Taking Orders: How Doing What’s Asked Produces Subpar Results and Lowers Your Paycheck
In high school I spent my summers waiting tables at my father’s restaurant. Each night I’d change into my uniform, tie my server’s apron, and head out to the dining room to take orders, sling burgers, and fill drinks.
After my shift was over I’d sit in the back room with the other servers, where we’d count our tips from that evening’s service. After a few weeks I begin to notice that my stack of cash tended to be shorter than most. “The other servers have better sections than me,” I’d tell myself; or “they worked a longer shift than me”; or “they lucked into more generous customers.”
It wasn’t until several years later when I began to dine out more frequently that I realized what I’d been missing as a teen. If waiting tables was an art, those that were experts at increasing average check size were the artists. The best servers proactively described the menu in detail and recommended individualized course pairings in order to make the restaurant more money while enhancing the customer’s experience. Those that added the most value to the dining experience received the largest tips, and there was little value in simple order taking.
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At times, I hear from revenue management executives who treat their roles as I treated waiting tables. “My General Manager wants the rates raised by $10,” they tell me, “the owners think we’re leaving money on the table.” And so the rates are raised, the GM and owners are temporarily satisfied, and the revenue manager continues on with their day. The revenue manager takes direction, pulls the levers, washes, rinses, and repeats.
As time goes on the revenue manager begins to look around, and they notice that their stack of cash is a bit shorter than most. It’s shorter than the Director of Sales and Marketing’s, even though they have equal responsibility for the hotel’s financial performance. It’s shorter than the Director of Finance’s, who focuses primarily on the expense side of the P&L. And occasionally it’s even shorter than that of senior sales managers, who– while critical to a hotel’s success– have nowhere near the impact of a seasoned revenue strategist.
Is this fair? Perhaps, for there’s no value in order taking. When your role is to strictly execute someone else’s vision, you haven’t proven you’re entitled to a larger share of earnings. By definition you are replaceable– anyone can press the buttons. And when you’re replaceable, you don’t have the leverage you need to negotiate a higher salary.
As a revenue strategist, how is it then that you can please your customers and in turn increase your earnings potential? Stop taking orders, and start selling solutions by following the steps below:
1. Take Ownership:
The most successful servers establish themselves as experts in their domain and take ownership for each customer’s satisfaction. They do not simply wait for the customer to tell them what they want, they lead the customer through the experience.
While I’m not recommending insubordination, the GM or owner’s representative should not be determining detailed revenue management strategy. Their areas of responsibility are too broad for them to understand the unique intricacies of a given day or week from a pricing perspective. They hired you for a reason, and it’s your responsibility to establish yourself as the credible revenue management expert.
2. Discover Desired Outcomes:
High performing servers are aware that each of their customers may have a different reason for dining in their establishment. Perhaps they are looking to impress a key client, celebrate a special event with friends and family, or avoid the hassle of cooking and cleaning that accompanies home meal prep. Each customer has different expectations and objectives, and the key to a big tip is discovering the needs of each.
Work with your GM, ownership representative, and other executive stakeholders to determine the priorities for your hotel. Oftentimes surface level comments such as “raise the rate by $10” speak to a deeper need, such as the need to increase profitability or a trend of excessive underperformance in ADR against the competitive set. However, there are many ways to raise ADR without modifying your BAR rate strategy, and in some cases increasing rates across the board can have a negative impact on ADR. By determining the top 2-3 key objectives as a team, you can better understand the desired impact of the “orders” you are receiving.
3. Develop a Strategy:
Once they understand the desired outcomes of their customers, master servers tailor the dining experience to accommodate each guest. For customers hoping to impress a key client, the server will recommend more expensive options and time their service so as to not interrupt the conversation during critical moments. For customers celebrating a special event the server will often join in the celebration, ensuring that the guest of honor feels welcomed and appreciated.
Using the lessons learned from the discovery process in step #2, develop strategies to achieve each of the key objectives. Perhaps in order to increase your hotel’s overall ADR you will limit opaque production, or focus on selling higher value room types rather than boosting daily rates across the board. In order to convince your stakeholders that this is the best course of action it’ll be important that you are able to articulate your thesis and the key metrics you will use to track success. If you have results from prior A/B tests, this step will become much easier.
4. Execute as a Team:
Experienced waiters understand that without flawless execution, even the most well thought out service strategy will fall apart. Good service can compensate for a few flaws, but if the food comes out cold and the wine is turned– the customer will take note.
Similarly- in revenue management even the smartest strategies mean nothing if not properly executed, and there are often several factors involved beyond your control. Perhaps you’re reliant on marketing to deploy a campaign, or sales to secure a key account. Without flawless execution from all parties involved, success is far from certain.
5. Measure Results:
Once the dining experience has concluded, savvy servers gather feedback from their customers to determine if their efforts were successful. This allows them to continue applying successful strategies in the future, while correcting any flaws the next time around.
Once revenue management strategies are deployed, it is crucial that results are measured and compared against your original expectations. It can be helpful to develop standard reports used to measure the impact of each strategy, such as Focal’s Impact Report. Accurate measurement will allow you to determine how to further improve results moving forward.
6. Swallow Your Ego And Improve Next Time:
Master servers realize that they can never execute perfectly. Whether their customers leave with a huge smile on their face or in an angry huff, there are always opportunities for improvement. For savvy waiters and waitresses each table served is an opportunity to tweak their approach slightly, leading to a more finely honed craft.
Similarly, there are always opportunities for improvement in revenue management. Take a moment to pat yourself on the back after a successful strategy deployment, but don’t celebrate yourself so long that you become complacent. Conversely– if a strategy is unsuccessful, take the time to understand why and develop a plan for improving results the next time around.
BONUS- Remember that the Customer is (Sometimes) Right:
Experienced servers know that at times the customer knows best, even if the elk tenderloin is truly 10x better than the rib roast. In such cases, it is best to bring them their desired option.
Similarly, at times it is best to follow the recommendations of your GM or ownership representative when they are passionate about a given strategy. In such cases, continue to follow steps 4-6. By doing so you will be in a better position to execute on steps 1-3 in the future. And occasionally, as much as it may pain you to admit it, you may realize that they were right.
By implementing the steps above today, you’ll be well on your way towards evolving from a “revenue manager” into a “revenue strategist.” Improved results will soon follow, and your team will begin to take note. And just as shunning an order taking approach results in additional tips for restaurant servers, you may just find that your paycheck reflects a little extra value the next time around.
Contact Us today to learn a bit more about how Focal’s analytics platform can help you to transition from analyzing the “what” to understanding the “why” and impacting the “how, when, and where.”