Food Service Marketing Blog Articles

Guerrilla vs. Gorilla: Independent Restaurant Operators Adopt Guerrilla Marketing Tactics to Shake Off the Chains

Independent restaurant operators represent the American Dream to its finest core. The individual distinction and character the independent restaurant operator brings to the American consumer, should never be outwit by the chains that daunt them. In the 1970’s the independent restaurant held a commanding 85% of the market share. During the 1980’s, chains perfected their strategies through their own survival, and mastered their ability to identify with consumer demand. Today, chains now hold 88% of the market share, leaving independents scrambling to find their voice in the industry.

In times like these, independent restaurant operators are finding themselves tough squeezed by the ever-growing restaurant chains. In some areas of the country, independents have gone out of business faster than the national failure rate, because chains are capturing the majority of the market share. While chains measure consumer demand in terms of macro-economics based on large audiences, independents adopt their strategies based on local or regional demand. When independents let their guard down, they pay for it!

Enter the independent restaurant guerrilla. Jay Conrad Levinson, author of "Guerrilla Marketing" defines a guerrilla as “one who adopts frugality and thrift.” In this essay, we apply this term to the independent restaurant operator and how he adopts “guerrilla” techniques into his everyday working logic. This essay isn’t about pointing out ideas of “try this or try that,” rather it centers its attention on the overall working schematics of what an independent restaurant operator is, and how they can embrace their individuality to their advantage.

Traditionally, chains were not considered a major threat to independent restaurant operators because they were always considered to be fast food. Everyone knew exactly what they were going to eat before they got to the restaurant, and had a good idea of what they were going to spend. The drive-thru windows became symbolic landmarks that people lined up for (which is still the case), but radically different. Chains are now very prevalent in the fast-casual market, and continue to grow into the middle price range of demographics. Restaurant “rows” are confining metro diners in many parts of the country, causing chains to cannibalize their own markets to gain market presence.

It all comes down to money. When chains have large national advertising campaigns, buying power with suppliers, and celebrity or name brand recognition to solidify their position in any given market, the independent operator is always at a disadvantage to compete. The key is finding what advantages the independent restaurant operator has over the chains, and how well they capitalize on the unique characteristics they can offer. In many cases, independent restaurant guerrillas are generally smaller and can embrace their customers’ experience much more personally than chains. Yet, nothing annoys an independent restaurant guerrilla more than seeing a line of customers waiting outside to hear their name called over a loudspeaker. The independent restaurant guerrilla knows that these people are not typically interested in great food, ambience, or service; they’re in line because they already know what to expect and know the consistency. Realistically, they’re in line because they saw the menu or price from a creative television ad. But that’s an entirely different subject, so let’s not go there.

The independent restaurant guerrilla is left with little to compromise. They must turn to what instinctively draws them to the business, define the unique characteristics, and set a new competitive agenda. Independent restaurants can easily modify their prices and standards to meet local demand, which works in their favor. While chains tend to provide “manufactured” products (both quality and presentation), they are much less flexible for adjusting to local consumer demand. It’s the difference between the cookie-cutter. One uses it, the other doesn’t.

It’s widely viewed that if an independent operator has made it past the five-year mark in a community, his chances of survival (even with chains as primary competition) are much better. In spite of this, the independent operator is usually forced into changing his patterns not just because of the fierce competition, but also for the sake of retaining his staff and his customer base. In the long run it can weigh the balance of consistency and making money, which is not a position most independent operators would ever want to be in. This motivates the independent operator in different ways:

First, it causes the independent operator to be more aware of their customer base. Learning and listening to customer demand and meeting those demands, is something that the independent restaurant operator has at his disposal.

Second, it causes the independent operator to coordinate with his staff unique incentives to enhance the customer’s experience. Adjusting the mechanics of your front and back of the house routines can be a huge advantage over chains.

Lastly, it causes the independent operator to review his fixed and variable operating costs which previously may not have been considered.

Resourceful operators fine tune their unique capabilities, and use that as their first line of defense against chains. At times, it can mean an entire overhaul of the operation in order to save it. Chains take a little bit from everyone, (which naturally is a part of our free market system), and it’s important to remember that chains will provide healthy and provocative competition that can bring in dollars for independents. It’s the difference between a limited scope and a wide scope, which puts the independent at an advantage.

Three principles provide an advantage to independents:

 

• Ambience

   

• Menu

   

• Staff

The ambience is obviously the most prevalent factor in defining a unique capacity for independent operators. Ask yourself what options you have in making your environment a warm and welcome experience. This doesn’t mean you need to invest in remodeling, it means adjusting what you have on hand. Light, air quality, condition of the fixtures, and general cleanliness will all affect the “ambience factors” an independent operator can provide. It should be regular maintenance to change light-bulbs, dust fixtures, and keep the house clean. However, the slight alterations an independent operator can make is a tactic to his disposal.

