documents payroll deduction details.
It’s easy for me as an insurance broker to make light of this because I deal with this all day long. But honestly, after a program is launched, if you have a solid broker partner you should only have three monthly tasks: •
Provide applications to newly eligible employees and email them to your broker.
•
Email your broker when an employee needs to be terminated from coverage.
•
Pay your bill.
Washington Hospitality Convention Nov 11 -13 at the Hyatt Regency Lake Washington at Seattle’s Southport. Learn more at wahospitalityconvention.com. Gordon Kushnick is a licensed independent health insurance broker representing the HIHIT program. For the past three years he has been the top-performing broker for HIHIT, enrolling more hospitality organizations and employees than any other independent agency. Success aside, Gordon speaks your language. He was a restaurant general manager, director of operations and owner-operator for nearly 20 years in Seattle. He has also worked as a consultant to chain restaurants in both the U.S. and Europe.
PERFORMANCE Simply stated, the individual health insurance market is a disaster. If you are insuring your family with an individual/ family plan through the Washington Healthplanfinder and/or are providing your key employees with a stipend to purchase their own plan, you need to consider moving to a group health insurance program. Here’s why: •
•
•
Individual health insurance rates, on average, increased 35 percent last year, and we expect an additional increase of 15 percent this year. Individual health insurance plans available in Washington are bound by Washington. Outside of the state, your coverage is limited to life-threatening emergencies. Individual health insurance plans are, in some way, managed-care plans. This means you have a limited network of doctors and facilities to seek care from and, in most cases, you need a referral to see any doctor other than your primary care provider.
We can mitigate all these issues in the small group health insurance market. Better rates, better networks and better plan designs are available alongside lower deductibles and out of pocket costs. If you’d like to learn more, please consider attending one of our upcoming lunch and learn sessions or visit us at the
12 │ wahospitality.org
Lunch & Learn Series: Save the Date Join us for lunch with our benefits experts and your industry colleagues for an open discussion on employee benefits and health insurance requirements. ÆÆOctober 15 Seattle ÆÆOctober 16 Olympia ÆÆOctober 22 Kent/Federal Way ÆÆOctober 23 Tacoma For October dates, times and locations go to hihittrust.com or call 877-978-1839.
H.I.H.I.T. H.I.H.I.T. is cost saving built for hospitality organizations.
8779781839 Features of H.I.H.I.T. include: 50% Participation 50% Contribution Classing Out Dual Option Stand Alone Products Easy enrollment and group set ups Smart Phone App for TelaDoc PPO (Preferred Provider Organization)
HSA (Heath Savings Account) EAP (Employee Assistance Program) Direct Primary Care (DPC) Life Insurance Disability Insurance Cobra Administration Owners covered for on the job injuries
Call to find out more about H.I.H.I.T. and other standalone benefit programs like “TelaDoc” at $2.56/month/person.
Government Affairs | Local GA Update
Reminder: Look for details on local minimum wage increases In addition to the changes coming with the Paid Family & Medical Leave program, on Jan. 1, 2019 the statewide minimum wage will increase to $12 on the first of the year. Seattle, Tacoma, and SeaTac have higher local minimum wages and these will also increase and in some cases be adjusted for inflation. Visit wahospitality.org/resources/minimumwage-resources/ for more information. As of press time, the cities of Seattle, Tacoma and SeaTac have not yet announced 2019 minimum wage increases. Large businesses in Seattle should check association communications or go to seattle.gov/laborstandards after Sept. 30 for 2019 minimum wage information. Large employers in Seattle with 501 or more employees will have a single minimum wage regardless of whether the employer pays toward medical benefits or the employee makes tips. The minimum wage will be based on $15.45 per hour rate plus an as-yet-to-be-announced increase for inflation. The increase will reflect the rate of inflation based on the Seattle-Tacoma-Bremerton Area Consumer Price Index for Urban Wage Earners and Clerical Workers. For employers with fewer than 500 employees, the minimum wage for 2019 will be $15, or $12 if the employer pays at least $3 per hour toward the employee’s medical benefits or the employee earns $3 per hour in tips.
Join our GA team at upcoming regional meetings In October and November, the Government Affairs team will travel the four corners of Washington state for regional meetings with members. Regional meetings are a way for you to provide input on what issues are important to you. This year you’ll also learn more about the Paid Family and Medical Leave Act that goes into effect on Jan. 1, 2019. Here is a complete list of meeting dates and times. Please make plans to join us at a meeting near you! Register to attend at bit.ly/2I8ZhIx. Bellingham: Oct. 10 from 10 a.m. to noon Holiday Inn & Suites Bellingham 4260 Mitchell Way Bellingham, 98226 Spokane: Oct. 23 from 2 to 4 p.m. Hilton Garden Inn 9015 W Hwy 2 Spokane, 99224 Tri-Cities: Oct. 24 from 10 a.m. to noon The Lodge at Columbia Point 530 Columbia Point Drive Richland, 99352 Renton: Nov. 13 from 10:30 a.m. to 12:30 p.m. Hyatt Regency Lake Washington at Seattle’s Southport 1053 Lake Washington Blvd N Renton, 98056
For more information, visit www.seattle.gov/laborstandards. Lime bikes arrive in Spokane This fall, expect to see bright green bikes and electric scooters around the downtown area of Spokane. A two-month pilot program with the bikeshare company Lime got underway on Sept. 4. The city hopes this bikeshare program will be an alternative to driving. Lime bikes are “dockfree” and traditional bikes rent for $1 per half hour. Electric bikes and scooters cost $1 to unlock and 15 cents a minute after that. Riders can use the bikes after downloading the Lime app on their phones to unlock and pay for their ride. Downtown hotels and restaurants benefit from the bikes as they are fun for their guests and can also free up parking in the downtown core. For more information, visit the city’s website or www.li.me. –Morgan Huether 14 │ wahospitality.org
Work Safe. Save Money. Deadline fast approaching!
