{Beginnings - Lane Cardwell, President, P.F. Chang's China Bistro}

Written for and distributed at the Marketing Executives Group, Chicago, May 19, 2011; 

Published in Restaurant Marketing Group's MEG Consumer Talk  

Lane Cardwell

President, P.F. Chang’s China Bistro

I have had a lot of beginnings lately.  In the past two years I have doubled the number of restaurant companies that I have worked for in the past 32 years.   I was recently the CEO of Boston Market, and have just joined P.F. Chang’s China Bistro as its president.  My other two restaurant companies, going back 30 years, were S & A Restaurant Corp. (Steak and Ale, Bennigan’s) and Brinker International.

It gives you a different perspective on our industry when you start fresh with a company after so many years in the business.  Let’s call it “nuanced naivety”.  You are naïve about the way that the new company that you have joined does business; however, you understand the nuances of the way that business is done in the restaurant industry.  It must be how a professional athlete feels when they join a new team after a long time in the league.  To be of value you must take what you already know and make it work within a team that you don’t know well yet.

I remember all of the new people that joined my earlier companies.  Full of questions (“why don’t we?”, “could we?”, “have we ever?”), lots of ideas, and challenges about the way that we have been doing business for a long time.  They were irritating.  It took us old hands several months to break these new people of their question-asking and mold them into one of us.  Some never could be taught the way that we did things and moved on to annoy some other company.  I never stopped to question the opportunities to reexamine our company and concept with fresh eyes that we may have missed.

I have been that irritating person over the past two years.  I am early into annoying my team at P.F. Chang’s with my constant questions about why we do things the way that we do them.  “Why did we decide that?”  “What else did we consider?”  “Is it working?  How do we know?”  It’s hard to join a successful team and a successful concept.  It’s easier to join one that is struggling.  It makes sense that you would question things in the struggling company, not so the successful one.

The one thing that I have noticed in most of the restaurant concepts that I have worked on is that the customer rarely gets a seat at the decision-making table.  They are paid great lip service, but rarely are consulted about changes to a brand that they make possible with their money.  Our front line employees talk to our customers every day.  They know what they like, don’t like, don’t understand, and what delights them. 

Somehow a lot of this information gets distorted or filtered as it drifts its way up the chain of command.  Sometimes we drown in the quantity of the information.  We try to capture it with customer feedback systems and formalized marketing research, but it’s like trying to report on local weather from across the country.  Nothing quite replaces stepping outside and looking up in the sky.

Every day decisions are being made throughout the industry about the care and feeding of our restaurant concepts.  Different departmental groups with different views of what is important weigh-in with their opinions.  Very different operating regions must often compromise by deciding on one approach, with the result neither exciting nor disappointing all of their guests.  Like the story of the three blind men trying to describe an elephant by touching its leg, trunk and side, each constituency sees the situation a little differently. 

There are three normal outcomes of a decision being made about a concept:

1. Good for the company, good for the customer (the proverbial win-win)
2. Good for the customer, not as good for the company (absorbing a cost, or adding a new service or offering)
3. Good for the company, not good for the customer (large price increases, quality cuts, concept elements being trimmed or deleted)
4. We will assume that good management would not allow something bad for both the company and the customer to occur (but sometimes they do)

I have learned over time that if you stay vigilant against letting #3 dominate (Good for the company, not good for the customer), everything else will tend to take care of itself.  Sometimes it is a lonely voice representing the customer when decisions are being made.  Often your co-workers are not even aware that the decision-making process is one-sided.  They don’t understand why something that cuts costs, or makes the restaurant run more smoothly can sometimes be a bad thing.  After all, aren’t we paid to take care of the company?

I always tell people that gravity works on restaurant concepts like it works on everything else…it pulls things down.  Usually a concept is at its best in the early years.  It is fresh, new, exciting, and pleasing the customer is an all-consuming activity each day.  As you grow you begin to look for efficiencies that offset the difficulty of managing 10, 100, or 1,000 restaurants remotely.  Programs are introduced.  Policies are spelled out.  Buying power and standardization are introduced.  When you add up the impact of all of these “efficiencies” over the years you begin to see the effects of gravity.  The concept is bigger, but not better, than it was in the early glory years.

Do you want to make a difference on the restaurant concept that you work on?  Every time a change is proposed, ask yourself whether it is good for the customer.  There is nothing wrong with something being good for the company, but is it also good for the guest?  If you can bring this mindset to the job every day you will be a success in the long run. Brand building is hard work and good companies want to be challenged on issues where the customer is not the winner. 

Do you find that your company doesn’t want to hear it?  Go find a good company that does.  A career is a terrible thing to waste, and you are wasting your time waiting for the inevitable decay that sets in when each flip of the decision-making coin comes up heads only for the company.

Let your own new beginning be the way that you think about each decision affecting your brand that crosses your desk, or is raised in a meeting.  It takes a lot of effort to hold on to the things that made your concept successful when it started, much less to improve it.  By being customer-centric you greatly improve your long term odds of success.

