[00:00:00] Speaker A: Contrary to popular belief, we are not in the age of data. We've always had data. We've had customer notes, guest notes. We've been able to look at the metrics, the covers, the revenue, all of that. What we're seeing right now is finally the ability to take all that data and put that into practice, to inject that into the operation to have better, more efficient, more profitable, more profitable operations. Today I want to talk to the CEO of Aveiro. Aveiro is the OG software. I was using this 20 years ago back when I started managing restaurants. It is still just as powerful and reliable as it was all that time ago, and maybe even more so. I get to talk with Doug C. Who's the CEO of the company. I can't wait to hear for you to hear everything, everything in this conversation. Don't go anywhere.
[00:00:48] Speaker B: There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown.
[00:00:58] Speaker A: This is Restaurant Strategy, a podcast with.
[00:01:00] Speaker B: Answers for anyone who's looking.
[00:01:19] Speaker A: Hey everyone, thanks for tuning in. My name is Chip Close and this is Restaurant Strategy, a podcast dedicated to helping independent restaurant owners increase the profitability of their restaurants. We do two episodes every single week. Monday's focused on operations, Thursday is focused on marketing. Those are the two biggest pieces of what you can control in your business. The whole idea is to help you level up, learn something new every single week that you can put into practice right away to get better at what you're doing. Why? So you can have a better restaurant, serve more people, feed more people, employ more people, and ultimately support your families. I'm trying to help independent restaurant owners increase the profitability of their restaurants. That's what this show is all about. Listen, if you get any sort of value from this show, take two minutes, pause right now, go to Apple Podcasts. Leave us a five star rating or review something that just lets people know what you got out of the show, what you like about the show and why you think they would like the show. Take two minutes, go do that. Apple Podcasts. That more than anything helps us grow our community.
Are you ready to revolutionize the way you run your restaurant? I want you to unlock the power of data to optimize your operations with Aveiro, the trusted technology partner for over 40,000 hospitality professionals worldwide. Aveiro understands restaurant operations. They have a data backed answer for every food and beverage challenge and are focused on delivering the right answers to the right people at the Right time. With Aveiro, you can make better, faster, more profitable decisions. You can drive customer traffic, raise, check, average and ensure a consistent guest experience across all of your locations, all of your day parts. Are you ready to drive more sales by leveraging the hospitality industry's best kept secret weapon, unlock your restaurant's full potential. Today, get started for free and transform your business by visiting averoink.com and a v r o I n c.com as always, that link is in the show notes.
[00:03:25] Speaker B: So my guest on today's show is a guy named Doug C. He is the CEO and founding board member of a company called Avero. If Aero sounds familiar, it's because they've been around for a very long time. They're also a sponsor of this show. Largely because I believe in the product. I believe I've used the product for as long as I ran restaurants and there was total alignment in sort of what I believe, what I preach, what I coach clients on and really what they're building, what they have built in the way that they serve operators. So much we're going to get into on today's episode. Doug, glad to have you here.
[00:04:03] Speaker C: Thanks so much for having me.
[00:04:05] Speaker B: So you've obviously been with the company for a very long time. You are very, very familiar with sort of what this company is, how it.
Talk for a minute about what Avero is, just big 30,000 foot view. And, and then we'll. I got other questions to ask after that.
[00:04:23] Speaker C: Yeah, I mean the, the, the, probably the best way to describe it is we're Moneyball for restaurants. So you know, we're taking basically numbers and translating it into ways that you can take action to improve your profits, drive revenue, protect your profits. And so that's what we've been doing for our entire existence.
[00:04:43] Speaker B: Talk to me about the genesis of this company. Was that, was that always it and how was it realized and how has it grown over all these many, many years that it's continued to grow?
[00:04:57] Speaker C: Yeah, you know Our founder, Damian McGavra was a former restaurant CFO and he, he and I were actually investment bankers together at the beginning of our careers. And then eventually he went to Harvard Business School and then became the CFO of, of a restaurant group. And you know, he was very, very numbers oriented. He was very frustrated by the fact there was all this important information in the point of sale device but there was no way to get it. You had to print it out, you had to re key it into a spreadsheet. And as we all know, you know, restaurants Live by the moment. And so, you know, by the time he did his analysis, it was too late to do anything about it, the time it passed. So know, we were very much built by operators for operators. That's, it's something that we're very proud of. And so the product was really built with all these problems that people have every day. From the smallest restaurants to the largest restaurants to huge enterprises and huge food and beverage operations all around the world. They kind of all have the same problem, which is, I always say that running a restaurant is death by a thousand cuts. There's like a thousand things that can go wrong and maybe there's only 50 of them that are going wrong. But how do you figure out which of those 50 are going wrong among the thousands? So that's kind of like what our mission is, is to help people one, discover that and then two, figure out how to convert that into running a restaurant that. That's profitable.