But it goes further. It’s no secret that department stores play music that is conducive to consumer spending. You won’t hear tired, worn out love songs being played at K-Mart. Rather, they’ve adapted to the listening habits of their customers. Restaurants do this, too. Smart operators will always play music that fits their environment or the customers listening habits. Independents can defy corporate radio in their establishments and can use this to their advantage. Using your music selection can be an asset, particularly during holidays.

Time of day or “daypart” analysis can benefit an independent restaurant guerrilla, as well. For instance, if you have a nice view of a sunset or waterfront property, the guerrilla can have the advantage every time. But other factors such as parking, entranceways, and other landscape fixtures can also benefit the guerrilla. Though these traits are never overlooked by chains, independents can use this to their advantage and modify them, too.

Traffic volume is a factor that a guerrilla should consider as either good or bad, and here’s why: If an independent is located in a high volume traffic area, is it something that works to their benefit during peak traffic hours? How accessible are their parking areas? Is their outdoor promotion logical or attractive? These are the first and obvious concerns you should ask when benefiting from high volume traffic areas. If your dinner rush hour is between 6:00 pm and 10:00 pm, guerrillas should always seek to maximize their potential by implementing ideas that bring in customers during non-peak hours.

A report released by Cornell University’s Center for Hospitality Research on April 30, 2004 confirms this position by indicating that 75 percent of respondents said they would in fact dine during off peak hours if there was an incentive to do so. This is important to remember because the independent restaurant guerrilla can ease the waiting time for tables during peak hours, and increase sales and customer satisfaction simultaneously by inserting off peak hour incentives for their customers.

But it goes both ways. The chains can throw their weight in areas that can dramatically sway attention to the public. Most notably in the jingles created for menu items such as “Chili’s Baby Back Ribs,” or the McDonald’s Big Mac songs. Did this lead to sales? You bet it did! While guerrillas are left humming these songs as they go to work, Chili’s and McDonald’s succeeded in grabbing your attention. By viewing these ads carefully, you’ll see that they are designed to garner demand at certain times of day.

It all relates to the menu. Because the menu is the most adjusted and most often victimized element for an independent operator, putting the menu under the blade before the microscope is a fatal error, and should be avoided. Rather, consider how some simple tweaking on your menu would be more rational.

Just because the chain down the road specializes in ribs, doesn’t mean you need ribs on your menu. Why not use a chop instead? The point is this: instead of improvising a popular chain menu item, create a similar item of the same product (such as pork in this case) that the chain won’t offer. One case that comes to mind is how an independent restaurant guerrilla offered a one pound stuffed pork chop, where the nearest chain was known for their ribs. Chains are slow to make extraordinary menu adjustments, which is an advantage that independent guerrillas should always benefit from.

Independent restaurant operators also have the flexibility for menu development that chains cannot offer. For instance, the low-carb diet is extremely popular right now. Providing a daily or temporary low-carb selection for your guests will keep them coming back. Some independent operators have adopted a low-carb menu for their guests, but going this far is not always an option for others. Providing distinctive menu items for low-carb guests, or other trendy dieters such as vegetarians, will give you market share that chains are not ordinarily known for.

Chains are often in the position of gaining consumer trust while providing trendy and appealing food items simultaneously. Chains invest heavily in consumer demand, product research and development, and pricing structures that coincide with consumer interests. Obviously, the independent restaurant guerrilla does not have the resources or capacity for the R & D the major chains can utilize, so if you can’t beat the research, use it instead. For instance, if a chain has a martini drink list that has become their hallmark, why not adopt a house martini or more to satisfy consumer interest. This doesn’t mean duplicating the specialties of the chain, it means confronting that hallmark and profiting from it the same way the chain does. Through careful training and input from customers or your staff, an independent restaurant guerrilla can benefit from the same research and product development that chains invest in.

Which poses this question: Can the independent restaurant guerilla convey this tactic easily through their staffs?

The staff to an independent restaurant guerrilla is a primary concern to the nature of their establishment. While the competition for skilled, experienced and honed labor is fierce and competitive, both sides seek to obtain the best employees to appease the customers’ experience. Picking off key employees from one restaurant to another, between the independents and chains is not uncommon. There are three parts to any restaurant staff:

Your front of the house (FOH) should always be treated as professional sales people. Insuring that they are in tune with your menu, knowing the dishes and their presentations adds big sales. Having attractive daily specials to offer is symbolic of the guerrilla establishments. There has always been a “myth” that guerrilla establishments offer nightly dinner specials because they have to get rid of old or leftover food product. But that is myth. Daily or nightly dinner specials work to the benefit of the guerrilla because it gives them a chance to market new dinner items and show their flexibility and talent.

