The previous posts had a bit of an open end, for which I apologize. So by popular demand, in this post I will reveal what happened to my restaurant after I started practitioning CI. Did I manage to turn the Thursday evening into a profitable night, inspired by my competitor but without losing my identity? And what else did it bring me to reward my invested time? Also, I pointed out that you don’t necessarily need fancy tools to support a CI system at this maturity level. I will show you what I accomplished with little or no investment in tooling, creating a system to support my activities.
In the previous post I showed the various steps of the competitive intelligence process. Because I do not have a budget whatsoever for complex tools to support my CI efforts, I looked for some basic, cheap tools that could save me a lot of time. My main source of information has been Google Reader for ages, so whatever my new system will be, it should make use of all the (news) feeds, queries and other sources of information that I already collected there. Since I am an ambitious restaurant owner, I do not rule out the possibility that one fine day I will be the owner of a couple of restaurants. So now that I have to decide on my CI system, I might as well consider the fact that it should be scalable. I also think of some other requirements, such as the fact that I do not want the whole world to read my information, so I have to think about security as well.
Take your time for this phase since it takes a lot of effort to rebuild your system once it is live. Think about what you want now, and in the future, put it down in writing, and then start considering tools. In short, these are some of my most important requirements:
- Google Reader is the (main) source/supplier of information
- I want to be able to ‘tag’ or ‘categorize’ my information for different purposes
- I want to be able to share the information with a selected audience
- The system should be secure and invisible for people other than the ones I invite
- I need to be able to make profiles or reports on my competitors and certain topics
- It has to be (next to) free
I am of course a restaurant owner and not an intelligence consultant, so there is no better place to start looking for possible tools than the source of all information, Google (you can use other search engines if you desire). I ran into a very interesting article by Nicolas Leroy – who is apparently senior product manager at Kelkoo/Yahoo! – called ‘Building a competitive intelligence tool using RSS and WordPress’ (you got to love people who use spot-on titles). I immediately fell in love with that idea, even before I finished reading the article.
It’s brilliant, think about it. WordPress is a blogging/publishing tool that can receive news feeds (RSS or other) and automatically publish them as articles. I can also manually add articles, documents, anything, and publish that as well. I can tag the information so that WordPress can separate them and can build areas around topics, competitors, et cetera. It will also allow me to search for these topics. Leroy even thought of a mechanism to automatically tag articles for you. You can invite people to the system and give them different authorizations (such as reader, contributor and editor). And… it’s all free of charge!
So now I have a source of information and a way to organize, share and store it. So far it covers all requirements but one. For the time being, I decide to build reports and profiles in one of the tools Office offers (and that I already own). Word, Excel and PowerPoint all offer the basic needs, so it’s up to the user what he prefers to use. As a former business analyst, I picked Excel for obvious reasons. I created a competitor profile template based on the pieces of information that I am interested in. This is where my analysis will take place, and if I liked to share the profiles, I can of course use WordPress for that. Below you can see what my CI system looks like.
Of course there are other ways to create a similar system. Based on my requirements, the solution described suits my needs perfectly and also I can still use my beloved Google Reader. It’s perfectly scalable and for the coming years, this system will do just fine. So I looked ahead and I am prepared for the future, but I also didn’t forget to start small. Tiny even, because it didn’t cost me a dime!
So now that you know what I did and how I did it, it’s time to look at what happened in the months after I started practitioning CI. I wouldn’t exaggerate if I called the effect dramatic. Observing and analyzing the most important competitor in my neighborhood taught me some very important lessons:
I could of course try to copy everything I noticed at that well performing neighbor restaurant but then I lose my identity, my own competitive edge and probably most of my customers (that make my restaurant a success on the other days of the week). No, what I really want to do is to find out what mindset they have and what general rules they apply to their business, resulting in the ‘why’ behind what I saw in their restaurant. When I look back, I noticed (among many other things) that the average time between courses was much shorter than in my restaurant, the crowd was younger and I also noticed they closed their kitchen relatively early. Thinking about that, it struck me that they focus on another crowd. They appreciate the fact that it’s a weekday, people want a short dinner to catch up with friends or don’t feel like cooking, and go to bed earlier than on a Friday evening. Apart from that I saw a special daily offer for weekdays, which also makes sense if you know people want a quick and affordable alternative for cooking. In my restaurant, I had the same focus all week long, not realizing that that might not be the best strategy for all evenings.
So what I did was changing the approach for the various evenings, appreciating what customers want on different days. On Saturdays and Sundays I didn’t change a lot to menu and prizing. But what I did do was to emphasize the image of quality dining, courses that encourage taking the time, accompanied by nice wines, et cetera. This made it easier to differentiate these days from the Thursday (and Friday) evening approach. On these days I serve less complex courses now, much more suitable for a quick dinner (in combination with the Friday evening business parties, for which I have been famous inside and out my neighborhood for quite a while now). I offer two or three course meals, of course at sharp prices. And instead of offering expensive bottles of wine or wine arrangements, I offer a weekday wine special. These are high quality wines that you can normally only buy per bottle, and that are now available per glass as well. This is much more suitable for a quick meal and I can still present my restaurant as a connoisseur of fine wines. So what I did was emphasizing the differences but at the same time preserve the image of a high quality restaurant.
After actively broadcasting this for approximately two months, I started to attract a slightly different crowd and revenue started to increase. I might have lost some customers that searched for extended dining on a Thursday evening, but I gained a lot more new customers. Even with slightly less spending per customer, average revenue on a Thursday increased by approximately 10% and is still increasing. Interestingly enough, average revenue on Saturdays and Sundays also increased a little bit. I think this has to do with the emphasis on quality dining, making it even more clear what we stand for. I can’t even imagine now why I didn’t do that before, having dinner at one of my well performing competitors and learning from them… hey wait a minute, that couple by the window looks familiar, couldn’t that be… that’s surely the best accreditation I could get!
Competitive Intelligence – Think Big, Start Small (I) by Jeroen van Luik
Competitive Intelligence – Think Big, Start Small (II) by Jeroen van Luik
Building a competitive intelligence tool using RSS and WordPress by Nicolas Leroy