[00:06:33] Speaker B: Yeah. So before we hit record, you were saying, you know, this, this idea of, you know, analysis can be scary and very off putting to most restaurant owners because they didn't get into this. Most of us didn't get into this to, you know, to analyze numbers and all that. We got into this, make great food, to make people feel good, to take care of people, give people, people cool places to go and celebrate and all of that. And yet in order to do that well and successfully and over a long period of time, you have to be able to be good at numbers. It's one of the things. I went back to business school during the pandemic and I want to say it was 25 years removed from a math class. It just wasn't. It's not something I'm good at. My dad's an actuary, my brother was a math major. So they got the math gene and I just didn't.
Which is cool because I had to kill myself to really understand it. Because you can't fake it. Can't fake it through. Through business school. My very first course back was a statistics class that I decided to take in a seminar format. So it was pounding, you know, three eight hour days, which was a terrible way to do it for me. But I did it.
I always say that I go to do that and then my, I went to do that and then my job is to help people think differently about it, to simplify it. Because if we take all our energy trying to figure out what, what's going on will never take the time to actually put something into place to fix what's going on. I know we sort of have a similar feeling on this.
Talk to me about the different things that the software does, most importantly, the ways that it impacts or has impacted. I'm sure you've got a thousand examples you can pull from, but ways that people are using it and can use it in real time that you're not going to get anywhere else.
[00:08:26] Speaker C: Yeah, I think the thing that we're probably most famous for is what's called server productivity. So it's the idea that your servers are your salespeople. It's a little bit of a misnomer to call them servers because it indicates that they're just food deliverers. But think about it, they're the people who are in front of your customers every single day. Right? Right. So imagine that you go to a restaurant, right. One time you go to the restaurant and a server says, we have a signature cocktail program. Would you, Are you interested in a cocktail? And another time you go in and somebody says nothing. Okay. Not surprisingly, the person who asks sells a heck of a lot more than the person who doesn't ask. Right. So, so then as the restaurant owner or as the restaurant operator, how do you know if your server is asking? Right. You're going through potentially thousands and thousands of covers in your restaurant a week. So how do you figure out whether they're asking the question or not? Well, mathematically it comes down to the people who are asking are going to have higher average checks or PPA's, and the, the people don't ask are going to have lower PPAs. Right. And then our software basically started looking at the bottom performing servers in particular versus the top performing preservers. And so we're analyzing for you like what's the difference between an average performer and a bottom performer? Right. And what makes up that difference? Is it that they're not selling enough of a specific item? Is it that they're not selling enough high priced items? So give you an example. So when we first started this part of the product, we were curious, we were testing it and we were curious to see what was going well and what was potentially going not well. So we actually looked at situations where it looked like it was 100% wrong. So we went to a steak place and it was a server who was not selling steak. And we were positive. We were like, there's no way that it's our mistake. There must be some problem in the software. And so we actually flew out there because we were testing the software. We wanted to try to figure out these false positives we sat down with the server and turns out the server was a vegetarian.
And we were like, why are you working in a steak restaurant? And they said, gosh, that's a great question. I can't even stand the smell of meat. But I thought I would make the most money working in a steak restaurant because it has a high average check. So I thought I would make the most tips. And I said, what are you doing? And they, you know, look, a lot of customers ask like, what's your favorite item? Yeah, I always recommend the salad. So.
And, and when they order steak, she's basically saying, well, you know, I wouldn't, I wouldn't necessarily order the steak. I'd order the salad.
So we found out pretty fast that we call it the tyranny of the server. It's like the server without training is going to basically say whatever they think is right, whether it's a moral issue for them or whether it's a financial issue for them. And we've all experienced that. When we sit in front of a server and we ask them a simple question like, what's the best item on the menu? And you know how a lot of servers say everything on the menu is great?
I call that anti sales. Like you're not giving the, you're not selling the product. At that point, you're basically just saying, walk around the store and choose whatever looks good. And so we're, you know, we're very, very much into analyzing how every server is doing, looking at those bottom performing servers and then helping you understand why they're not performing to average.