Dramatic new program changes coming
Sign your new contract today. Up to 100% fees returned
Performance refunds now rewarded on first and third adjustments! You get: Claims management Assistance with all L&I issues Safety training Mock inspections Custom compliance plans
Invest in workers’ comp management and you will be rewarded for your performance.
RETRO SINCE 1986
800.225.7166 | fax 360.357.9232 | 510 Plum Street S.E. | Olympia, WA 98501-1587
If you are already a participant in the RETRO program, look for contact in the middle of September from our RETRO team! We will explain the changes in detail. RETRO Department 360.956.7279 800.225.7166 retroadmin@wahospitality.org October 2018 │ 15
Government Affairs | State GA Update Paid Family & Medical Leave premiums begin Jan. 1, 2019 Background: In 2017 the Washington Hospitality Association was a key negotiator during the formation of the state’s Paid Family & Medical Leave Act. Because of our influence, Washington’s Paid Family & Medical Leave program is the best in the nation for employers and employees. Since the creation of the program, Washington Hospitality has played a critical role on the advisory committee, continued to raise questions and promote the perspective of employers and the hospitality industry during the process. Rulemaking for the program began in 2017 and will continue through 2020. What’s the issue: Paid Family & Medical Leave premium collections and reporting requirements begin Jan 1, 2019, and employers need to be prepared for the coming changes. What we’re saying: Paid Family & Medical Leave will help eligible employees care for themselves or their family members when they need it most. Washington’s program includes a small business exemption, offers small-and medium-sized business assistance, business flexibility and relief from unemployment insurance charges. It also provides one statewide policy for everyone. To help you get ready for the beginning of the Paid Family & Medical Leave program, we are hosting a series of webinars and meetings on how the program works. The first webinar was on Sept. 26 and offered a high-level overview of the program. Additionally, Paid Family & Medical Leave will be a topic during the State Government Affairs Regional Meetings (see page 14 for details). State policy guidance on tips, service charges and gratuities Background: The passage of Initiative 1433 in 2016, together with recent federal developments, has created some gray areas and confusion surrounding tips, service charges and gratuities. In 2018, the state Department of Labor & Industries (L&I) drafted policy guidance to provide additional clarity. What we’re saying: We strongly support the policy guidance as drafted as they align with federal rules and our current industry guidelines. If adopted as written, it will represent a major win for the hospitality industry.
Rulemaking on the executive, administrative and professional overtime exemptions Background: Last February, L&I announced it would implement rulemaking on the salary threshold for executive, administrative and professional (EAP) exemptions from the state Minimum Wage Act. Over the summer, the Government Affairs team worked with stakeholders and L&I to provide feedback during monthly meetings and requests for comment. What’s the issue? Currently, there is a salary threshold and duties test for executive, administrative and professional employees that must be met to be exempt from the overtime rules. The Washington Hospitality Association and a coalition from the business community continue to support raising the state salary threshold to align with the federal rule, which is also being reviewed. Other stakeholders would like to see the department adopt a rule that would tie the salary threshold to 150 to 300 percent of the minimum wage. What we’re saying: We believe in protecting early and midmanagement positions within the industry through alignment of the state and federal overtime exemption rules. These early management positions are critical for the hospitality workforce and serve as the launch pad into career positions. What’s next? L&I will continue its rulemaking process through this fall. There will likely be more opportunities to comment and the State Government Affairs team will be there to protect the career ladder and jobs in hospitality. Washington State Retail Food Code now open for revision This year, the state Department of Health opened the Washington State Retail Food Code to revision. Over the next 18 months, the department and stakeholders will be active participants in any updates and examining the 2017 U.S. FDA Food Code for adoption in Washington state. If you have any questions, please contact Samantha Louderback, state Government Affairs manager, for more information. Minimum wage reminder: In addition to the changes coming with the Paid Family & Medical Leave program, on Jan. 1, 2019, the statewide minimum wage will increase to $12 on the first of the year. Seattle, Tacoma and SeaTac have higher local minimum wages and these will also increase and in some cases be adjusted for inflation. Visit wahospitality.org/ resources/minimum-wage-resources for more information. If you would like more information on any of the above developments, please contact your State Government Affairs team at 360.956.7279. –Nicole Vukonich
16 │ wahospitality.org
Delivering A Greater Customer Experience
PRODUCE ~ CENTER OF THE PLATE ~ GROCERY & FROZEN FOOD ~ SEAFOOD BUSINESS SOLUTIONS ~ BEVERAGE ~ DISPOSABLES ~ SUPPLY & EQUIPMENT seattle.fsafood.com
October 2018 │ 17
WHAT’S AT STAKE IN YOUR
By Pia Larson, Fingerprint Marketing
If you sneeze or have a runny nose, what do you ask for? A Kleenex, of course. Seldom do you ask for the generic tissue. Or, again, if you live in the South, what do you ask for when you’re thirsty? Not a soda, not a soft drink, but a Coke – even if you actually want, say, a Dr. Pepper or a Pepsi. In many areas of the South, all soft drinks are Cokes. In both instances, these two brands are the default umbrella names—the ones that first come to mind —for all similar products. Now, that right there is brand awareness. But how does that carry over into marketing a brand in the hospitality arena? Brand competition in the hospitality industry The hospitality and travel industry is on the upswing. The competition among brands is keen, and brand awareness is at a premium. Consider the following statistics from 4Hoteliers: In 2016, travel and tourism “contributed $7.6 trillion to the global economy and supported 292 million jobs.” One in 10 jobs is connected to this industry.
