Business Irish

Wednesday 26 June 2019

The final Problem Solver from Feargal Quinn

From 2013 Superquinn founder Feargal Quinn provided a unique service to business owners and aspiring entrepreneurs. Drawing on his decades of experience he offered insight, advice and encouragement to others while he quietly donated his fee to charity. We're very proud to present the final Problem Solver column from 'himself'.

Feargal Quinn
Feargal Quinn

Feargal Quinn

Q. I run a cafe with a great team of staff and suppliers. We do some really unique work and have a great story to tell. I am increasingly worried that our customers are not getting our message. Any suggestions?

A. This is probably one of the biggest struggles any business that focuses on being unique has in the marketplace. You invest lots of money in buying the best of ingredients, in hiring the best of staff and creating something that is truly unique. If your customer doesn't have an understanding of this, you run the risk of them leaving your establishment and simply saying 'that was very expensive'. In all probability - because of the quality of your ingredients, your links with your producers and the efforts made by your back and front of house staff - your menu price is probably going to be more expensive than everywhere else. If there is a gap in your communication of your key messages, then you are in big trouble.

I remember meeting a small café owner a few years ago who told me that they got up at 4am every day to bake all of their own bread and cakes. I asked if their customers understood this or not, at which point the owner gave a resounding 'yes'. However, on meeting the owner again a month later she was rather sheepish about her opinion on what customers knew about her business. In the weeks following my question several customers had asked her where did she buy her bread and cakes from as they were really gorgeous.

She had made the classic mistake of assuming everyone understood what she was doing. I have no doubt that if you ate the bread and cakes you would come out of the establishment saying they were wonderful. However, she should have been making a strong statement which in effect said to customers 'You won't get these anywhere else, as we make them ourselves'.

My advice to you would to be to create a communications plan (a simple one-page document) which sets out all of the ways which you can get the message across. Harness your social media platforms and perhaps include videos from your producers and growers showing all of the work they are doing for you.

Equally, give your chefs some airtime to talk up some recipe ideas and give a glimpse into the magic they are creating. Don't ignore opportunities within the premises itself - photographs on the wall of your teams at work manufacturing product, tent cards on tables calling out some key facts - eg did you know that we only use Irish chicken in all of our dishes, etc.

Even the way that your menu is written might need to be reviewed. I always admire the menu in the Winding Stair in Dublin. It is like a 'who's who' of Irish producers and certainly one is left in no doubt about where your food is coming from.

In summary, my message is to identify clearly what your story is and use every possible channel to communicate this. Don't forget that your front of house staff will play a key role in telling the story, so do make sure that they are clear on the messages to be communicated and that they have a real appreciation for all of the dishes and your great suppliers and producers.

Q. My business has been trading for 20 years and my manager has been pushing me hard to use the occasion to promote the business. It all seems like a lot of work for no great reason. What is your opinion?

A. Your manager deserves an award for their ability to spot a marketing opportunity. Lots of businesses struggle to find reasons to promote the business. You have a fantastic excuse being handed to you on a plate.

Well done on getting the business to the 20-year mark. Now you need to reap the rewards for this. Whether it is some free PR in the media, a celebratory newsletter to your key customers or just a general raising awareness of the business and its track record, you need to seize the opportunity.

My recommendation is that you enlist the help of a marketing expert, if you don't have one within the business, and create a plan for the next nine months or so in terms of how you are going to use the opportunity to build your brand further. This should involve your digital media strategy, a PR campaign, a celebration with your staff and customer initiatives.

The fact that you will have a plan will ensure that these events and activities are scheduled well ahead of time and the effort that you referred to in your email is minimalised for everyone, while at the same time getting maximum benefit for the company. Happy birthday, by the way!

Q. I am a manager in a mid-size manufacturing business and there is a really strong focus on growing sales from the owner. The only problem is we are becoming less and less profitable, and I can't seem to get him to focus on this. Is it okay to grow sales in the short-term while making no profit?

A. Many businesses have a strategy of aggressively discounting in order to grow market share and while there is some validity in this if it is part of a strategy, I detect from your email that there is probably no strategy in place and it is probably more of a case of nobody paying attention to the bottom line.

