The restaurant industry is optimistic but cautious about the future. The impact of rising commodity costs, gasoline, global unrest, and stubborn unemployment numbers can rattle consumer confidence and send patrons scurrying back to their own kitchens to hold onto their savings accounts. What’s a supplier to do?
Cost containment has been and should be an ongoing practice, but we believe that attention must now shift in a more focused and systematic way to revenue growth. Flat sales hurt financial performance more than rising costs. If a 5% growth rate is required to break even against rising costs, a shortfall gain of 4% requires 25% more cost reductions to meet the breakeven point.
Now factor in your company’s close ratio on new business. To avoid a direct hit to your bottom line, the profit from accounts that are won must carry the costs of those that are not—as well as other expenses that cannot be passed on to your selling price.
The ratio of customer wins to losses needs to improve. The recession provided an opportunity to uncover gaps in customer needs. The best suppliers use this knowledge to reinvent strategy, operations, innovation and organizational resilience—and are reflected in new revenue-generating behaviors. Here are a few broad-stroke examples:
- You have sharpened the account targeting process. This undervalued step frees up selling time to focus on best-chance opportunities and nail new volume quickly.
- At least 50% of your customer generation team is objectively rated as experts; in other words, they position your company’s offering with a razor-sharp value message, are unsurpassed in preparation, problem-solving, presentation and customer management skills. You have a systematic plan to transform remaining members into experts over the next 6 months. By developing experts, you dismiss the false assumption that customers form emotional attachments to sales managers that translate into new volume for your company.
- Your company’s value proposition has been tailored to today’s customer objectives to reduce food costs, labor costs and eliminate deep menu discounts.
- Your company carefully evaluates which industry functions provide the best use of sales time compared to other forms of account interaction. Let the results speak on this one.
- Your company outranks competition in highest value revenue-generation activities. This is from the customer perspective, not your company’s internal metrics.
- You as the CEO are directly involved in reviewing account targets currently on the table, asking the right questions about how or why they got there, the probability of close, and know the costs of getting business but of doing business. .
- The sales sludge has been removed from the pipeline, including some high profile targets that take years and substantial resources to close. Replace them with qualified accounts in new segments that spread risk and expand your company’s knowledge of emerging players.
- You have instilled confidence in current and prospective accounts that your company understands their competitive environment as well as your own and conform your value proposition to suit their objectives.