18 │ wahospitality.org
This sector is projected to account for 11.4 percent of the global GDP by 2027 and to “support more than 380 million jobs globally.” The hospitality game is getting bigger with more and more competitive players. A lot of the growth, though, is additive because as consumers have more disposable income, they eat out more and take more trips. Still, competition is keen and achieving brand awareness a critical element of any sound marketing strategy. Hospitality’s unique brand awareness challenges It’s also important to keep in mind that hospitality sales differ from straight-up consumer goods sales. Hospitality marketers are trying to sell tangible and intangible product—both goods and services—all while creating brand awareness. More often than not, the services sold are paramount, so the job is to create the right consumer feeling about the brand. Does your company offer an elite luxury product or a fun affordable one? Either way, consumers’ perception of your brand has to be accurate. Marketing a brand also involves in large part creating a consistently recognizable brand because the hospitality industry is made up chiefly of experiential services. Brand recognition ensures that customers will return to use your services over and over again. Repeat customers are more profitable, so brand awareness and marketing strategies have to embrace both maintaining healthy relationships with past customers and striving to draw in new ones. According to Concordia University’s “The Importance of Marketing in the Hospitality Industry,” “a solid marketing strategy is critical to building a brand, attracting new customers and maintaining loyalty. The hospitality industry is no different. Because customer loyalty is key, marketing managers and executives devote a lot of time and resources to building brand awareness and creating
ongoing, interconnected campaigns…. However, this particular industry has a unique set of challenges that must be overcome.” Modern brand marketing challenges The increasing importance of brand awareness (and of marketing accordingly) is a result of two main factors: technological changes/adaptations and changes in customer profiles. As for the technological changes, a huge driving force is the importance of mobile. In a recent article on 4Hoteliers. com, marketing expert Ram Gupta pointed to the impact of technology. “In emerging markets around the world, one billion people are expected to come online globally. Most of these will be customers who will experience their entire guest lifecycle on their smartphones. Hospitality and travel companies have no choice but to invest in mobile-friendly and mobile-first guest engagement and retention strategies,” he wrote. The upshot is that customers will respond best to a brand that offers mobile-friendly services and a personalized experience. The customer profile is also hugely important in the way your brand must be presented now. According to Gupta, the tourism industry, for example, “is witnessing a change in the psychographic and demographic profiles of travelers. Along with Gen X travelers, there’s a fresh influx of millennials, whose expectations and lifestyle are setting completely different standards for industry performance.” Currently, then, the customer experience is the most important of all brand differentiators, driving both customer loyalty and referrals. Providing unmatched service that roots the hotel or restaurant in its local climate while also giving unique experiences is now a critical factor in the success of a hospitality business.
make them choose yours. It’s the role of marketers to determine what makes consumers choose a particular hospitality product/service. Awareness Creation – Creating brand awareness is often the crucial element. If consumers don’t know about you, they can’t purchase what you’re selling. Traditional marketing channels still work to some degree, but digital trumps them all now. That’s why a firm that specializes in both digital marketing and business branding brings exceptional value. Promotions – For brand-centric marketing, you just can’t beat the power of the principle of reciprocity – that is, promotions. You offer potential hotel guests something like a free spa treatment, and they reciprocate by booking a threeday stay and purchasing other hospitality services. Relationship Creation/Maintenance – For any business, relationships are everything, and they are at the heart of brand awareness. That means ongoing brand marketing needs to create and maintain the kind of customer relationships that result in social media and word-of-mouth referrals.
Elements of marketing a brand
The importance of a recognizable brand and effective marketing of that brand are undeniable, especially if you want the kind of brand awareness that Kleenex and Coke have – where that’s the first thing people think of when they want that kind of product. But you have a hospitality business to run.
Strategies for marketing a brand are as individual and customized as the companies that deploy them. There are, however, some common and necessary elements, such as:
A qualified marketing firm – one that can custom tailor your marketing/branding strategy to meet your specific needs— is a great way to get the services you need to address to establish your brand and keep it in front of guests.
Preliminary Research – All effective brand marketing starts with research, but it’s especially critical in the hospitality industry. You simply must understand why consumers choose one particular brand over another and what would
So, what’s in a brand? Everything if you get it right. Not much if you get it wrong. Pia Larson and Seattle-based Fingerprint Marketing help customers address all facets of branding—the look the feel, the story and the transactions—and then get brands in front of customers. Learn more at fingerprintmarketing.com. October 2018 │ 19
EVOLUTION OF A BRAND
Your brand is perhaps the most important investment of time and money you will make in your business. From nascent concept to bold statement, every brand goes through an evolution of sorts. Here’s how brands typically develop—and the facts required to get yours right. 20 │ wahospitality.org
DEVELOP THE BIG IDEA
Be sure you know the answers to your key questions:
WHAT
WHO
What do we do better than anyone else?
