The previous episode (e1), Culture Is All You Need, opened with a riff on the title of the popular Artificial Intelligence paper Attention Is All you Need. In this episode the title riffs on the banking world’s Know Your Customer rule, where KYC speaks to financial regulators’ strong suggestion to services institutions they research certain types of behavior for the purpose of keeping the system’s integrity sound. Know Your Guest also regards diligence and integrity, though in hospitality KYG’s focus on guests’ needs and wants is for the purpose of delighting them —generally a precondition for operating profitably.
BTW and in the spirit of truths sharing: all of the words you read and pod-listen across all Good Evening Everyone episodes, this one included, are derived from impressions and thoughts in my head, nothing presented should not be construed representing policies, cultures, processes, circumstances, operators, individuals, teams, operating or shuttered venues, contractors. events, experiences, or anything else of or related to any of my present or past employers, clients, or places where I dine.
I think about KYG pretty much every day. Okay, I’m a dorky hospitality nerd —which I embrace— who became a KYG fanboy as soon as I realized it’s a power tool. Accordingly, in this GEE episode I drop personal opinions re achieving and maintaining traction by understanding guests’ motivations and how these behaviors influence both their and venues’ decisions —because me. These insights evolved over time, and continue to do so, thanks to guest conversations, pre-shift meets and post-shift reports, data analysis, marketing and PR work, opening new locations, hiring and discharging, developing managers, and copious quantities of industry-related listening and discussion.
The hospitality industry’s interest in better understanding guests’ needs and wants has increased, thankfully, thanks to it becoming easier to collect and log anecdotal, and later digital data, into communications tools and repositories like cloud documents, spreadsheets, Slack, Monday, and SQL databases.
Me simplifying here, so please bear with me: when a venue slips into the “needs + wants ➞ motivation ➞ decision” process successfully they’ve got a shot at nudging prospective guests’ brains to select, meaning book or just show up, in their favor. KYG’s the tool that enables venues to know how, when, and where to perform this slipping in to guests’ mental process.
It’s not a one-size-fits-all process because individuals are not all the same. The perceptions each venues derives from its KYG work informs their better understanding re how prospective guests mentally, and geographically too by the way, cluster into market segments. Any particular segment may or may not share one or more motivations in common with others, I’ll opine further on how segments can be unique in their own ways and how to spot revenue opportunities in coming episodes —so please stay tuned.
For perspective, picture getting together a group of twelve, you plus eleven friends, for a dinner gathering someplace where everyone can drive there. Before finalizing your gathering decision, consideration of several needs and a few wants is typically where one begins. First, identifying a venue we’ll all enjoy because they can facilitate our wants and constraints. Probably there are several venues in the area who can accommodate a group of our size, however we become motivated to decide to book at one particular venue because some other stuff comes into play. Perhaps we’re all coming from different parts of town and a central location is more fair in terms of drive times, or half of the group aren’t deep-pocketed and we have to respect their budgets, or peanut allergies that rule out a few types of food, or maybe we just all agree we want a place with a DJ and party vibe. It’s complicated, eh? It turns out that oftentimes selection favors the operator who makes obvious the decision we should make —keep it simple works!
This is why KYG matter so much. To make things simple operators need to align their product with motivations. Why is is the obvious decision for some segments hold birthday celebrations at Cheesecake Factory? Their motivations obviously align with the product, so it becomes a no-brainer in business speak. That said, there are segments who decide Le Bernardin is the obvious choice. Venue popularity is often the result of simplifying decisions —for market segments. Kowing your guests means knowing your segment(s).
A venue’s popularity is generally is a good proxy for its profitability. I say generally because restaurants also requires many operating skills that can make or break their P&L. The bottom line is it’s an operator’s skilled individuals’ work plus, very importantly, the venue’s location that ultimately determines its popularity —traction.
Location, plus the aforementioned skilled individuals’ production of food, service, interior design, and dining atmosphere I conceptually collapsed into the venue’s vibe. Vibe a simplification. I think about these variables as coordinates on a graph, together summing up into the venue’s vibe because it appears it’s what guests do too. Our brains decide the simplest way to satisfy what “I am or we are in the mood for” given any constraints.
When a venue discovers after they’ve launched that they’re mostly popular only on Friday and Saturday nights (i.e., they turn 100% their seats 2x) however they discover difficulty filling even 25% of their seats 1x other nights of the week —Houston we have a problem. When they notice several nearby competitors are turning both their weekend and weeknight seats 2x —every night— there’s a KYG opportunity with the weekend-popular’s name written all over it.
