Exponential Growth

It is not enough to receive support, no matter, how needed it may be. It is fundamental to know how to receive this support and ensure that its result is exponential. Kay Rala Xanana Gusmao

 

Is it possible for Zankou to have some kind of concept like Panda Express or Chipotle where customers walk by and just choose whatever they like in an “upscaled” cafeteria-style line?, I was thinking about this over the weekend. I came to the conclusion that it would one day become totally possible, but we would have to change some of our style and presentation in order to make it work. We often discuss the 4P’s of marketing in our team. I do much of the marketing, so for me that is the most important goal, however read on to hear about the others.

We discuss the 4 P’s of marketing as that being product, price, place, and promotion. All are equally important in our business. The idea I had for the new business was to do something like a “Zankou Express”. This would be something similar to what Panda Inn did in Glendale. They opened a “Panda Express” store in Glendale Galleria in the 1980’s and went from a small family business to an empire that stretches various cities, over 1,200 stores, and over $1 billion in annual revenue. That’s an amazing achievement, and I believe that Zankou Chicken, as a brand, can achieve similar achievements and become a powerful brand, with hundreds of stores, thousands of employees, and also gross over $1 billion per year. How will we go from having 8 stores to becoming a national giant? Teamwork, imagination, and effective and goal-centered marketing can propel a business to grow exponentially instead of gradually.

The real secret to exponential growth is teamwork  because without a powerful team, nothing meaningful or powerful ever gets accomplished. Even Christ used 12 people to change the whole world. Teams are important because the ideas and effort of one person only goes so far. I find that in our business, for example, I push hard and achieve much certain weeks, and some days I am completely exhausted and achieve very little. Those are the days I appreciate my brothers, my mother, our managers, our employees, our distributors, and all of the other people that make Zankou Chicken the business it is today. People often look from the outside and expect that a success is churning out cash. They often fail to realize that all of the time it is human beings and our energy, optimism and teamwork that make all of this possible. Albert Einstein said that imagination is more important than knowledge. When I was a kid I was not sure what he meant by that, but growing older it’s easy to realize the important of imagination on our jobs, our lives, and on the power of imagination to grow a business. Just as Einstein must have been bored with old formulas and came up with new ones (E=MC 2…) , we must set aside some time off our day to be able to stop and think about new ideas and change in our business. Powerful companies like Apple can pay people to do this, but it may be in the best interest of a small business owner to set aside time and do this routinely.

I find that some of the best ideas I’ve had come from just sitting at the restaurant, doing nothing, just watching the customers. This is more than mere mediation as I often observe what they are doing, how they are interacting with the menu, where they are seated…etc. I often approach many customers and talk to them about how we can do better, what new items (if any) they would like to see added. In the last 3 years alone we have added 8 entirely new items and two side dishes simply from talking to customers and getting feedback.

In class at UCLA we’ve often talked about a certain “disconnect” that can happen when customers watch a commercial and that does not meet their expectations of the product in real life. This is one reason why I prefer word-of-mouth and genuine feedback to paid commercials. But we also talked about how paid commercials, when done well, can have a viral impact on your business. A commercial that is funny, radical enough to be noticeable, and offers something of value to the consumer besides simply being in their face, are the one that shines through. A strong brand is one that

  • Instills trust
  • Stimulates Retail (in measurable numbers)
  • Commands Higher Prices
  • Creates Differentiation
  • Inspires Loyalty

