Recently, an article discussed how the Olive Garden is losing customers and as a result is planning an overhaul of its restaurant. Darden Restaurants Inc., which owns Olive Garden (and Red Lobster among smaller chains) has created a plan of attack for boosting popularity. The changes include a new menu with lower-costing dishes, remodeling restaurants, and revamping its advertising.
In the case of Olive Garden, Heidi Schauer, media relations manager for Darden explained, “Right now we’re working on several initiatives to enhance the overall guest experience, including the development of a new core menu with even greater affordability, the creation of a new advertising campaign, and the remodeling of more than 400 restaurants to make them remain wonderful settings for a great Italian dining experience. Each of these initiatives will take time to complete and we’ll be able to share our progress at the appropriate time after they have been introduced to the public.”
Declining profits is something many small business owners also face, and like Olive Garden, there are steps that can be taken in an effort to boost profits. Unfortunately, if you’re a small business owner who is struggling to get the customers, you don’t have time to roll out drastic changes like Olive Garden. And you can’t risk waiting until the changes are implemented to spring them on your customers. The best approach is a forward one, by involving clients in the revamping process. As your most informed analysts, your customers can tell you what works (and what doesn’t) with your business. The best part? It’s free. Ask your customers what they would like to see more of, less of, ask them how they would rate your business, ask them what competitors they go to, the possible questions are endless.
Fortunately for Olive Garden, their popularity is still salvageable, in fact, in an article for Forbes.com, the “Italian-inspired” restaurant came in third in a ranking of favorite American dining establishments. However, sales have been sagging for established restaurants overall, (down 2.5 percent last quarter), and if left unattended, Olive Garden may sink deeper into its rut. Research indicates that the restaurant gets fewer business from lower-income customers who can’t afford to eat out as much, and still other studies show that people have stopped attending due the quality of its food.
This can be a lesson for small business owners: know your customers. Find out what kind of people would use your services or patron your business. This can be done researching the industry you’re working in, or taking informal surveys of your customers. Find out what they tend to like, what their buying habits are, what they look for when they do business, whether with you or your competitor. Thanks to the age of Google, it’s easy to find the statistics for the industry you’re trying to break in to, and it’s a great start to understanding how to meet the needs of your future clients.
Another factor that may be affecting Olive Garden is the sluggish economy; experts say the restaurant simply hasn’t stayed competitive. Today’s dining choices, fast or otherwise, have been pressured to provide a lot of food at a value price, and Olive Garden has been slow to jump on the trend.
Staying competitive is tough, especially for a small business owner whose budget may not be as big as Olive Garden’s. However, being competitive doesn’t just mean that your prices are lower. It also means offering something unique to a customer that they may not get from other businesses. Differentiating is critical for a small business to thrive, and tapping into what makes your business different from a big name or the company across the street can determine your company’s survival. Can you stay open later, offer a personal touch, or customize orders? There are many ways a small business can stand out among the giants, and if you have trouble finding yours, again, ask the experts: your customers.
In the end, Mark Kalinowski, a restaurant analyst who covers Darden for Janney Capital Market, summarizes with the question, “Can Olive Garden be fixed? Absolutely. Yes. Is it an easy fix? No.”
The great thing about being a small business is you have the ability to adapt much easier than a big chain like the Olive Gardens of the world. You also have the invaluable resource of getting to know your customers on a much more personal level and understanding their wants. Listening to their needs, and incorporating them whenever you can is not only smart business, it’s a recipe for success.