That's given to you in the form of they're not selling these categories well. And because of that, you can then just go to your pre shift meeting. You don't sit down and talk to all your servers, you just talk to the two bottom performing servers and then you basically just train them so you're not working harder, you're not working longer hours, but you're working smarter. You're making more money. The server is making more money. So it's, it's a win, win.
[00:12:56] Speaker B: Doug, can I offer a little color here? Because I really mean it. I've used this for, I don't know, a decade and a half in all the different restaurants that I ran and opened. And I've got three pieces of information to give here. Number one, first thing is this server productivity. So for everybody listening, right, when you run a report that says, you know, to find out your ppa, the per person average, or your check average, right. Understanding how much a guest is worth to you at lunch, how much a guest is worth you on average at din. The cool thing about this program is that it can slice it and say not only what's your check average, but what's it per server? Meaning a server in Elaine's section is more valuable than a server in Joe's station because there's something Elaine's doing. You can see it right there in. In dollars and cents in black and white. You can see this. So, number one, we identified our high performers and low performers. And I did this thing. I've been very vocal about it on the show. I interview every week, every week for every position, whether I'm full, whether I need people or not. Because if I have an all star walking in, I know that there's always people the bottom one, two, three people that I'm always willing to get rid of because I'm seen they're not performing. I've talked to them about it. I put, you know, performance improvement plans into place. I've done that stuff. But I always know that there's somebody that's. That I'm willing to. If I can find an upgrade, I'll get an upgrade. So that helped us determine who was at the bottom of the rung. It told us how to work on a development program with them. So that's the first piece. Number two. It started helping us identify our top performers and our poor performers. Number one, the poor performers, who needs more coaching, more training? And the high performers, it forced us to look there and say, what are they doing? To your point, what are they doing? You do it on the low performers. What are they doing that the other people, you know, are they. What are they not doing that the high performers are doing? But when we looked at the extreme, performers were like, whoa. Either the data is wrong, which we trust it wasn't. Which it wasn't. But we said there's something they're doing in particular when we say, okay, in fine dining, you know, the check average is $110. And Elaine. I use Elaine a lot because I talk about her. She's making her way into my book.
When I first moved to New York City, I worked at Be Our Guest restaurants, which was a Steve Hansen company. They were, he was very close with Damien. They. He swore by the program.
That's where I first learned to use it. And it was funny because we were looking at Elaine. It was $110 check average and Elaine was scoring 140, $150 per head every Single time. And so what happened is we went and we said, well, let's pay closer attention. Basically we sat there and eavesdropped on Elaine to see what she was doing. And I use this. There's the Elaine playbook, which I talked about, I put into the server, you know, as part of the training packet in restaurants that I opened after that. And it's now making its way into the new book that I'm in the process of writing. But there were four specific things that Elain doing different than everybody else. And we realized that, we looked at it, we were like, oh, damn. Well, that was equating to 40 or $50 per person. Now there was also some really egregious sort of like over the top stuff she was doing, which didn't make its way into the playbook. We politely patted her on the back and said, that's really great. I can't teach other people to do this. But there were little things like she would greet the table without menus. Even though it was part of the steps of service to greet the table with menus. We just started noticing, we're like, man, her drinks, her beverage is through the roof. And that's accounting for a lot in top line revenue. What is that? She's like, well, she wasn't following steps of service, she wasn't following protocol. And we can't yell at her because she's making so much money. But she would go over and she had to script every single time, Doug. She would go over, say, hi, I'm so sorry, I was just stuck at another table and I didn't want you waiting. My name is Elaine. I'll be taking care of you. I'm going to be back with menus in a minute, but I wanted to get you started off with something at the bar. What can I get for you? And she would look at and we watched her and we talked to her. She would look for the thirstiest person at the table. And it was a thing. We realized what she was doing and we could systematize it and when we could train other people to do it. And over the course of 90 days, it brought everyone's per person average up by about five or seven dollars. We only had that information because we knew to look at it. We knew to look closer at it and see without the program, without Averro, we wouldn't have known that she was such an outlier. And then we wouldn't have looked closer. We wouldn't have looked more closely into what she was doing so we could do that the last thing I'll say for color here that we would do is when we had everybody's per person average, right? We said, okay, our per person average for the restaurant is $75 a head. And here are the people, you know, here. And we could see where everybody was in relation to the average. We could set goals for people over the quarter. So over the course of the quarter, if you can get your per average or your guest check average up by, we would set a number. $3 over the course of the quarter will give you a 500 bonus. And we would set a different bonus because the bottom line is we said, well, if they're going to wait on, you know, whatever the number is, 600 covers over the course of the next three months, 600 times $3, would I be willing to give some of that back to them? What happened is that people would go way above and beyond. Everybody would be trying to go for this thing. And then we would always do some big prize at the end of the year for the number one check, send people on a trip or whatever. And the point is, we knew to put stuff into action.