A brand’s position is where it stands relative to the competition in the minds of others. Zankou Chicken customers know, for example, that we use organic eggplants to make our mutabbal every morning. They know our bread is baked fresh from the factory in Santa Ana. They know we only use California made and grown garlic. They know these things because we have stated them on the paper menus as well as our web site. Can we do a better job of educating our customers about the health benefits of our products? I am sure we can. One issue at stake right now is the stating of calories and fat content within our foods. The recent bill president Obama signed orders all restaurants with 20 or more national chains to post calorie and fat content in their products. We have less than 20 stores so we may legally avoid this law, however it may be in our best interest to start our research and actually prepare a separate menu detailing the calories and fat content of all our products. One way we could reduce the possible negative impact of such a move could be to state each item in a plate as a separate entity. For example, a beef shawerma plate consists of vegetables (tomatoes, onions, beets, chilies,), tahini sauce (a sauce made with sesame seed, salt, oil, and garlic), hummus (a paste made with Garbanzo beans), and the meat itself (USDA Choice or higher quality…etc). I am sure not every person finishes this entire meal. We have never done the complete fat content and calorie analysis at a lab for this item, but I am guessing that if we do, this meal would likely be above 1,000 calories. But by knowing each separate item contents, consumers can make a better choice about what to include and what to replace (we give them the option of replacing tahini for rice as an example). It may be a more informed choice.

Powerful Brands must be consistent. I posted a recent article on our Ning that illustrates what can happen when a brand is not consistent. Due to previous family issues, not all Zankou Chicken are run by us. The article that was listed, http://www.latimes.com/business/la-fi-zankou18-2010mar18,0,573630.story

points to the fact that not all Zankou’s seem to be the same. This does have a detrimental impact on our branding. How to solve this problem? IMC policies seem to point to doing all things at the same time, so we would have to change something, implement it quickly, and advertise it efficiently. We are working with a company called Dreamentia to come up with ideas on changing our brand so as to not cause customer confusion. We run and operate 8 of the restaurants in various cities, and my aunt and cousin operate 3 stores in Hollywood, Tarzana, and Montobello. As we learned, brands are difficult to build and maintain but easy to destroy. We are aiming to change the name up a bit. Instead of having it just be “Zankou Chicken”, with this new strategy we would have it be “ Zankou Chicken: Fresh Mediterranean Grill.” Underneath the signage we could have something that reads” Shawerma, Falafel, Shish Kabob.” I don’t know if this would be too much information, and I’m sure Dreamentia can help with some of the details and design, but I believe this would both help consumers realize what we offer and also help us distinguish ourselves from our cousins’ and aunts’ stores. Eventually, the ideal situation would be one where we get some investors and buy them out completely, because I agree with the text and the class notes that say a brand must be consistent and should not differ in the eyes of the people.

The 4 C’s of marketing consists of:

  • Customers
  • Competitors
  • Company
  • Community

 

While I would say we are mostly a customer-focused organization, all of these elements are equally important if one is to succeed in the marketplace. Our organization must simultaneously meet and exceed customers expectations, keep competitors at bay, maintain a strong company value and ethics system, and foster a deep relationship within the community it serves. A lot of this is easier said than done, however in time some of these processes have become easier with experience and with a gradual evolution of getting better at certain things. For example, we have developed a system where if someone wants a donation, we don’t just give food or money away for nothing like we used to a few years ago. We ask that the group pay for 50% of the order by cash or credit a few days in advance, that they provide a letter of donation with their tax-exempt federal ID number, and that they help us market by distributing our menus at the charitable event, which we help cater. This happened over time, as we realized how to better serve people that make such requests without having to lose money outright. The program works rather well, as we will be making a sizeable donation to a local high school this weekend from our Pasadena location. Can we do a better job of letting people know about this program? Yes we can because the web site does not list this program right now, and few people are even aware that it exists. Only those that ask via email would find out we are doing this. The fear is that if we publicize it too much, we may end up getting too many requests and our stores may be overwhelmed, but I am sure there is a smart way of doing it.