{The Start of Marketing and Operations Divide}

As we work in the area of Marperations, it is important to understand the origin of the marketing-operations divide. This understanding will help us figure out why operations cares so much about efficiency and why marketing has an eye single to effectiveness.

A look back in history shows that the 18^th and beginning of the 19^thcentury marked the rise of production. Producers focused their energy on producing more, making efficiency suddenly more important than ever. But the ongoing focus on efficiency came to a point where, in the1940s, production started to surpass demand. The country gradually evolved into a sales era to move surplus inventory. In order to bring more structure to sales, the concepts of marketing evolved and came into being in the 1950s.

From the start, marketing primarily came into existence to counter the effectiveness of operations. Since marketing came into being to sell surplus inventory, over promising and setting high expectations became common practice among marketers.

Marketing did not come in to build demand, but to work in tandem with operations. Operations had already put itself in a position of producing more than the demand required. Marketing was simply getting rid of the surplus as a profit.

There is still a divide today. Operations still wants to do more of the same thing, and doing more of the same thing is a complete no-no in the world of marketing.

The divide still runs deep; it is time for a Marperations approach to take over. Companies need to understand that marketing today can connect to consumers and help operations choose its product mix and production quantity. Marketing can influence the features and benefits offered by a product. Marketing can lead and support. Operations on the other hand, cannot be stubborn about its leadership. It too must open the doors to change and realize that they only way for the entire brand team to truly win is to make the consumer happy.

{Operations Focused Marketing: A Marperations First?}

Ever since the inception of the Marperations concept, I have been searching for  examples where operations completely defines a brand and marketing simply must reflect the differentiated operations. Last weekend I found an example where I would have least expected it.

I was in the Cherry Creek area of Denver waiting for a meeting. To kill time I looked for a place to get a cup of coffee. To me, coffee has become synonymous with Starbucks. So naturally I was looking for the nearest Starbucks when I came across a local coffee shop called Aviano Coffee, I walked in and immediately realized that this was a different kind of a coffee shop: the décor was modern, trendy, but unassuming and not in my face. They were not trying too hard.

I walked up to the counter and ordered my usual, a small cup of coffee with room for cream. My first surprise came when the coffee maker did not look surprised with my use of the word “small”, as in the Starbucks world, “tall” is the new “as small as it gets”.  Then he started making my coffee.

First he poured some hot water into the coffee pot, and then he ground some fresh coffee beans, fresh just for me. After that he poured the ground coffee in the filter and a little hot water on the coffee grounds, then he paused. I was anxious now. All I could think was, “Come on, pour the rest of the water and give me my darn coffee!”

That is when he explained, “I soak the coffee grinds for a few minutes first so that when I brew your coffee you get the best flavor.”

Now I was intrigued and thoroughly engaged in the coffee making process at Aviano Coffee, as the impatience in me was overcome with interest and curiosity. I was ready to play this coffee making game. A few minutes later when the coffee maker started pouring more hot water into the filter, he further explained, “The pre-soaking makes sure that any carbon dioxide or other gases trapped inside do not make it to your coffee.” I had not yet tasted the coffee but by now I was nearly sure that this would be the best cup of coffee I will ever have.  I was getting really excited to taste this special coffee.

Finally, he poured my coffee into a small cup, and again I was happy to notice that the small cup was actually small. As he handed me my coffee he said, “Please let me know how you like the coffee.”

I simply loved the cup of coffee. As I left the coffee shop I realized what Aviano Coffee had done to me: they had completely changed the definition of the best cup of coffee for me. All of a sudden I could see through the branding and marketing of Starbucks where branding was everything. I could see that the coffee at Starbucks is made by a high dollar machine that the barista simply stands behind and operates. Starbucks had suddenly become a production facility in my eyes where Aviano practiced the art of coffee making.

Aviano Coffee had no fancy branding. It was not trying to appeal to my five senses by building a store that follows the Disney principles where every interaction is planned and orchestrated. Instead they were simply making the best cup of coffee they could, just for me. Now if that is not pouring your heart into coffee, I do not know what is. It was not the marketing of the brand that intrigued me to try the shop. There were no coupons, no marketing stories, and no feel good charity promotions. Instead I discovered the shop on my own and they offered me an experience that was etched in my mind forever. The experience was simple yet detailed, nothing too complicated yet intriguing, very personal and simply memorable. When a brand has operations so breakthrough, marketing does not have to work extra hard to scream about the brand, instead it should simply take a back seat and showcase the experience.

Please do not get me wrong, I will still visit Starbucks as they have me surrounded where ever I am. But every time I get a coffee at Starbucks I will ask myself, “Hmm, why the machine? Why not hand grind? Did you release all the bad gas? Did you soak the beans? Did you give me a small when I wanted a small? Did you make me feel that I just had the best coffee I could have?”

