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Turn Customer Satisfaction into Profit

June 25th, 2010 | Posted by retailblogadmin in Uncategorized - (Comments Off on Turn Customer Satisfaction into Profit)

Most retail banks spend a lot of time and money on maintaining and improving customer satisfaction.  It makes intuitive sense that customer satisfaction is an important component of retention and that improving customer satisfaction will translate to an increase in revenue.  However, most banks struggle to show a clear link between customer satisfaction and revenue or other key metrics.

A recent article in US Banker cited a study that found that “some of the nation’s worst-performing banks are among the best at delivering customer service.”  If good customer satisfaction doesn’t translate to better performance, then why should you spend money on it? (more…)

Made Here, Fresh Today

June 24th, 2010 | Posted by JMarek in Restaurants - (2 Comments)

I read the Momofuku cookbook last night, and strangely it got me thinking about chain restaurants.  David Chang tells the story about going from buying lo mien noodles to make ramen at Noodle Bar to learning to make them in house.  Is there an opportunity for chain restaurateurs from casual to QSR to differentiate better on this “in-house” dimension?

Of course, many chains already take advantage to some extent.  Krispy Kreme has the famous, and famously cool looking, in-store donut making machine.  At In-and-Out Burger, you see the whole potatoes being cut into fries (ironically, double frying from pre-cooked frozen probably makes best tasting fries, but from-fresh sure looks great).  Panda Express has built open kitchens and a see-through wall into their refrigerator to show their fresh vegetables.  Chevy’s made a name for themselves making tortillas fresh in “El Maquino”.  Panera and many bagel places visibly bake on site.  Subway famously brought that idea to a low-price QSR.

But there are many more ideas.  To brainstorm: (more…)

Taking Restaurants Private

June 22nd, 2010 | Posted by JMarek in Uncategorized - (2 Comments)

Last week’s deal to take Burger King private caught few by surprise, given the intense focus of PE on the restaurant sector and the many struggles of BK.  A few months ago, Mill Road announced a deal to buy Rubio’s.  In late April, another firm (Apollo) came over the top of Thomas H Lee to buyout CKE for about $1 billion including assumed debt.  All this comes on the heels of 2010 acquisitions of On the Border (Golden Gate Capital), Papa Murphy’s (Lee Equity Partners), and Wingstop (Roark Capital Group).

Amid speculation that there are more restaurant buyouts to come, we’ve been thinking about what PE firms need to do to thrive with these new investments.  (more…)

A Playbook to Survive Overdraft Regulation

June 21st, 2010 | Posted by Will Weidman in Financial Services | Uncategorized - (Comments Off on A Playbook to Survive Overdraft Regulation)

Also featured in American Banker

The new overdraft regulation will go into effect soon and will cost banks millions of dollars in lost revenue.  Many banks are still scrambling to get as many customers as possible to opt-in, and many haven’t announced a broader change in overdraft policy.  Simply complying with regulation is not enough to protect fee revenue.  Banks need to develop a forward looking strategy to maintain profitability in this new regulatory environment.   

Some like Bank of America and JP Morgan made sweeping changes to overdraft policy well before the new regulation took effect.  While changing overdraft strategy is vital, their approach of modifying policy for all customers is not the best one.  By changing policy quickly and uniformly there is no way to tell what impact it will have.  The changes may significantly hurt profitability, and it will be very difficult to roll these changes back. (more…)

Making Money on Starbucks WiFi

June 15th, 2010 | Posted by JMarek in Capital Expenditures | Labor & Operations - (Comments Off on Making Money on Starbucks WiFi)

Starbucks Free WiFi offering is all over the news today.  Andrew Hickey at CRN had the most interesting analysis we’ve seen, giving 5 reasons why Starbucks is making this leap.  Reasons range from competition with McDonald’s to the simple fact that (short of trapping customers on an airplane) it’s becoming so you can’t charge for WiFi anymore.

Reason #2 is the most interesting, but stops short of the real point:

It’s all about targeting the consumer. (more…)

One of the most common comments we hear from restaurant CMOs/CCOs is “we test, but our tests aren’t as predictive as they should be”.  Here’s a case in point.  Per the Wall Street Journal, Burger King is running out of ribs for their LTO.

Just three weeks ago, we wrote that BK Ribs was an idea worth testing, despite a lot of skepticism from industry analysts and food bloggers.  Well, what’s worth testing is worth testing well.  A scientifically designed, rigorously analyzed test is predictive.  (more…)

More Thoughts on Taco Bell $2

June 10th, 2010 | Posted by JMarek in Restaurants - (1 Comments)

Do we need more of these?

Taco Bell has now launched a petition for the Federal Reserve to issue more $2 bills, accessible through Taco Bell’s Facebook page.  There’s a full-page ad in USA Today, and the write-up on a Wall Street Journal blog is today’s most popular article on WSJ.com.  Of course, this is marketing the 3-item $2 Meal Deal promotion we discussed in a prior post (see Taco Bell $2: A Restaurant Trade Promotion?).

Here are five things what we love about this marketing tactic: (more…)

I Remember When…

June 4th, 2010 | Posted by JMarek in Marketing & Media - (Comments Off on I Remember When…)

.. newspapers were used to market restaurants and retail stores.  Now, here’s an example where an In-and-Out Burger gift card is being used to sell the LA Times.  Not good, the newspaper business these days.

Cracking Breakfast

June 3rd, 2010 | Posted by JMarek in Restaurants - (Comments Off on Cracking Breakfast)

The crew over at Serious Eats did a taste test on fast food breakfast sandwiches, with an unexpected winner.  The interesting thing was why the winner came out on top: a freshly cracked and cooked whole egg.  They even mention the sound of “the magical crack that only a real egg could make”.

It makes us wonder… what’s the economic value of a real egg?  Could this be a differentiator in the increasing crowded breakfast game?  Now that’s a test we’d love to see run.