HOW
Who are our best customers, and how will we compete for them?
What do we want to be—and not want to be?
Satisfied customers are good for business:1
66%
61%
The percent of customers that are “very likely” to make more purchases from brands they like
The percent of customers that are “very likely” to refer that brand to others
How will we fulfill our brand promise through products and services?
So, take time to get your message, products, and services right from the start.
MAKE AN IMPRESSION The visuals and copy you create to tell your brand’s story matter. Choose the right look, tone, and channels to reach your audience.
50 milliseconds
The time it takes to form an impression of your website. 2
63%
The Rule of 7 On average, people must see your brand message seven times before they remember it. 3
90%
The percent of people that will buy from an authentic brand over a brand that isn’t perceived as honest. 4
The percent of people that make decisions without being conscious of them, so impressions and emotion matter when it comes to branding! 5
TELL YOUR BRAND STORY Next, you'll need to tell your brand's story—who your brand is in the market and why you’re there.
Shared values
60%
80%
"Results" Stories
Matter more to customers than building relationships. 6
The percent of people that trust their peers for recommendations. 7
Nearly 80% of people believe companies publishing custom content are interested in building good customer relationships. 8
Are more important because they show how your company can help solve a problem or serve a need.
LIVE THE MESSAGE Once you have refined your brand and its message, it’s critical to keep that promise to your customers.
Brand Visibility
23%
•
Brands are 3 to 4 times more likely to have brand visibility if they are presented consistently. 9
The average revenue increase brands can attribute by presenting themselves consistently. 10
Regularly review each interaction as if you’re the customer. Is your brand being represented as it should be? Is your representation consistent in its look and customer service levels? It may be necessary to make changes or improvements over time, but in the long run, these numbers show that doing so is worth it. 1 https://marketingsherpa.com/freestuff/customer-first-study 2 http://www.tandfonline.com/doi/abs/10.1080/01449290500330448 3 https://www.krusecontrolinc.com/rule-of-7-social-media-crushes-old-school-marketing/ 4 http://www.adweek.com/digital/the-power-of-brand-authenticity-on-social-media-infographic/ 5 http://mag.ispo.com/2015/01/90-percent-of-all-purchasing-decisions-are-madesubconsciously/?lang=en
6 https://hbr.org/2012/05/three-myths-about-customer-eng 7 https://www.edelman.com/executive-summary/ 8 https://keydifferencemedia.deviantart.com/art/Consumers-Believe-in-Custom-Content-566134338 9 https://www.lucidpress.com/blog/25-branding-stats-facts 10https://www.lucidpress.com/blog/25-branding-stats-facts
This infographic is generously provided to us by 3M, which offers powerful solutions to enhance the impact of your brand at 3m.com/3M/en_US/brand-you. © 3M 2018. All Rights Reserved.
October 2018 │ 21
Our Story: How Washington Hospitality Association Launched its Brand By Lisa Leinberger and Jillian Henze, Washington Hospitality Association
Whether you are a new business owner or are revamping your old business, a brand is an important tool that lets your customers know what your business is all about and sets it apart from the competition. The best question to ask yourself when thinking about your brand is who are you as a business? What is the heart and soul of your organization? These are questions the rebranding task force asked before the Washington Restaurant Association and the Washington Lodging Association officially joined forces two years ago as the Washington Hospitality Association. Back in 2013, Zahoor Ahmed, chief financial officer and vice president at the R.C. Hedreen Company, was the incoming chair of the Washington Lodging Association when discussions about a merger between the two associations got underway. At the time, there were combined restaurant and lodging associations in 26 states but not in Washington. Although the two sectors differed in size and texture and profits, they connected in their goals of serving their guests. Leaders in both sectors shared the belief that working together under one roof was the best way to represent members and serve the entire hospitality industry. Nevertheless, each side had concerns about losing their identity as associations. They already had their brands. Ahmed said they needed to address those concerns before they could move forward with the merger. In 2015, WLA and WRA signed a joint operating agreement and got to work on creating a unified brand in anticipation of launching a combined association. A rebranding task force made up of restaurant and hotel members was assigned responsibility for proposing a name for the new organization and hiring a consultant to design a new logo and help develop the new brand. 22 │ wahospitality.org
After a competitive RFP process, the task force selected Daniels-Brown Communications, an advertising, public relations and design firm based in Olympia, for the project. Stephen Daniels-Brown, the co-founder of the company, said the branding task force members didn’t fight for their respective hotel or restaurant ideas or regional preferences, but were great caretakers of the process to align everyone to the goal. “You get some very strong opinions about the form and function of the brand,” Daniels-Brown said. “What matters most in a brand is the brand reputation.” The Daniels-Brown team worked with the task force, association staff and members of the combined board as part of their creative process. They also interviewed stakeholders. “We looked at what other states called themselves,” Ahmed said. “We had a conversation about ‘What are we?’” Lane Hoss, vice president of operations for Anthony’s Restaurants, was also on the task force. She remembers how the group wanted to focus on two main points in branding. The first was to focus on the strengths each group brought to the new organization, and then to communicate this new identity to the general public. The second point was to make sure the brand and logo encompassed the whole state, not just certain cities or locations. A brand isn’t just a logo. It is who you are as a business and what people think about when they think about you. “One of the challenges we had was to come up with a name that wasn’t 25 words long,” Hoss said. She said they talked about trying to combine the two separate names. They were very long and didn’t encompass all of the businesses
they wanted to serve. Finally, the group took a look at what restaurants and hotels had in common. “We’re all about hospitality. We’re all about serving the guests,” she said. Daniels-Brown agreed there were some divergent views on the name, but hospitality won “because of the warmness of that.” In a board workshop, Daniels-Brown helped board members and staff articulate the characteristics of this new association. They wanted the brand to reflect that the new organization would be a supportive, responsive member resource and a powerful, unified and credible advocate. It would be deeply connected to the communities it serves, and it would be inclusive and welcoming. Ahmed said both sectors profoundly connect with their communities. The nature of the hospitality industry relies on customer loyalty. Everyone has a favorite bar, restaurant or hotel they return to in their neighborhoods or at their favorite vacation spot. Hotels and restaurants not only give their guests great experiences, but are committed to their communities. Holding fundraisers for their favorite causes is one of the many examples of this. Hospitality is the largest employer in the state.