Brands like Aviano Coffee are few and far between, but they are out there and deserve a place in the Marperations hall of fame.  Next time you are in Denver, venture out to the Cherry Creek area and try Aviano Coffee for yourself.  Let me know what you feel. And if you have experienced a brand that has broken all paradigms for you, please share your story with me too.

Please note: ZenMango has no connection with Aviano Coffee. In fact they do not even know that I am in love with them.

{Focus on the "real people" of your brand}

Pizza Hut goes for slices of real life with employees in ads

 By KAREN ROBINSON-JACOBS / The Dallas Morning News 

In an era when ordering a pizza doesn't necessarily involve human contact, using workers in ads reinforces the message that "these are genuine human beings who are making these pizzas," said Arjun Sen, president of the Colorado-based Restaurant Marketing Group. "For Pizza Hut it's a great strategy to say, 'Our employees: That's the difference.' It ... is celebrating the employee. It's team building."  click here to continue reading

{The Price-Value Equation and Golf}

Arjun Sen was featured in the November issue of PGA Magazine as the expert source on price and value in Don Jozwiak's cover story article. The article keenly applies to industries outside the golfing realm and is well worth the read. Click here to jump to the article.

"Given the current economy, pricing is a hot topic across the golf economy. Knowing what value a golfer expects a given offering - from a round of golf to a lesson or a golf vacation - is an important step in determining how to set prices. That's the firm belief of Arjun Sen, a marketing expert with more than two decades of experience in consumer research and strategic planning..." continue reading

{Does Sports Marketing Really Work?}

 It was a pleasure and honor to moderate a Sports Marketing panel at Dine America hosted by QSR Magazine. We had a great team of panelists that included Tracy White, Senior Vice President, Sales and Marketing, and Chief Sales Officer for the Atlanta Hawks, Atlanta Thrashers and Philips Arena; John Kittredge, Fabri-Kal; and Bruce Skala, VP, Taco Mac. 

Based on the lively discussion among panelists, I arrived at the following five take-away's:

Right fit for the brand
It was very clear that finding sports that are the right fit for the brand is the first step.  Brands should not just go for what is available as this is an area where effectiveness is more important than the efficiency.  To identify fit, there are three areas a brand must look at:

• Fits the brand’s target audience
• Fits the brand’s personality
• Connects with the brand’s target audience

Size of opportunity does not matter

A common thought is that only the big players can play in this field since it is important to play at the highest level.  Based on the panelist discussion, that assumption is not true.  Instead, brands need to find the team that fits best, both the brand and the brand’s budget.  It may mean a less known national sports or a local event or team that could be the perfect fit for a brand.

“Internal Activation” is the key

Getting rights to the coolest sports property is not good enough.  Instead, a brand must make plans to activate the property to market it within the store. When planning a partnership, a brand must allocate key resources for the activation phase, as even a partnership with the coolest property on the planet needs successful in-store activation to bear fruit.  Activation includes using the property (logo and signage) within the store, communicating to customers, and getting team members excited about the partnership.

While measuring ROI, having a clear call to action and patience is the key

Just like any marketing effort, there is no clear answer to the question “does sports marketing really work?”  Instead a brand must compare the sports marketing opportunity to traditional opportunities to identify which has a better chance of sticking with customers.  In many industries where short term performance alone is the key, it is important to develop realistic time lines for the partnership, as it will take continuity to build a partnership.

Maximize your brand’s efforts by continuing to differentiate
Just like in any marketing communication, a brand must continue to strongly brand its sports marketing partnership. This is an opportunity to create something memorable and not just place a brand’s logo next to a sports team’s logo.  Creating memorable association both in communication and events will make this a big success.

A big thanks to Blair Chancey, Editor of QSR Magazine for giving me the opportunity to moderate this panel and for putting together such a great conference.  Should you have any comments or questions, please contact me at arjun@zenmango.com.

{Arjun Sen Published in AdvertisingAge: Keep an Eye on the Back Door}

Understanding Why Customers Leave May Be More Important Than Understanding Why They Come

by Arjun Sen
Published: September 01, 2010

CMO Strategy Column, AdvertisingAge 

The cost of acquiring new customers can easily add up to five times that of retaining current customers. In the new world of marketing, where CMOs are more cost conscious than ever, a focus on customer retention is a necessarily logical pursuit.

This isn't just my opinion; we've done the research to back it up. Our company recently completed our fourth annual study of the restaurant industry, the Leaky Bucket 2010. The study analyzes the return intent of customers to a restaurant brand. Conducted in March, the study included 2,483 respondents and analyzed more than 146 brands. Our methodology analyzes a brand's leak score. The higher a leak score, the more customers that brand is losing; lower leak scores indicate a higher level of customer retention. For the fourth year in a row, the study results overwhelmingly indicate that brands that invest in guest experience retain more of their customer base and can thereby reduce marketing expenses and increase profitability...

click here to continue reading