[00:18:26] Speaker C: Yeah, we, we run, we help people run server contests all around the world in big entities, small entities, we run them all. Everybody runs server contests. And by the way, I think one of the best practices that we've seen is you don't have to give the $500 away, just let your best server choose their shift. So that's, that's something, that's something that a lot of people do.
[00:18:51] Speaker B: This was always a fourth quarter thing we would do because we knew it was such a big deal. And we would run, say last year, during fourth quarter, this was the check average per person, and this was yours if you could beat the average buy. And that's when we would do it. But yeah, you're absolutely right. You get to pick your shifts. You get to pick your schedule for sure.
[00:19:11] Speaker A: Now, Sterling Douglas is the co founder and CEO of a company called Chowley. Chowley does so much for this industry. And I want you to hear a.
[00:19:20] Speaker B: Little bit from Sterling.
[00:19:22] Speaker D: In the last few years, restaurants have faced massive changes. Labor costs, food costs, rent, even payment processing costs are up so much that price increases alone can't cover it. And at the same time, their customers are demanding a whole new way to interact digitally. And that's now a requirement to survive, let alone thrive. To their credit, restaurant operators have been resilient. They've survived pandemics, inflation, regulatory environments, and more. They've added the tablets, put out The QR codes took reviews seriously and their reward? A disjointed collection of tech that doesn't talk to each other and is impossible to manage. I've listened to hundreds of operators tell me the same story with the same problems. And that's why we came out with the CH platform. One place to manage everything outside of your four walls. Just like everything built at Chale for our 17,000 restaurants, integrations and connections are at the heart of everything we do. It starts with your digital storefront. Your website has two jobs. More traffic, more orders. By connecting to Google Business Profile and your point of sale, we get that done for you. Digital marketing. We'll manage your paid ads, emails and social posts. We'll help you win the hyperlocal knife fight to maximize your sales. We measure everything so you know exactly where your orders are coming from. Marketplace, email, website, ads, app, all in one place.
Chowee gives you more orders by ensuring your entire digital storefront is optimized with the data. You already have more time by using our knowledge and a done for you experience and more control by managing it all in one place. The Chowi platform isn't just a tool, it's a partner in running a more successful and profitable restaurant.
[00:21:15] Speaker A: If you want to learn more about Chowley, go find the link in the show notes.
[00:21:22] Speaker C: So the great thing is that when you think about taking somebody who's a bottom performing server and just raising them to the average, right? And it might be two servers, it might be three servers. The great thing is that when you narrow the variance between your top performing server and your bottom performing server, right? When you lower variance, you get more consistency. Consistency. Another word for consistency is quality. So you actually improve your service quality by basically lowering the variance, right? And just imagine, I know a lot of owners out there who have experienced this, which is you're just walking by a table and you hear somebody saying something that you don't agree with or something that is off putting to the customer and the server doesn't realize it. And just imagine being able to do that in a statistical way for non statisticians.
[00:22:15] Speaker B: A lot of people say we're in the age of data and I always push back. I said we've always had data. The point is can we learn from it and put it into practice? To your point that you said a few minutes ago, can we do something about it and can we do it quickly and can we systematize it? Meaning what did Elaine do? Elaine is doing these four things at these four very specific moments in the Meal, we systematize it. We just write down the script. This is what we want to do. We changed our entire first approach at that particular restaurant that I said because we specifically saw, when we greet with menus, they immediately take the menus and start looking at food. Right Then I don't want them thinking about food. It's more valuable to me to get four martinis times 15 to pad the check, $60 on a check before they even think about anything else. We stopped bringing water on first approach. It was always the last thing we did. We come over, we say, we'll bring over menus in a minute. We get the drink order and we say, oh, also water for the table. Would you like bottled water or tap? Instead of just coming over and assuming the number of times I've shown people how to do that again, all just because of what the, what, what the data shows us. And then it becomes easy. We just say, oh, there's something that person's doing. What are they doing? Let's look at it and let's put a plan into play. Let's teach everyone else how to do it. It ends up being such a, such a powerful thing.