But what good is a nightly dinner special if your waitstaff can’t sell it? There’s a certain and real bond that should exist between the menu and nightly dinner specials. Going wildly out of tune to meet a market niche is a dangerous proposition, and should be reserved for holidays or special events. Creative training techniques can help your waitstaff maximize their potential while selling your menu to customers. The better they understand your menu, the greater your sales.

Your back of the house (BOH) is the most essential organ to an independent restaurant guerrilla. The kitchen is where it all begins. Chains have been successful in developing fail proof mechanisms to control the consistency of food products. Large commissaries provide large quantities of food and distribute it out to the units. Its mechanization is so large that when McDonald’s recently changed their chicken nuggets from dark meat to white meat, the entire chicken market in the United States felt the change. Independent restaurant guerrillas are then forced to absorb the price structures that can be set by chains. If a chain as large as McDonald’s (with 30,000 units) makes a change to their menu, the entire foodservice industry can feel the impact of that demand.

How is your back of the house measuring up to standards? Are there proper training techniques in place? Are food safety and handling techniques in place? Is turnover affecting your food quality? Are they satisfied with their jobs? These are things that cannot be overlooked or ignored, and can often vibrate the morale of the entire house. Insuring that your BOH can produce quality in times of peak business hours is highly important to independent restaurant guerrillas. Chains elude this issue by inserting bells, whistles, and buzzers to remind the kitchen staff that food is ready. Independent restaurant guerrillas more often rely on the experience and talent of the BOH to produce without such “reminders.” Training becomes the safety net toward consistency for independent restaurant guerrillas, and must always be viewed as the most powerful weapon in the guerillas' arsenal.

Management is the binding factor for an independent restaurant guerrilla. It is the trifocal responsibility of management to bring the BOH, FOH and the customer together. There is no such thing as a natural ability to bind these three together, creating a daily challenge to find comfort and happiness with all three. The most effective managers understand their customer base, their community, their staff and their operations. If any of these components are missing, one can expect weaknesses in the overall performance of their establishment. However, finding this composition is not always an easy chore for either a chain or an independent. Having management that can articulate, analyze and be responsive to both the needs of the establishment and customer simultaneously is pivotal to any business.

What’s the distinction between the independent restaurant manager and the chain manager? As Ron Yudd, author of “Points of Profit Leadership,” indicates, it’s this: “The company or shop is often driven by the operations manual - the product looks like this, the food cost should be this, the delivery time must be less than this and service to the guest sounds like this - and on it goes.” For independent restaurant guerrillas its nothing like this, rather they acclimate to the characteristics of their environment, establishment, location, customer base, staff and menu. Guerrilla managers adopt these traits on a case-by-case basis, making decisions based on the nature of the issue at hand. Because nepotism is a strong peculiarity among guerrillas, finding continuity in the decision making process continues to be an issue for independent restaurant guerrillas.

Finally, independent restaurant guerrillas should always seek to benefit from catering or banquet functions. This is the biggest advantage guerrillas have over chains! Michael Attias, founder of The Results Group, says that “catering and banquets can add up to 30 percent to the bottom line.” Why not look at it this way: it’s an additional 30 percent advantage independents have over the chains. With rare exception, chains typically do not offer these services, which leaves the market wide open for guerrillas.

Functions (as we call them in the industry), allow independent restaurant guerrillas to serve large numbers of people and allow an opportunity to flaunt the products and services that they offer. Everything from hog roasts to lobster boils, and on down to the basic birthday party, the independent restaurant guerrilla is able to accommodate the needs of large groups of people, whereas the chains, (if they do accommodate groups of people), are often left without the capacity to handle large functions, and typically are not designed to accommodate large functions.

In summary, it’s important to remember that independent restaurant guerrillas (as we have defined them here) have unique capabilities that distinctly separate them from corporate chains. Finding those capabilities and capitalizing on them will enhance the survival rates of independent restaurant operators. Utilizing theses characteristics and modifying them in creative and unique ways will bring customers to the door, dollars to the till, and satisfaction to your employees. You don’t have to do as the Romans do to compete, rather let the Romans do as you do to identify their audience. Keeping your product quality high, your staff well-trained and knowledgeable of your menu, and keeping your service methods high will cause the chains to fight for every inch of the market share.

 

Eric Hahn, Founder and Research Developer of RestaurantEdge.com is a 25-year industry veteran, who has an extensive background in operations. A Phi Alpha Theta graduate of Indiana University, Hahn is also a former congressional lobbyist researcher with the National Federation of Independent Business (NFIB) in Washington, D.C.