The task force wanted our logo to be approachable, of the people and easily identifiable as from the state of Washington, rather than Washington, D.C. It was presented with several logo options, and the logo used today was the standout favorite. Hoss said she felt the colors translate the landscape of the whole state. Daniels-Brown created a mark that reflects the unity of our diverse businesses and cultures. The team incorporated a W made from triangles of various sizes to represent the different types and sizes of member businesses. The colors reflect the geographic diversity of membership: the blue represents the state’s rivers, lakes and ocean, the green expresses the color of our forests and trees, and the orange embodies Eastern Washington and our golden summer evenings. The words Washington Hospitality Association appear, not an acronym. The Association has committed to using the powerful words in the name, not an abbreviation. If you are creating a new brand from scratch, Hoss and Ahmed had some words of advice. Hoss said to make sure you are coming up with something short and straightforward. “It should speak to who you are,” she said. If you are a casual restaurant, your brand and logo should reflect that.
“We need to be a leader in the community,” Ahmed said. The committee had a few guidelines for Daniels-Brown when it came to the logo. There should be no pineapples, forks or bells, no seals or emblems and no acronyms. There are many brands out there in the hospitality industry that use these images, and they wanted to avoid any confusion.
She said to figure out what is the heart and soul of your business and how you want the public to view it. “Hear everybody’s concerns,” Ahmed said. “Whenever you have stakeholders, listen to every one of them. Be open to everyone’s ideas and keep an open mind.” October 2018 │ 23
GDPR and the Hospitality Industry What Washington restaurants, hotels and hospitality businesses need to know about the EU’s new data protection law. By Radhika Prabhakar, Locus Legal Solutions PLLC
In May, the General Data Protection Regulation (GDPR) passed by the European Union went into effect to protect the individual personal data of individuals residing in the EU. This new regulation has spillover effects beyond Europe and will impact businesses around the world that have European citizens as customers. What is personal data under the GDPR? The GDPR defines “personal data” as any information relating to an identified or identifiable person. This includes an individual’s information related to their location, any online identifiers such as IP address and other metadata. “Anonymizing” data—rendering an individual anonymous in your data set— is a critical part of GDPR compliance. To whom does the GDPR apply? The GDPR not only applies to organizations located within the EU, but also to those outside of the EU if they offer goods and services to, or monitor the behavior of, EU residents. The GDPR applies to all companies processing and holding the personal data of individuals residing in the EU, regardless of the company’s location. The GDPR covers most American businesses, particularly businesses like restaurants and hotels in the customer-facing hospitality industry. It also applies to any American business with a website that an EU resident might visit. 24 │ wahospitality.org
How does the GDPR specifically affect restaurants and hotels? The GDPR regulates the use of personal data, so it is likely to have more impact on industries that have direct contact with consumers and therefore process consumers’ personal data as part of their activities. It will particularly have an impact on all direct marketing and advertising operations, as well as on loyalty programs common in the hotel and travel industries. Many businesses in hospitality hold personal information in sales and marketing databases. Information may be collected directly from individuals, but also through other avenues like marketing agencies. Many such businesses also use website and email tracking tools to help target marketing campaigns. Additionally, hospitality businesses hold large amounts of personal information on their workforce – whether they are direct employees or engaged through contractors. The GDPR requires organizations to review the personal information they hold, the reason it is held and the organization’s policies and procedures for handling that information. Organizations should perform a review to ensure that they collect and use information that is GDPRcompliant. GDPR specifies that consumers must explicitly consent for their personal information to be processed and used by third parties. In the hotel context, contrary to current practice, under the GDPR a hotel guest’s information cannot be used for marketing purposes or disseminated to third parties without that guest’s written approval. Guests need to explicitly opt in to having their data collected and shared. Any documentation a hospitality business uses with regard to its consumers must be very clear about its purpose.