[00:23:32] Speaker C: Yeah, but the, you know, the, the fancy term for it is steps of service. But the reality is it's really about educating and training your staff. Right? And so look, regardless of whether you use our product or not, right, you should be training and educating your staff, right, about your menu. I can't even tell you how many customers that I've gone to where the servers have never tried the menu items themselves.
That's a very basic thing, Right. So I listened to your episode about training and how restaurants suck at it, and I couldn't agree more. But I think that even when you do the training, it's like there's one kind of training which is for everyone and that's kind of what you're talking about. I think from a performance standpoint, when you do training for individuals, that's when you really, really see impact. Like when you can sit down with somebody during the pre shift meeting and it's just, you know, it's after the pre shift meeting as maybe a one on one. And you can say, listen, I noticed your wine sales are not as good.
Let's talk about why that is. Or do you not feel comfortable opening a bottle of wine? Is it that you haven't tried our wine? Have we not educated you on what pairs well with which wines?
And so I find that being able to get down to that very granular level makes You a lot more money saves you a lot of time because you're. And I think the message is a lot more directed and a lot more impactful to your bottom line.
[00:25:19] Speaker B: Totally right. So when you talked about getting down to the category level or the item level, you know, through your story before, the woman working at the steakhouse who didn't want to sell steak. It's a point well taken. And if we're meeting with our team regularly in a pre shift meeting, or if we're meeting with our team regularly on a one on one basis, which we should be doing, the power that this provides you that. Now we're not talking in.
Now we're not speaking vaguely. Now we can say, hey, look, this is the check average for the entire restaurant. This is where you are in relation to the average. And we can make a couple of recommendations to your point. Looks like you're not selling nearly as much wine as some of our top performers. Let's talk about that. Hey, it looks like you're not selling as much dessert as some of our top performers. Let's talk, let's talk about how we can help there. You could put a plan into place of saying, okay, this is how I can specifically help you make more money. Because as we know, our servers make 20% of all the revenue they drive. So, you know, an extra thousand dollars in revenue they drive. That's a meaningful amount of money in their, in their pocket. When you show them that over the course of a week or a month, it ends up being powerful. But mostly it's giving them the tools, not telling them, hey, I really need you to sell more stuff. It's like, hey, I need you to sell more stuff. Let's figure out how to help you do that. Like, how can I, how can I make it? I always, I always think, you know, systematizing it, meaning do this, this, this, and then giving specific scripts on the operators part ends up being really powerful. Because if you sit at the pre shift and say, hey guys, really, listen, I really want you to, you know, make sure we're selling out there, blah, blah, blah. The entire team's nodding their head and going, yeah, yeah, yeah, of course, yeah, we'll do it. And then they break and then they just go back to doing what they know. But if you can work individually with people and help them in the specific areas that they need help with, I completely agree. It just, it provides that individual development.
[00:27:14] Speaker C: Yeah, we had this whole thing with, with some of our largest customers where we went, and there would always be a Corporate mandate. Let's, let's improve our wine sales by 3%.
And then we would start looking at those initiatives and we were wondering why were they never successful? It was random, basically. Whether they improved or not didn't improve.
And so we went and talked to the servers and what we found out was that when you're in a pre shift meeting and somebody says, well, we need to all start selling more wine, they look to their right, they look to their left and they say, oh, they're talking about them, they're not talking about me.
And so what we found was that if you, if you customize it to them, to Elaine, then all of a sudden they have no choice but to listen. They realize it's about them, it's not about everybody. And so it's made a lot of these programs, which by the way, again, regardless of whether you use our product or not, that's a hack for, for how you make more money in a restaurant, right? Educating your restaurants, having pre shift meetings.
[00:28:25] Speaker B: Right.
[00:28:25] Speaker C: If you're not doing those things, you should be doing those things, but just a way of just making them a lot more effective. And a lot of the, the most profitable and best restaurants in the world, names that you would all know, they all do this in an effort to improve service and improve their profits.
[00:28:44] Speaker B: If we say, hey, staff development is important. Right? Which again, I think a bunch of people sort of nod their head and say, yes, the next natural question is, but, but how do I do it? What's a manageable way? Because I don't have any more time. I don't have any more time in my week, so to speak.
This, I think, gets to the, to the heart of it. It does it better than, I mean, I really mean it. I've used this very intimately in every, in my entire operational career. I don't think there was a single restaurant in New York City that I opened or ran that did not use this program. I feel that strongly about it.