If I were to create a product for launch, an item that we do not currently sell, my product of choice would be a baked potato wedge. I say baked and not fried because we are a restaurant that prides itself on health and freshness. Often we get asked for “garlic fries” as well, but baked wedges would go great with our wraps, and we currently do not have any combination item on our menu. Years ago, customers would plead with us to add rice to the menu, and 2 years ago we did. Right now steamed basmati rice is one of our top selling side dishes. They also demanded tubule salad, which is salad made using parsley, tomatoes, onions, lemon and oil. This also sells well, however none of these items make for a solid combo item. Up selling is huge in our industry, and some garlic-infused, marinated and baked potato wedges fits perfectly with our other dishes. We could even offer it to every customer.I imagine the interaction to go something like this:

 

“Hello how are you and welcome to Zankou Chicken”.

“ Hi I’d like 2 Tarna wraps and 1 falafel wrap please, no tomatoes on the Tarna wraps.”

“Sure, would you like potato wedges (insert trademark name for this future item) to go with that? You can save a dollar if you do the wedges and a drink.”

 

Up selling is huge in our business because profit margins are low on our food items. The drinks have the highest profit margin, anywhere from 80-95% depending on who you ask. I estimate ours to be in the 90-95%. Food items are extremely costly. We use USDA choice or better-cut steak for our meat, and fresh American chicken for our poultry that comes directly from the farm. The profit margin on these items is slim, anywhere from 15%-25% depending on the item. The reason we up sell is to add to the profit margin, and I believe this to be a great fit with the rest of the menu.

 

Regarding the change of name, I believe the addiction of the description certainly helps. Often, people driving by do not notice us right now because it just says “ Zankou Chicken”. What if someone wants to have beef and not chicken? What if they are craving falafel and are vegetarian, or they want to have a barbecue kebob selection for their family? I believe the signage we have right now is woefully inadequate.

 

There are good things and bad things about working in a family business. On the positive side, you are all blood related and the team has to work together no matter what. Family business stay close and often succeed, but sometimes stress and time get in the way and family business break apart. On the negative side, family-run business are often closed-minded and immune or other not perceptive to outside influences and people. The opinions of others are often not respected, even if this person is a professional with a merited background. The “family knows best” theory, which is never tested nor proven, goes unabated and unchallenged for years, sometimes decades. It is difficult to put a needle to the inside circle of a family and make this bubble pop, exposing the business to new ideas and new directions. Another negative feature of working in a family business is sometimes people are taken for granted. Because so much family is involved, sometimes people forget to respect each other during the day because of stress or pressure. While it may be difficult to be rude or insensitive to a teacher or classmates or other executives, people within a family business are often rude to each other and take each other for granted.

Social Media

We talked a lot in class about social media (at UCLA Extension where I took these classes and hope to soon create and teach a restaurant marketing class catered around the book I am writing, which will be based on this blog) and its effect on our businesses and on IMC strategy.    I helped develop a fan page on Facebook for Zankou Chicken as well as a group page. I advertise for it every month with a small budget allocated particularly for social media. In addition to this, the official web site contains a link that takes people directly to our Facebook fan page. After speaking to Dreamentia and some other marketing professionals, I came to realize that our social media advertising was woefully inadequate. One thing that was mentioned and that we talked about in class was, social media marketing is a do or die type of strategy. A company has to be willing to go all in; or they should probably not be advertising online at all. For example Spinkles cupcakes, based in Beverly Hills with a few other locations, declares a new word on their Facebook group page every morning. The first 200 customers that mention this secret word get a free cupcake with their order every day. Needless to say their Facebook page is very popular. Because ours is a family business, it may be difficult to convince everyone to try something like this, but it might be very powerful viral marketing.

Our Facebook page has close to 800 members while our fan site has over 1,000 fans. Spinkles Cupcakes is approaching 119,000 fans. Needless to say, they are doing a much better job of advertising on Facebook, even though they supposedly do not spend any money on advertising. It is this type of genuine viral marketing that works. This is marketing based on a high return of investment, and not one based on spending thousands of dollars and doing television commercials just to get your name out. The same applies to Twitter and Myspace, although we did talk about the declining power of Myspace and how they have done a poor job of catching up to Facebook and other social media sites like Twitter and even Yelp that have leaped by miles while Myspace has retreated heavily and lost million in the last 2 years. A good social media strategy is one where you would:

1) Offer contests, insights, and exclusive events

2) Is continuously promoted both online and offline by ads and placement (posters or placards at restaurant, on written menus, on web site….etc)

3) Monitored for SPAM’

4) Allow users to speak and be heard; even if it is negative (as long as it’s not vehemently poisonous or personal).