The GDPR doesn’t just apply to activities at a hotel or restaurant. It extends to booking systems and revenue management software. If, for example, a hotel uses a cloud provider to store, process or transmit personal data of EU residents, and that data is compromised by that provider, the hotel may be held liable for the breach.
•
How can your business comply with the GDPR? Given all the above, restaurants and hotels must be vigilant in ensuring GDPR compliance. Here are a number of measures businesses can take to monitor GDPR compliance:
•
•
• • • • •
Understand what personal data your business is collecting. Work with your tech and marketing teams to create and maintain an information register that monitors personal data collected and documents what, where, why, how, and with/by whom such data is processed. Consult with a lawyer to determine a solid legal basis for your data collection and processing activities. Ensure that all data collection forms and privacy policies and notices are in line with the GDPR provisions. Anonymize data to protect the guest’s privacy. Thoroughly review any Client Relationship Management (CRM) systems and third-party marketing tools for compliance. Implement data governance policies and provide training to personnel to ensure the business operates in accordance with GDPR requirements.
Review any supply chain arrangements with data processors, such as marketing and recruitment agencies, delivery fulfillment and/ or booking systems. Should a breach occur and personal identifiable information is stolen, notify affected customers within 45 days in accordance with Washington state’s data breach notification law, which was strengthened in 2015. (Learn more at wahospitality.org/time-to-take-cybersecurity-seriously.)
Why is compliance critical? The GDPR allows for punitive fines on non-compliant companies posing a risk to EU residents and their privacy, and the fine per violation can be up to €20 million ($24 million) or four percent of the companies’ global revenue for the prior fiscal year, whichever is more. The GDPR is a new and broad framework to protect consumer data in our increasingly digital world. We urge you to protect your business and ensure compliance with the GDPR. Radhika Prabhakar is a business law attorney with Locus Legal Solutions in Seattle. She advises startups and established businesses on a range of legal needs including intellectual property, privacy and corporate law issues. Radhika focuses on the travel, hospitality, food & beverage and retail industries as they intersect with technology. She can be reached at radhikap@locuslegalsolutions.com.
October 2018 │ 25
Authenticity Matters: Why Showing Up for Your Audience Will Catapult Your Personal Brand By Kathryn Coffman, Fashionably Frank Marketing
Our cognitive brain takes four times as much time to process sensory information than our emotional brain, according to a recent article on the science of emotion in marketing. A study that analyzed successful advertising campaigns discovered that campaigns with solely emotional content performed twice as well (31 percent vs. 16 percent) as those with just rational content. Both of these findings underscore why staying closely connected to the emotions behind our marketing is key. The personality and the storytelling behind our brands matter the most. When you think about marketing, a few outdated lessons may cross your mind, lessons that you were told to believe as the-one-and-only-truth years ago, but that have since phased out of the current digital marketing trends. “Banner ads and SEO singlehandedly determine your success.” “Social media can’t be meaningful unless there’s a dollar behind it.” The list goes on. However, new marketers emerging onto the scene today are suggesting a new way of viewing online marketing and it involves a single buzzword: authenticity. As a digital marketer myself, I am focused on forming quality relationships and meaningful connections in the digital space and authenticity is the key to my clients’ (and my own) success. Showing personality and engaging an audience with a feeling has proven itself to be the most innovative and refreshing way to increase brand awareness during the age of ad oversaturation. The same technique can be applied 26 │ wahospitality.org
to personal brands as well – the brand of a single person as opposed to a company or organization. Here are a few tips to get those creative juices flowing, strengthening your personal brand. Your secret sauce is your best superpower. “Secret sauce” is a catchphrase used often by marketing guru Jenna Kutcher to explain the unique characteristics or preferences of an individual that sets them apart from everyone else— this consists of your personality traits, your style of working and communicating with others and your talents, mixed with random fun facts about you that will stay in your audience’s mind. Jenna Kutcher, for example, is a mac and cheese lover, yoga pants wearer, body positivity advocate and dog person. Her audience knows this well because she makes sure to include these fun facts within her posts (even if that just means sharing a tip on the most amazing mac and cheese she recently discovered at a restaurant down the street). At the end of the day, there are millions of people posting on social media just like you, but they don’t embody exactly what you can offer with your charming wit and infectious positivity. In the wise words of Jenna Kutcher, “You just have to take the right steps to make sure YOU are the one people remember. You absolutely MUST believe that a saturated market does not imply an end.” Go live and do it often. Utilizing social media, especially Instagram and Facebook to “go live” (live video) and populate your “Stories,” will give your audience an especially intimate behind-the-scenes view of your day-to-day life. Stories allow you to share in-the-moment happenings— they’re more successful on Instagram, but also offered for your Facebook page, too. You can share photos from your phone’s camera roll, or take video and photos during an