The above is a really simplistic example, however it’s a good one for thinking about guests’ motivations. The 2x seat turns —every night— venue operator is probably like the duck paddling furiously below the the surface, aquatic traction, while gliding forward seemingly effortlessly. If sports metaphors are you thing, in restaurants as in basketball the inconvenient truth for competitors is pros actually work extremely hard developing the expertise for generating consistent wins while making it look easy. The greats all works hard at it; the big it for hospitality venues is KYG.
Discovering the day-of-week weak seat turns problem isn’t pleasant, particularly when it’s not reared its ugly head until a year after launch —after being the new shiny thing in town novelty wears off. Now remedial vibe-tuning is required to avoid becoming yet another entry on the “these restaurants just closed” side of the local media’s dining-out ledger. Gaining an understanding of who’s jonesing for what in a particular geography —a segment in need or want of a particular dining vibe— could lead to formulating a vibe-tuning solution. Solutions require plans, which I prefer to think of in terms of roadmaps becuase typically they’re a path rather than a point. And no, I don’t mean planning to offer discounts; by now it shouldn’t be a secret discounting worsens this type of problem. Signaling desperation is never a good look —because ewwww.
KYG is both a lot of work and a fun puzzle to figure out; giving your team the authority and budget to sort the pieces is truly energizing for everyone —because personal agency. Once you’ve hired talent who can get stuff done on their own you’re a good way towards many solutions. Individuals having high personal agency tend to thrive on solving puzzles —because intrinsically motivated. Maintaining traction’s very much an open-ended puzzle-solving process because tastes and other factors in the environment (i.e., inflation) are always in flux, including competition. An operation’s managers each need to have the wherewithal and authority to operate this particular Big Lever —because P&L.
I think about collecting anecdotal and digital data as essential for solving hospitality puzzles. I present the data collection and figuring out process to my teams by diagramming for them how we’re each a sensor and perceiver in the operations puzzle solving process. We all, and our Point Of Sale system helps us with sensing too though it’s not going to solve problems (BTW, I sense there’s valuable opportunity for analytically inclined inventors in POS data export) on its own, are integral to producing solutions, especially the guest-facing individuals.
Waitpersons who truly care about their successful delivery of delight (!) to every single one of their guests, every day every time, are already listening well in their interactions. Floor managers who care, at every table touch they’re listening well, interacting with a constructive attitude. When something not landing well with a guests, or it’s over-the-top delighting them, collected and logged anecdotal data are our friends. These need to be next be understood, letting them fall through the cracks in the venue’s operating system is like any other spoilage due to laziness.
Thinking about lifestyles and vibes from the guests’ perspective hopefully leads us down many of the good kind of rabbit holes, spurring us on to hypothesize re how to better shape our product from competitors’. Maybe it’s increasing service-levels, bettering plating technique, or perhaps altering the music that helps us tune the vibe to be in better sync with prospective guests’ (the Totally Addressable Market: TAM) moods. Creating a venue’s Vibe-Market Fit is a real thing.
Teams working on opportunities like day-of-week segment alignment are more likely to succeed when they’re scientific in their hypothesizing, experimenting, and results analysis. The best of them are called data scientists for a good reason. It pays to be vigilance for when marketing and PR folks start going all hand-wavy while pointing out there’s huge money in this town, it means they’re likely not on top of the data. When they proclaim “it’s now only a matter of time” and you see their spray-and-pray emails and untracked full-comps everywhere while not improving traction —they’re likely correct, it is only a matter of time however it’s hardly ever in the good way thagt it ends.
KYG implies having an ongoing experimentation layer in the roadmap, it always operating in the background for determining how to continuously improve guest acquisition and retention. Such experimentation often doesn’t mean taking big expensive risks, just better understanding how to most easily acquire contact details from guests can be highly valuable, perhaps it involves just asking while providing a convincing value proposition.
When operators make smart hires, for example identifying then installing innovators into events acquisition or data capture positions, and the culture they nurture is one where truth seeking is the norm, then everyone’s encouraged, not just the data nerds like me (and you too?), but FOH and BOH individuals as well, to fearlessly approach leadership with what they’re sensing is really going on with regard to both guests and operations along with their hypothesis and ideas for formulating experiments —because it’s truly fun and rewarding when teams actually operate as intended. Onwards!