The FINANCIAL -- This is the fifth article in our series for restaurant leaders and describes the fourth point of The Golden Thread, Gallup's strategy for getting ahead of your restaurant competition. Read the first, second, third and fourth articles in this series.
Brand ambassadors are the fourth point on The Golden Thread of a profit and growth-oriented restaurant culture. A great brand ambassador is an employee who raves about your restaurant even when they aren't on the clock. They can't wait to tell their family and friends about a new item on the menu. They bring their kids to eat at the restaurant -- even when they don't work there anymore.
Anyone who faces the customers, whether an employee, broker or franchise owner, is a brand ambassador. But not everyone can do it well. That means hiring people who are psychologically fit for the role and the culture of your organization is key. This is true for any business, but it's especially important in food service. Good brand ambassadors help create consistency across your locations and, if they deliver on the brand promise, can increase average ticket sizes dramatically, according to Gallup.
However, for brand ambassadors to optimize profit potential and deliver on your brand promise, they have to know what to say.
Telling your brand ambassadors to express the idea, "My restaurant is a great place to eat," isn't enough. Those are table stakes in today's business environment. Brand ambassadors must be able to create the experiences customers want. The experience is becoming increasingly important to customers, especially millennials. And consistently delivering that experience is essential.
Even if you have the best food, premier servers and a fabulous location, one bad experience can tarnish your brand reputation -- we've all seen what happens when a bad review goes viral. Brand ambassadors who know how to deliver on your brand promise can help prevent bad reviews and create the experiences that will prompt customers to write raves.
But employees will only do it if they are emotionally attached to your company, your brand and, most importantly, their local manager -- in other words, if they're engaged.
How to Create a Culture of Engaged Employees
One of the best decisions hospitality leaders can make is to hire the right local manager, period. Behavioral economists say that 70% of all the decisions we make in life are emotional -- only 30% of them are rational -- and local managers account for 70% of the variance in engagement for every single one of your brand ambassadors. Managers have a tremendous amount of power over a team's engagement, and engagement is valuable.
Gallup research shows that engaged workers are more productive, profitable and engaging. And engagement is rare. The employee engagement ratio in average organizations is 1.6 engaged employees for every one actively disengaged worker. In world-class companies, that ratio is 11.7-to-1.
Those high-engagement companies are also more likely to have engaged customers -- and they're lucrative. Fully engaged customers represent a 23% premium in terms of share of wallet, profitability, revenue and relationship growth over the average customer. Gallup hospitality analysis found that fully engaged customers make 56% more visits per month than actively disengaged customers do at casual dining restaurants, and 28% more visits per month at fast-food restaurants. Engaged workers go the extra mile to engage customers and create the experience today's consumers are looking for, making these employees the ideal ambassadors for the brand.
Employee engagement is an underused asset -- the last of the low-hanging fruit -- for restaurants that want an edge in their market. Implementing an employee engagement initiative is the obvious way to boost engagement, but for such a program to work, engagement needs to be cultivated among all employees throughout the company.
Start at the top, if that's the best way to sustain the program -- leaders certainly need to be engaged, too -- but don't quit until engagement is part of your company culture.
Do that, and brand ambassadors, especially the front-line ones, can deliver a consistent experience. Your engagement initiative will also support your purpose and values, which are fundamental to your brand promise, and it can solve one of the industry's biggest problems -- retention.
In food service, 25% to 40% of revenue is devoted to labor costs, so every resignation is money down the drain. TDn2K's People Report says that front-of-house turnover costs a business $2,000 per person, back-of-house replacement costs $1,902 per person, and replacing a manager runs $14,036. Meanwhile, food service turnover is 150% in quick-serve restaurants and 103% for hourly staff at a full-service brand. Keeping a brand ambassador on for just one more month adds to the bottom line.
Engagement and talent-based hiring are where restaurants can stop losing money on turnover. That's especially true for younger workers. Gallup studies show that when millennials can "strongly agree" that they know what their organization stands for and what differentiates it from competitors, 71% of them say they will be with the same organization one year from now.
Get the Outcomes You're Looking For
Installing an engagement program and a talent-based hiring system is important to turn workers into ambassadors, but even the best brand ambassadors need coaching to deliver the right outcomes.
As we discussed earlier in this series, creating coaches throughout your organization is the key to impact how your front line operates and delivers on the brand promise. But brand ambassadors have to know what the brand purpose is, what the values are and how the culture operates. That's why they need coaching. And it isn't something that takes place in the classroom -- it's on the job and in the moment.
Obviously, that's more easily done in engaged workplaces, with talented employees and great managers. But even non-employees, like brokers, need to know the purpose and values well enough to represent the company and brand promise accurately.
Understanding the behavioral elements of the people driving your business is more critical today than ever before. Leaders must connect the dots from their employees and customers to their local sales and revenue. That's how food service creates an experience customers will return for -- and business outcomes that your competition can't touch.