event to share where you’re currently located, inviting others to join in on the fun! Live videos can also be used during events, but they’re often best used in controlled environments when you can sit down and truly teach your audience something, share a funny story or open up about something you’ve been experiencing lately. The only way you’re going to get a loyal audience is to be vulnerable and to be that way often. Talk about what matters most. Everyone is passionate about a cause near and dear to their heart, right? I already know that you put your community first – without meaningful community, the hospitality industry doesn’t thrive. Leverage what you love the most to make a connection with your followers. Love animals? Talk about how you visited the shelter last month and saw all the cute animals you wanted to call your own! Or perhaps you prioritize supporting children and education initiatives. Share this with your audience, too, by pushing for an important policy or encouraging donations to a non-profit doing the good work. By sharing these further vulnerable thoughts, you are reaching out to people who share your specific values and goals. Keep everything in balance. Want to know the four types of content you should ALWAYS aim to share with your audience? Here it goes: Inspirational, educational, interactive and behind-the-scenes. Now, some of these aspects may meld into one greater post, but generally, you should strive to keep a balance of these four throughout your feed. “Inspirational” means sharing positive, inspiring quotes or motivational words and content you find touching and meaningful. “Educational” involves sharing a how-to lesson, a little tidbit you learned while going about your job or
daily life (just like that mac and cheese recipe from Jenna Kutcher). “Interactive” involves your audience, encouraging them to use a hashtag, share their thoughts on a topic – perhaps a highly-debated ingredient in your latest favorite dish or maybe even a movie you saw the other day. Finally, behind-the-scenes is exactly what it sounds like – with your family, your animals, your hobbies. By balancing these categories, you’re able to produce a rotation of fresh, interesting content, showing your audience the utmost dedication. As early as 2014, audience members of businesses producing services or products ranked their likelihood of trusting a brand in 12 global industries. At a whopping 91 percent, honesty was the vehicle for trust—and revenue—when speaking about companies these individuals chose to follow. Authenticity now delivers higher ROI than any other factor of your marketing. We see this play out in the world of “micro influencers” – individuals with smaller followings who are now highly sought after by brands, more so than celebrities and major influencers, because time after time studies have shown us that people are more likely to trust micro influencers than celebrities when making decisions because they are considered more trustworthy, more invested in their craft and closer to being “similar to everyday people” (so much so that they deliver 60 percent higher engagement in campaigns!). The next time you’re drafting your social media plan, consider these easy techniques to strengthen and elevate your personal brand. Leading with intention and honesty while crafting your social media presence cultivates a longlasting audience and endless opportunities for your career. Kathryn Coffman is a digital marketing consultant based in Olympia. She helps creatives leave an impact in the digital space and offers full-service digital marketing management, web design and branding through her business, Fashionably Frank Marketing. October 2018 │ 27
INDUSTRY CALENDAR October/November TRAINING Oct. 25
ServSafe® Manager, Spokane
Oct. 29
ServSafe® Manager, Everett
Nov. 6
ServSafe Manager, Seattle
Nov. 12
ServSafe® Manager, Kent
Nov. 15
ServSafe Manager, Tacoma
Best Western Lakewood
Larkspur Landing Hotel, Renton
Boyd Bars, University Place
Leader Block Wine Co & Eatery, Ferndale
Brandywine Bar & Bottle Shop, Spokane
Mermaid Inn & RV Park LLC, Long Beach
Convivial Café, Mercer Island
Moxy Seattle Downtown
The Crumpet Shop, Seattle
Queen City, Seattle
Dairy Queen, Bonney Lake
San Blas Mexican Restaurant, Puyallup
Gyro & Kebab Grill LLC, Kennewick
Seeds Bistro & Bar, La Conner
Hollywood Tavern, Woodinville
Smokin’ Pete’s BBQ, Shoreline
Homegrown Sustainable Sandwiches, Seattle
Sugar + Spoon, Seattle
Hops N Headz, Bellingham
Tides Inn & Suites, Port Townsend
Larkspur Landing Hotel, Bellevue
The Victus Group, Fresno
®
®
MEETINGS Oct. 10
MSC Sub Committee Meeting
Oct. 10
Seattle Restaurant Alliance Board Meeting
Oct. 11
Seattle Hotel Association Board Meeting
Oct. 16
Spokane Hotel Motel Association Meeting
Oct. 23
Finance Committee Meeting
Oct. 23
Spokane Chapter Board Meeting
Oct. 30
Washington Hospitality Board of Directors Quarterly Meeting
Oct. 31
MSC Board Meeting
Nov. 6
Education Foundation Board Meeting
Nov. 6
Executive Committee Monthly Meeting
Nov. 7
Seattle Restaurant Alliance Membership Meeting
Nov. 8
Seattle Hotel Association Board Meeting
Nov. 8
Seattle Hotel Association Membership Meeting
Nov. 13
Renton Government Affairs Regional Meeting @ Hyatt Regency Lake Washington at Seattle’s Southport
Nov. 14
Retro Trustee Meeting
Nov. 14
Seattle Restaurant Alliance Board Meeting
Nov. 15
MSC Sub Committee Meeting
Nov. 20
Spokane Hotel Motel Association Meeting
Nov. 20
Spokane Chapter Board Meeting
UPCOMING EVENTS Nov. 1113
NEW MEMBERS
Washington Hospitality Convention at Hyatt Regency Lake Washington at Seattle’s Southport
28 │ wahospitality.org
NEW ALLIED MEMBERS Brown & Brown Insurance of WA, Inc. Alex Nephew anephew@bbseattle.com 1501 4th Avenue Ste 2400 Seattle, WA 98101–3631 206.956.1600 www.bnbseattle.com
MMSPARC LLC. John Harrington PO Box 5021 Spanaway, WA 98387-4067 253.330.7290 mmsparc@gmail.com www.mmsparc.com
Brown & Brown of Washington is the 4th largest retail insurance company in the US. We are a full service insurance brokerage that can handle all your hospitality insurance needs. Starting with the construction to the property and liability insurance, employee benefits, and continuing as your professional advisor.
