November 10, 2015 by Speakers' Spotlight
Buffalo Wild Wings Wins By Choosing A Different Path
Now more than ever, business leaders are looking for fresh ideas, new understanding, and actionable insights to jumpstart their business. Denise Lee Yohn inspires, informs, and instructs them with a completely different way of thinking about their business. Blending a fresh perspective, twenty-five years of experience working with world-class brands including Sony and Frito-Lay, and a talent for inspiring audiences, Denise is a leading authority on building and positioning exceptional brands. Th following is an excerpt from her new book, Extraordinary Experiences: What Great Retail and Restaurant Brands Do:
Evolving your business to stay relevant to customers’ changing needs is critical. Case study pages are filled with stories of brands from Blockbuster to Sears that failed to acknowledge and adapt to disruptive forces in their industries.
But addressing new developments in ways that increase your differentiation and advance your unique advantages is just as important. Too often, companies respond to changes in predictable or generic ways. They see how competitors seem to be capitalizing on a new trend and they quickly release their version of the popular hit. As more and more brands start moving in the same direction, the market becomes oversaturated and undifferentiated. The trend produces diminishing returns for businesses and fatigue among customers.
Restaurateurs and retailers seem particularly prone to falling into this trap. Perhaps it’s because they rely so heavily on news to drive people into their stores with frequency. And because competitors’ moves are so visible, it’s easy to see what works for everyone else and then just follow along. It seems far less risky to follow a trend or an industry norm than to stick your neck out and be the first to try something different.
But that’s exactly what Buffalo Wild Wings does. CEO Sally Smith and her team are intent on challenging conventions. Smith told me that over a decade ago, they identified industry rules specifically to find those they could break. “These are not written-down rules, but they are generally accepted rules that surround the restaurant industry,” she explained. The premise was, “If you can break an industry rule, you can often gain a competitive advantage.”
They identified the “rule” about table turns — that is, the rate at which restaurants can move customers through their establishment by “turning over” a table. Restaurants usually work to get their table turn rates as high as possible so they can seat more people in a given period. It’s viewed as one way to generate greater sales.
Casual-dining restaurants have always struggled to find the balance between turning tables over quickly and providing a pleasant dining experience. But starting in 2008, with the Great Recession causing customers to spend less and therefore generate lower total checks per party, the industry placed greater emphasis on increasing table turns. Plus, fast-casual restaurants seemed to be thriving on higher table turns, so many casual-dining restaurants tried to imitate their model.
Buffalo Wild Wings decided to ignore the trend and break the table turn rule by encouraging people to stay in its restaurants longer. The chain wanted customers to linger not only so they would order more (higher-margin) drinks, but so they would enjoy their experience so much they’d return again soon. The company embarked on its brand mission to become “the ultimate social experience for sports fans”and started developing the “guest experience captain” position, a mini-stadium Stadia restaurant design, and technology-enabled innovations.
Smith and her team also tackled what seemed to be a rule about industry jobs. “When you think about the restaurant industry as a career or a place people can make a career, there’s kind of an industry rule that it’s a first-time job or a job of transition,” she told me. “Certainly, this industry has a reputation for a very high turnover.”
She and her team challenged themselves to identify what they could offer people that would encourage them to consider long-term employment with the company. As a result, the team re-conceived servers’ responsibilities and transferred ancillary duties to other positions so they could focus on doing what they do best — serving with speed, accuracy, and excellence.
They also introduced a new general manager recruiting process that involves candidate interviews with the corporate executive team. When executives spend personal time with candidates, it not only conveys how important the role is, but also helps to ensure a good fit between the individual and the job. By ignoring the restaurant job rule, Buffalo Wild Wings benefits from lower turnover costs and greater satisfaction from guests who enjoy being served by their favorite server.
Refranchising is yet another industry convention that Buffalo Wild Wings is ignoring. As companies look to expand while slashing expenses and paying off debt, they’ve stepped up efforts to sell off corporate-owned stores to franchisees. In a 2012 article on TheStreet.com, Darren Tristano, executive vice president of restaurant research and consulting firm Technomic, observed that refranchising was a growing trend because “a lot of brands are looking to bring capital in because they’ve been hurt by the recession. It’s an asset that they can convert to liquid.”
But Buffalo Wild Wings has been doing just the opposite, scooping up its franchised restaurants that have been put up for sale. Some industry observers say Buffalo Wild Wings is countering the refranchising trend in order to access the higher margins that company-owned units typically produce; others speculate that doing so will help the company roll out its new guest experience initiatives faster. Whatever the reason, it adds to the list of ways that Buffalo Wild Wings is breaking from the norm and making unconventional choices.