I don't need to remind you of the overused quote 'Sales is vanity and profit is sanity'. I have also come across some business case studies where the owner actually decided to cut back on some unprofitable sales resulting in overall sales falling, but they made considerably more profit by focusing on only those accounts that were profitable.

I recall in Superquinn during some very difficult recessionary years a few decades ago, the chairman of our business giving us all a wakeup call when the business was making very little profit, by saying that we would be better off selling the company and investing the money in the bank, because we were going to make more profit on the interest then we were in running the business. If we ever needed a wakeup call that was it.

You are in business to make a profit and yet at times that objective may have to be given a lower priority as part of a growth strategy. There must be a parallel strategy to return the business to significant profitability once this has been achieved.

I would recommend that you sit down with the business owner and try to get an understanding of what the strategy is. If you find it is absent, then it may be up to you to put one in place.

Enlisting the help of your financial controller/accountant might also be a good way forward.

Q. My business is three years old and I am struggling to grow it to a level of sales and profitability that I need for it to be sustainable. Can you give me any inspiration?

A. I was talking to a man recently who had closed his business after a 10-year struggle where he had pumped lots of his own money into it. He described it a bit like 'Waiting for Godot', due to the elusive sales and profitability which never arrived. He deeply regretted not questioning his journey earlier. I would applaud you for asking the question now, rather than be lured on indefinitely.

My message is simple. It is okay to change, alter and amend your business model as you go through your journey, if the first model isn't working. Some business owners feel that they must beat the first model to death and don't realise that it is okay to make substantial changes or even scrap plan A if it is not working.

A point comes where you have to ask yourself if the business is meeting the objectives you set out before you started. It would be easy to convince yourself that success will come 'in the next 12 months', but there have to be some clear lines in the sand which you don't go past.

The Ryanair story in its earlier years is well catalogued and the model was reinvented many times before the successful formula was eventually realised. You will hear similar stories from many other successful businesses. My suggestion to you is that you conduct a major review of the business now and possibly enlist the help of someone external to help you with this, a business mentor or a consultant with expertise in your sector would be good to have on board for this.

If you have to spend any money on this external advice, it will be money well spent in my opinion. Making the correct decisions now could make you a lot of money in the future.

Q. I read somewhere that progressive retail businesses ensure that their staff are good at upselling and related sales. I find this very off-putting as a customer and I am struggling to implement it in my own business.

A. What is needed first is clarity on the definition on upselling and related sales. Some businesses handle this very badly and try to make an additional sale to the customer where there are no synergies between the two products. What does work very well is where there is a natural relationship between product X and product Y and the staff member adds this into the conversation in a very conversational manner.

I was listening to a group of retailers chatting recently and one of them from the fashion industry was explaining to the others that when customers are trying on a garment in the changing room, staff encourage them to take in related products just to try the look and the feel. Typically, they explained, the customer comes out, looks in the mirror, and feels on top of the world. Without any prompting many buy the full outfit.

I was talking to the owner of a computer shop recently who told me about their strategy. They simply greet customers on arrival and reassure the customer that they are on hand if they need advice, but they leave the customer to work away on their own at the beginning. The staff member then proceeds into the area where the customer is viewing but still doesn't approach them, but starts to play the features of a piece of technology in that area. The customers are immediately attracted and make the first approach to which the staff member replies 'Are you familiar with this? Let me show you how it works'.

The conversation then proceeds where the staff member finds out what exactly the customer is looking for and the process begins from there. I was also impressed by the 'language' that retailer used when the customer was very specific about what they wanted - eg "I want that particular laptop at €400". To which the staff member would reply "Perfect, I'll get that for you... just before I bring it out can I point out to you this other laptop which has five additional features for only €50 extra".

They told me that the majority of their customers are only delighted to be shown the extra features and most opt for the higher-spend item.

We have all seen the bad upselling and related sales. It is completely off-putting but it is not a reason for your business not to look at this. You also need to be careful that your own perception as a customer isn't clouding your judgment. There is no disputing that upselling and related sales handled properly, are a key driver of sales for any retailer and you need to be exploring this in a way that is compatible to the ethos of your business.

Feargal Quinn 1936 – 2019

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