Coil Cleaners is a refrigeration, ice machine, and HVAC cleaning business that focuses on a deep cleaning and sanitizing to the systems you may have. We clear mold, grease, and debris from the coils that keep your products and customers clean and cool. Preventative maintenance with a quality focus to help your business save money and stay running efficient in the kitchen and hot seasons. Special offer: 10% discount for rates
Put your best
fish forward. Food waste is bad enough. Contamination is worse! How do you stop a bad fish from reaching the table? You make sure that your line staff knows the rules, knows how to how to detect bad product, and absolutely knows how to rotate your walk-ins so that you are always putting your best ingredients on the plate. Do your people know how to do that? Let’s hope so. Safe service is good service. ServSafe is the best service. Train your staff today!
VISIT WHAEF.ORG for more info.
SERVSAFE MANAGER HOSPITALITY TRAINING SOLUTIONS ServSafeManagerhalfPageAd.indd 1
4/12/2017 1:11:01 PM
Ask the Expert
Making Money in a Growth Economy By Rick Braa, CHAE Part two of a two-part series. With all the changes in the industry, especially with competition, wage growth, and labor shortages, what are the characteristics of businesses making money? The restaurant industry is hitting a saturation point in many markets. Part I of Making Money in a Growth Economy pointed out some of the financial disciplines of profitable companies: high sales per square foot, beverage sales at 30 percent or better, prime cost of less than 60 percent and optimized business hours. There are several other disciplines profitable operators have in common: There is strict adherence to systems. Great systems are a requirement. From POS to business intelligence software, there are affordable systems for understanding guest behavior and profitability. Given the ease of access and affordability of these systems, it is imperative to interact with data daily. The most financially successful restaurants have managers and owners who use information daily and manage a key set of metrics. Useful information is based on the five P’s of the business: engaged people, happy patrons, forward-looking planning, a spotless property and stellar profitability. Keep information front and center in all these areas and turnover will be lower, guest traffic will increase, the business will move forward, employees and guests will have a safe and clean place to be, and profitability will flow. Owner involvement is intense. The people who care the most for a 30 │ wahospitality.org
business are its owners. Most restaurant owners grew up in the restaurant business and worked through the ranks to ownership. Eight out of 10 owners started at the entry level, and they understand the vision and direction their businesses need to travel. Successful owners insist on continuing to improve to their business, and they develop plans to share the business by providing ownership opportunities to key employees through valueappreciation plans, profit-sharing or phantom ownership. They build an ownership mentality and continuously impart knowledge to operators, sharpen focus on the guest experience, insist on precision and build speed in the culture to maximize labor spend at all levels and keep product offerings fresh and facilities opening-day fresh. The most successful owners bring an intensity to their organization in strategic areas and clear decision making. Value equation is right. When the value equation is correct, guests perceive the value is equal to or better than the price. With value, guest counts grow. The key is matching what is offered to what is expected for the price. Finding the balance between growth and check average is the challenge. For example, if guest counts are growing and prices increase and guest counts still continue to grow, the elasticity point hasn’t been reached. If guest counts begin to sag, prices have exceeded value perception, so the solution is to introduce new products at a lower price
to attract more traffic and then focus on converting new guests to regulars. Regardless of approach, evaluate the value equation and keep it in balance. Overhead is lean. The only source of revenue in a restaurant company is operations. Every other area is overhead and a cost center. Operations rules and all other activities should support operations. Overhead employees cost money. When overhead grows, projects grow and money is needed for those projects. Having nonoperations employees will cost more money regardless of function. They often need help from industry experts, which in turn costs more and drains resources. Keeping overhead lean and shared as much as possible is particularly important. Outsourcing or sharing resources brings higher levels of competence that can’t be afforded when using an in-house staff. Keep overhead limited to operations, and outsource everything else. Having a strong team to support and focus on the success of operations must be the center of all decision making. Consistently measure and apply discipline with systems, constantly monitor value perception, keep ownership intensity with lean overhead and financial success is sure to follow. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability. For more information on improving profitability and driving sales, contact AMP Services at rbraa@ampservices.com.
Music Licensing Issues? We Have Solutions! SiriusXM Music for Hospitality Businesses Providing Legal & Fully Compliant Business Music Streaming Products and Services Exclusive for Washington Hospitality Association Members
1-888-318-5420 www.SiriusXM.com/WAHospitality
Introducing the SiriusXM Music for Business Program The Washington Hospitality Association has teamed up with SiriusXM Business to provide a background music program specifically for Washington Hospitality Association members. The program is packed with member-only benefits, discounts, and over 100 channels of music from the biggest name in the business.
SiriusXM Business Music Program Member Benefits
FREE SiriusXM Business Internet player ($150 value) Low, no contract, month-to-month only: $24.95 All icensing costs included – ASCAP, BMI, SESAC, & GMR Further discounts on commercial audio system hardware
SiriusXM Music for Business is perfect for: Restaurants
Hotels
Retail Spaces
Bars
Lobbies
Spas
ONLY
24
$
.95 /mo
MONTH-TO-MONTH NO CONTRACT