The difference is, as opposed to. Because now sort of data is at our fingertips, now we've got a lot of reporting from a lot of places. And I just want to highlight, highlight this, this thing, this, this ability to sort of like to drill down and look at it, look at any given data point from a bunch of different directions. Is the, is sort of the unique quality about what Avaro does, true or false? Maybe you can get in a little bit more there because I know people are sick of reporting, they're sick of reports. Yeah, I think it's really important to Know what's the report you need and then what do you do with the information once you, once you have it? So talk to me a little bit about that.
[00:29:58] Speaker C: Yeah, well, I would say two things. I mean, I think the first thing is, is that there's a top level of reporting which is like, how am I doing? Right? We call that the front of the baseball card. It's the picture, it's the, it's the home run stance. It's somebody, you know, catching the ball over the wall. Right. But then of course, that doesn't make them a great baseball player. You want to flip the baseball card over and look at their stats, right? So our drill down capability is to basically be able to take that summary performance data, which a lot of, you know, you can get now in a lot of different reporting areas. But can you drill down and look at that next level to say, is Elaine selling enough wine? Is she not selling enough dessert?
And to be able to look at it so that you can take actionable, do something actionable that will drive your profits. So I think it's, it's, you know, what's really, really tough in this business is like you don't, as you were saying, you don't have time, right? So, so one of the things that we do is we say, look, you're, you're after your pre shift meeting, you're just going to grab them, you're going to be prepared in advance because it took you three minutes, right, to basically drill down to the back of the baseball card. Look at who the bottom performing servers are, look at what's going on with them, and then you're going to pull them aside and say, hey, listen, what can we do? Look, I noticed that you're not selling enough wine.
Let's organize a tasting for you, talk to Jody and she'll put together a tasting for you and some of the other servers and tell you about the pairings. And, and then you just get your report in your email, it gets sent to you automatically. And then you just look and see is Elaine doing better? Yes or no. Right. She's either getting closer to the average or she's not. Right. And we do all the math for you and you can see it in real dollars. Like, how much am I making by getting Elaine closer to the average?
[00:32:06] Speaker B: I, I think that's a real important point I want to make sure we don't gloss over, right? Like, how many dollars am I losing by having? And Elaine's a bad example because Elaine was always the top. She was Always the outlier.
There's a reason I'm building a whole section of my book about her.
[00:32:24] Speaker C: Right.
[00:32:25] Speaker B: But for every Elaine, there were four more people who were way underperforming. And again, if the average is 75 and you've got people at 100 or 120 and other people who are at 50. Right. That's. Why would I give a cover, why would I see the COVID in Joe station who's at 65 when I've got Elaine who can squeeze 105 out of them? Right. Like, like why, like why would I give Joe the covers? I don't, I don't want Joe to get the covers.
[00:32:52] Speaker C: Yeah. We have this great statistic that was invented at Avera which was you take the difference between the server and the average and multiply times the nut, multiply times the covers and you get lost sales opportunity. So that's the, the, the quantitative amount of money that you're losing. Right. If you're looking at it over a month, then you multiply it times 12. That's the annual.
[00:33:14] Speaker B: Yes.
[00:33:14] Speaker C: Lost sales opportunity.
[00:33:15] Speaker B: Yes.
[00:33:16] Speaker C: Right. So you'll be shocked.
[00:33:17] Speaker B: Yeah.
[00:33:17] Speaker C: Anybody who does this, okay. I've gone to the world's greatest operators in the world and showed them their. Taught the bottom performing servers and what their annualized lost sales opportunity and they, they will fall off their chair because this, especially when you have an high average check you have, and you have a big menu, have a much, much wider variation. Like you said, it's, it could be 125 down to 50.
[00:33:42] Speaker B: Yes.
[00:33:42] Speaker C: That's a huge variation. Now you're multiplying it times potentially thousands of covers.
[00:33:47] Speaker B: Right.
[00:33:48] Speaker C: And now all of a sudden you're losing tens of thousands of dollars on a single person. And that's when it becomes really real for people.
