REACTION MANAGEMENT MARKETING
by Jon Taffer

What business are we in? Hospitality? Food & Beverage? Service? Entertainment? Environment? Meeting Place? Those are the answers found in all the university textbooks and management training programs. In fact, as an industry, our entire focus lies within these priorities and I think that’s wrong…dead wrong.

Everything we do is a process, never a result. Each process must establish a positive emotional reaction. That reaction is our product.

For example, entrées are not products. They are vehicles to establish a reaction. When a plate hits a table if the guest does not react to it, the plate/presentation failed. Success is only achieved when a guest reacts to the plate. Therefore, the reaction is the product, not the plate.

This is a significant difference in management approach. Rather than the chef designing a plate as a function to itself, we need to first determine the reaction needed from the plate. Then, the plate is designed to establish a reaction that will drive success.

When a plate or cocktail is served, the guest should visibly react. He will sit up straight, look at the other plates with entertained eyes, and otherwise display a positive reaction to it - physically and visibly. That reaction is the single most important driver of success, and therefore the true product. Accordingly, operators would do well to examine the design of every plate, drink, and product possible, to maximize the guest reaction of each.

• Pubs do not serve food; they create reactions through their food. The reaction is the product that drives success and the food (specification and presentation) is only the vehicle for creating that reaction. If no positive guest reactions are created, the plate/presentation is a failure.

• Nightclubs do not play music; they create reactions through music. The reaction is the product that drives the success of the music program (or entertainment format). Selected tunes and sets are the vehicles for creating reactions only. If no positive guest reactions are created, the music program is a failure.

• Marketers do not design and buy advertising; they must create reactions from the advertising messages they create. The reaction is the “product” that drives success in advertising. If no market reactions are created by the advertising program, it too is a failure.

• Promoters do not develop promotions; they create reactions from their promotions and events. Guest reactions are the product that drives success and the promotion, event or program is only the vehicle for creating that reaction. If no positive guest reactions are created, the event or promotion is a failure.

• Designers do not design space; they create reactions from the space they create. The reaction is the product that drives success and the design elements are only the vehicle for creating that reaction. If no positive guest reactions are created by the design/space, it too is a failure.

As other operators, developers, and marketers are working on their processes (product in-product out), you can move ahead by focusing upon making sure that each process (menu, products, development, design, entertainment, etc.) achieves the specific objective of creating guest reactions. I believe that operators who create the greatest guest reactions win, while the others are stuck in mediocrity.

When you embrace reaction management and focus upon building elements of your business, products, and service that truly sets you apart, everything can change. You’ll never design a concept, facility, promotion, cocktail, or plate presentation the same way ever again. You can’t help but work on your business, not just in it.
In the next three issues of The Publican, each of the following three steps to help your revenue grow will be expanded upon:

Step One: Maximizing Sales per Guest 
Start your revenue growth plan by maximizing the sales potential of every customer you already have. You can increase your revenue by up to 18% with some simple but powerful merchandising and internal marketing programs. With this first step complete, your “sales potential per guest” will be properly supported with merchandising and other programs that will significantly increase your sales results from any promotion, marketing, meal period, or late night.

The beauty of these internal programs is that they cost little or nothing, but significantly increase sales performance every time. With this foundation of maximized customer sales results, your business is ready to increase customer visits.

Step Two: Increasing Customer Frequency
Increasing your guest frequency by only one visit per month can boost your revenue by up to 12%…wow! All marketing research proves that increasing frequency with your existing customers is easier and far cheaper than marketing to new customers. So, with your sales potential per guest maximized, step two will focus upon building your customer frequency with tactics that can get you that powerful extra visit each month.

Step Three: Attracting New Customer Visits
New customer marketing programs are more costly and challenging. They’re also critical to sustaining the life of your business. Your business should not be investing in costly new customer programs until solid sales building tactics and frequency programs are in place - real ones that work. Once you have solid check building and frequency programs in place, your business is ready to fully benefit from step three: new customer marketing.
Don’t let anyone complicate this. New customer programs simply convert prospects to new customers. There are many ways to do this. Some are very expensive, others can be totally free.

The Power of Creative
Marketing at its simplest is two separate functions: developing compelling creative, and developing ways to communicate your message. All successful marketing is driven by enticing creative that causes reactions in the desired audience. If it didn’t create a reaction, it would not be successful.
The same is true for internal marketing and merchandising. When we marketed “Blue Hawaii” shooters at the Hollywood Palace, they failed. When we changed the name of the same drink to “Blue Death”, they sold like crazy. The idea/creative was more powerful than the drink itself, just like the creative is more powerful than the advertising itself.

A commitment to great compelling ideas and creative can sometimes be an exhaustive process until we develop promotions, wording, graphics, hooks, offerings, and product elements that we believe are powerful enough to attract our target audience. We must fully believe our creative ideas and messages will compel our target audience to respond.

The Power of Your Four Walls
It takes a great business to achieve great results. The most powerful of all marketing results comes from a great experience. A well defined and managed operation provides a platform for the growth of the business. Your facility, concept, staff, products, and overall experience must create solid reactions in your guests. 

The Power of Realistic Objectives
Too often, marketing and sales objectives are too broad and spread over too much time. Operators should define, assess, and grow revenue in two ways. These are:
1. Guest Counts. Positive guest count trends are a result of a good guest experience, and/or effective external marketing. Conversely, when an operation is experiencing a negative guest count trend (week to week, or month to month), the cause is typically a poor guest experience or ineffective/non-existent marketing. Guest count results are the pure measurement of business growth.

2. Sales Performance. A business can increase guest counts by 5%, but have a reduction in revenue. This can typically occur when staffing is lower than adequate. Sales per guest (or average check), is the result of internal merchandising, marketing and staff sales efforts, not marketing. 

Like building guest counts, operators should employ separate tactics, budgets, and efforts to increase sales per guest results. Sales per guest results are the pure measurement of sales performance.

Establish weekly sales and marketing objectives. For a pub that serves 600 people a week for lunch, or a nightclub that has 600 guests come on Fridays, establish a reasonable, weekly objective for guest count growth. For example, increasing guest counts by 1% a week would be an increase of only 6 guests each week. This is certainly a reasonable and attainable goal. However, even with such a modest goal, in only ten weeks you have increased your guest counts by over 10%. 

Short-term goals, short-term tactics and close tracking of your results are the benchmarks of marketing success. Once the weekly tactics are implemented, simply track your results and if you miss your weekly objective this week, you increase your activity next week. After 10-12 weeks, even if you miss your weekly goals a few times, you will still increase the guest count flow of your business very significantly.

Solid internal merchandising and marketing programs can increase your sales per guest by 10% to 12%. Add improved frequency and a guest count increase of 10% on top of it, and your business is off to the “promised land”.

Look for our Spring 2008 issue for Step One - Building Your Sales per Guest to learn secrets, tactics, and programs for menu merchandising, beverage merchandising, food check building, beverage check building, signature product merchandising, and sales building. 

Jon Taffer is founder and President of Taffer Dynamics, Inc. and the Neighborhood Marketing Insitute. He can be reached at 561-625-3225, or visit www.tafferdynamics.com. Back by popular demand, Jon will be speaking at the BC Hospitality Industry Conference on Monday, November 19 at 10:15 am.