5) Linked to the various web sites (official web site, Twitter account, etc)

6) Promotes other media (for example your magazine ad should point to your site, your TV ad should point people to your Twitter account, etc)

7) Be a focused and powerful strategy rather than an afterthought (this is where we are today in my organization).

 

Different Avenues of Marketing

Last but not least we discussed different avenues of marketing. Television, the internet, billboards, and direct marketing all have their positive and negatives. The pro IMC marketer will target his or her audiences carefully and choose the advertising that shows measurable results. I would target all of the avenues simultanouesly and measure which is best, and move forward on that note.

In retrospect I learned the most from this class not from the text (although Selling the Wheel did start off very powerfully with the professional salesman character but got a bit boring toward the end), but from fellow classmates and a lot of the lectures. The Sup bowl ads were among my favorite, as were the introductions the new and exciting web sites like foursquare and many concepts I was not familiar with,. I truly appreciated it and made some new friends along the way. I look forward to implementing some of these specific ideas in the near future. ’s of marketing are product, price, place, and promotion. All are equally important in our business. The idea I have for the new business is to do something like a “Zankou Express”. This would be something similar to what Panda Inn did in Glendale. They opened a “Panda Express” store in Glendale Galleria in the 1980’s and went from a small family business to an empire that stretches various cities, over 1,200 stores, and over $1 billion in annual revenue. That’s an amazing achievement, and I believe that Zankou Chicken, as a brand, can achieve similar achievements and become a powerful brand, with hundreds of stores, thousands of employees, and also gross over $1 billion per year. How will we go from having 8 stores to becoming a national giant? Teamwork, imagination, and effective and goal-centered marketing can propel a business to grow exponentially instead of gradually.

The real secret to exponential growth is teamwork because without a powerful team, nothing meaningful or powerful ever gets accomplished. Even Christ used 12 people to change the whole world. Teams are important because the ideas and effort of one person only goes so far. I find that in our business, for example, I push hard and achieve much certain weeks, and some days I am completely exhausted and achieve very little. Those are the days I appreciate my brothers, my mother, our managers, our employees, our distributors, and all of the other people that make Zankou Chicken the business it is today. People often look from the outside and expect that a success is churning out cash. They often fail to realize that all of the time it is human beings and our energy, optimism and teamwork that make all of this possible. Albert Einstein said that imagination is more important than knowledge. When I was a kid I was not sure what he meant by that, but growing older it’s easy to realize the important of imagination on our jobs, our lives, and on the power of imagination to grow a business. Just as Einstein must have been bored with old formulas and came up with new ones (E=MC 2…) , we must set aside some time off our day to be able to stop and think about new ideas and change in our business. Powerful companies like Apple can pay people to do this, but it may be in the best interest of a small business owner to set aside time and do this routinely.

I find that some of the best ideas I’ve had come from just sitting at the restaurant, doing nothing, just watching the customers. This is more than mere mediation as I often observe what they are doing, how they are interacting with the menu, where they are seated…etc. I often approach many customers and talk to them about how we can do better, what new items (if any) they would like to see added. In the last 3 years alone we have added 8 entirely new items and 2 side dishes simply from talking to customers and getting feedback.

God willing, we’ll have a “Zankou Express” one day where customers can get our food they love so much just as fresh as it is today but only faster? Perhaps we can cook the chicken and kabob in the back and just keep bringing it forward much like Chipotle and Panda express do now. Only time will tell. Do customers even want that? What do you think?

 

3 thoughts on “Exponential Growth

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