[00:33:55] Speaker B: Yes. So I'm so glad you walked through that because that, that's exactly, that's exactly what I, what I remember going through all these years ago when I was, when I was in operations. When you do that, it shows you, oh, that's what I'm losing. I always talk a lot about with my coaching clients and on the show a bunch about reverse engineering. Right. So if I say let's use even numbers now. So the check average is, you know, a hundred dollars per person. And we got Elaine at 125. And we've got some other underperformer, Joe, let's say at 75. Right. So number one, Joe is $25 off the average, $50 off our high performer. We can reverse engineer that we know where we need him to get to. And then we just have to work backwards and say, okay, what's required of us? How can we help Joe get there? And when we show him not only the lost sales opportunity, but then multiply that by 0.2 and say, and here's your missed hip opportunity. Right. So I always love doing this. Hey, do you want a $4,000 raise? And they said, sure. So great. Let me show you this piece of paper that outlines how you can get a $4,000 raise. Not by working more shifts, not by working any harder, but just by doing some of this blocking and tackling better. And I always say, I say this a lot, right? That the key of a leader is by, you know, we just fall on our sword over and over. And. And I think that's my fault, Joe. I think. I think I haven't done enough to get you there. So now I'm aware of it. Now I'm going to help you now. We're going to put this plan because we both benefit if we can bring you up to where you need to be. Does that sound like a plan? And when you, when you take ownership of it, really apologize for changes. That relationship, that dynamic between the owner or the manager and Joe, this underperforming server, it's not you telling them what they need to do. It's saying, hey, I just looked at this and I take ownership of that. That's my responsibility.
[00:35:46] Speaker A: I don't.
[00:35:47] Speaker B: I think we missed something in your training. I think we can do better by you.
You got to meet me halfway. But. But we're going to work on this together, and it becomes an incredibly, an incredibly powerful conversation to have.
[00:36:00] Speaker C: Yeah. I will tell you, it's one of the things that I'm most proud of is that we've kind of changed the culture of a lot of restaurants because when we first started that conversation was we should just fire the bottom performing servers. But as we all know, the costs of finding labor, especially in today's market, super hard. How do you know that? The person that's coming in after you train them and you, you put everything together, that they're going to be as good that they're going to be at the average. Right. Statistically, it's this. You. You have a 50, 50 chance of getting that right. So. Yep. So now the dialogue is just like you said. They're basically, they sit down with people. I think everybody who gets pulled out used to be very worried, but now the conversation is, how can I help you?
[00:36:48] Speaker B: Yes.
[00:36:48] Speaker C: Make more money. Right. And that's an easy conversation, right?
[00:36:53] Speaker B: That's really. So that's something I learned very early on. You know, it's one of these things, right? Like there are people who are raised in families that are just sort of free thinkers, entrepreneurial, like, like there are other people who are really good. Like part of it is culture, like how we nurture this behavior. And I was raised in the industry, right, in a very specific market in New York City, very specific in being fine dining, Michelin starred restaurants for the most part. And I always had this at my disposal. And the people who trained me, my two mentors, lived and died by this program. And so I lived and died by this program as well. And I always just saw it as a tool for being constructive and productive. And I guess that's where we're coming, we're coming up on our time here. But I guess I want to, I want to wrap this up and just say you need to be able to look at the data and use the data to tell you what needs to be done. Right? So the reverse engineer. This is a program that does it brilliantly, flawlessly, efficiently, very quickly so you don't have to spend a lot of time. No spreadsheets, things like that. I mean, it's just, you know, you set it up and you get it in three minutes, as Doug said, you just sort of get it, you know, emailed to you as in an ongoing sort of monitoring situation. But the biggest thing here is culturally that it's not just a back office tool for you to tell how you know your scorecard. But I've found it really does change the conversations and it changes the culture, it changes the dynamic within the place. Because now we can be constructive. It's just not the things you're not doing. It's here's the things you could be doing or here's the things I, I haven't shown you how to do. Let me show you how to do. Which ends up being making for such a better restaurant environment. You know, there's not like people who are looking to get fired all the time or they're underperforming. It's like you're underperforming and we've got really clear data that shows where. And so now we can do the rest. We're smart. We can help you get better in the other areas so that you can come up to. Come up to par.
[00:38:56] Speaker C: Yeah, for sure, for sure. And I think, you know, I, I've been in this industry now for a Long time. And I would say everybody is constantly struggling with, with what you just talked about, about how to build the right culture, about how to maintain accountability, but keep an eye on profitability as well. Right.
And yeah, so I think that that's kind of like what we do. And, and I'll just segue into saying, look, I think one of the things that we've done is we've, we've brought it to the point where anybody and everybody who's in the restaurant business should really use. And because of that, we recently, almost as a thank you to the industry, we developed a free product which I encourage everybody to use. There's no commitment, there's no need to use any of the paid products unless you want to. But I think it's our way of saying, look, everybody is struggling, especially right now with prime costs going all over the place. So, you know, we're, we're there. We provided a free product that helps you keep an eye on everything.
And I encourage everybody to go to our website or look us
[email protected] and try to figure out how to become more quantitatively driven without becoming a math mathematician.
