Cost Containment versus Responsible Management

In this topsy turvy world of economic disasters and tragedies, I am noticing what can only be described as "pushing the panic button" happening more and more frequently. What I am referring to is this: in a season of the hospitality industry that is traditionally slow, in the wake of the media's proclaimation of economic doom, we are suddenly making decisions that could potentially harm our business for years to come. Changing the units operating hours, cutting back the staffing to bare essential levels, and releasing "superflous" management staff (human resources, revenue management) is the true recipe for disaster in the long term, when the effects of these actions will surely be felt.

In the hospitality service, we are selling not only food, but the guarantee of excellent, even at times, opulant, service. When a guest arrives at four oclock in the afternoon for a nice hot cup of triple latte with half low fat half soy and a shot of french vanilla and a half shot of caramel syrup, the odds he won't care why he can't get it, he will only recall, with a rightous indiginity, that he wasn't able to get it. He will remember this experience and with 99% probability seek to fulfill his craving elsewhere the next time he is in the area. What this means to the business is not only loss in revenue that day, but the loss of potential revenue that that guest represents. When you add up the numbers, without even factoring in the power of ten (the average amount of potential guests that he will communicate his displeasure to), the results are staggering.

Responsible management is what I have chosen to accomplish in this time when my superiors are begging me to cut operating hours and lay off staff. I am paying close attention to sales versus labor versus cost. I am using word of mouth as an effective adverstising tool. With my chef, we are compiling new and exciting dishes out of the supplies we keep on hand, instead of opting for the more exotic fare that we are used to serving. I am focusing on customer service, excellent customer service, even opulent customer service (we have a guest the I personally served a four course french dinner to, he was escatic) . Through attention to these details, it is my hope that by not only keeping to the bar, but upping it, we will ppresever, and when this "economic disaster" turns itself around, as it will, our guests will recall our loyalty to them and respond in kind.
Until then....


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Tags: containment, cost, customer, cuts, darnell, economy, labor, management, responsible, service


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Comment by Paul Paz on January 3, 2009 at 10:44pm
Hi Darnell...
Thought my latest post would apply to your discussion here!
It's about an owner turning off the heat in the dead of winter because one employee forgot to tunn off the furnace when closing the restuarant. See the link below.
Happy New Year!

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