[00:40:24] Speaker B: Absolutely. We will include that link in the show notes for sure. The last thing I want to put in here, Doug, and you won't say it, so I will say it is that I've been spending a lot of time over the last, I'll say 18 months talking about best in class. Right. That there are a lot of. There's a lot of scheduling software out there, there's a lot of inventory management software out there. There's a lot of email providers or marketing suites and things like that. When it comes to restaurant tech. Right. Because everyone needs a, you know, tech stack. Now.
I always warn my coaching clients to be careful because they go and they, you know, hop to a new POS system. We don't have to say which one, it doesn't matter. They'll go to a new POS system and they'll say, well, we have this and this and this and this. There's a whole lot of things that you can use. And I always warn people, I said, that's fine if you all want it under the hood, but what part of what you're paying for is just the convenience of you don't have to worry about it. And just because you have it doesn't mean just because you have a loyalty program doesn't mean it's the best one that's actually going to achieve the goal you want. Just because there is an Emailer. You know, an email piece of software doesn't mean it's as good as, you know, hey, we've got inventory management software. It's probably not as good as Margin Edge, what Margin Edge is able to do. Right.
[00:41:41] Speaker A: We.
[00:41:41] Speaker B: Oh, it's got scheduling software. It's probably not as good as seven ships is. It's best in class. Right. We've got an email. Oh, there's an, There's a way for us to send emails. Okay. Is it as good as what even mailchimp offers? You know, being a true CRM with landing pages, the ability to segment and build automations and drip sequences and all of that?
If you just want to send an email once a week, fine, yeah, you could probably do that. But if you want to do any of this other stuff, you could do. And I think the same is true with what, with what you guys have built and what you guys continue to, to put out there. I, I haven't really come across an analytics tool that allows you to look at your numbers as deeply as you do and the ability then to take action on it. So I'll tell everybody here, the free down, you know, the free piece of. The free aspect of it, by all means, go check it out. To set up a demo and to go through it and just see it in real Life cost you 45 minutes of your time. And whether you decide to do it after that is totally up to you. But, but it's, it's really that impressive. And I, I can't, I can't speak highly enough of it.
[00:42:51] Speaker C: I appreciate that. I appreciate that. And I hope, you know, look, this business is hard, right? So we've been in business for a long time because at the end of the day, we're being measured every day by the same things that you use to when you decide to buy your, I don't know, your ingredients or you decide to buy another device, which is, it's either going to make me more money or it's not. So, you know, 14,000, 15,000 restaurants now have used this every year to help them make more money. So I hope people, you know, explore that and recognize that we can always do better. Right. That's the thing that I've learned from listening to your podcast, is we can always do better. And this hopefully helps.
[00:43:38] Speaker B: Absolutely. Doug, I appreciate you taking time out of your day to sit and chat. Any last words of wisdom for the audience before cut you out of here?
[00:43:46] Speaker C: You know, I would say, well, no, I don't really have anything. Sorry.
[00:43:52] Speaker B: We've said a lot. This has been a really, we've said, really packed.
[00:43:55] Speaker C: Yeah, I don't want to go down another rabbit hole.
[00:43:57] Speaker B: Yeah, no worries. We'll probably have you back at some point because I've just loved this conversation so much. We really do see eye to eye.
[00:44:02] Speaker C: Great.
[00:44:03] Speaker B: I appreciate for all, for all you've done to shepherd the software and to help the. The industry. I appreciate it. Again, I will put the link in the show notes. Doug, thank you very much for being here.
[00:44:12] Speaker C: Thanks so much, Chip.
[00:44:14] Speaker A: Once again, big thanks to Doug for taking time out of his day to sit and chat with us. If you don't know Avera, you need to check it out. The link is in the show notes. It really is the OG software. Before we all had tech stacks. This was the one piece of software that did so, so much. And it's still just as valid and important now as it was all those years ago when I was first int introduced to it. One final reminder. If you own a restaurant and you struggle with profitability, then I want you to reach out and set up a call. You go to restaurantstrategypodcast.com schedule grab some time on the calendar. You'll chat with me or someone from my team. Let's see if you're a good fit again. You're going to ask tons of questions about the program. We're going to get to ask you some questions so we learn more about what's going on with you and your restaurant. And then we'll go from there. We'll see if you're a good fit again. RestaurantStrategyPodcast.com Schedule as always, you'll find that link in the show notes. Thank you very much, guys, and I will see you next time.
