Philadelphia has made some impressive travel destination lists over the last year, and we owe some of this attention to our food entrepreneurs. Despite the challenges of starting a business, we have what seems like a constant flow of new restaurant openings. The vibrant “foodie scene” has elevated the quality and creativity of our restaurants and craft food and beverage artisans, and along with it, customer expectations. As a former coffee shop owner, I’ve experienced firsthand how difficult surviving in the food business can be. In my experience, the two leading threats facing food businesses today are online customer reviews and Health Department compliance.
For better or worse, consumers now have outlets like Yelp, which can pose a serious threat to small business owners on one hand, and a valuable marketing tool on the other. And then we have compliance. As of March 2016, the Philadelphia Health Department has the power to shut down businesses with health code violations. Once the Health Department issues the violations, Philly.com’s CleanPlates column broadcasts restaurants’ food safety shortcomings to the public. While a lot of operators would rather ignore these threats, they are both controllable. One part of the solution is staff training. At the start of the Nutter administration, I participated in a roundtable discussion with other entrepreneurs at the Mayor’s Office. This also happened to be the time when Yelp was gaining in popularity, and I wasn’t sure yet how to deal with it. During the discussion, we were asked how the administration could help our businesses. I answered desperately “a workforce trained in hospitality.” Customer service training is certainly part of the solution, but what I came to realize is that more comprehensive Reputation Assurance needs to be part of the modern day food and beverage business plan. Fortunately, I was able to craft a successful program to combat these threats, and now I work with other businesses to improve and protect their reputations.
Yelp & Online Reviews
With the rise of social media, public and often cruel criticism of businesses has become a national pastime. But if you don’t play ball, you’re shooting yourself in the foot. According to Michael Luca, Ph.D, assistant professor of business at Harvard’s School of Business, a one-star improvement in Yelp ratings can increase revenue by 5-9 percent. Conversely, if your rating drops by one star, your revenue could drop 5-9 percent. Since Yelp is GPS based, the user will open the app and search for “coffee,” for example. All coffee shops in the area will show up in a list, or in a map view. If you’re not familiar with the area, you’re going to choose the closest option, and when there is more than one option, you’ll likely choose the listing with the best rating. Now imagine your business is located near a famous tourist destination. When the competition started moving in around my former coffee shop, I knew I had to play ball and work on that 3.5 star rating—my new competitors had 4 and 4.5 stars! For a long time, I came up with excuses for it, and wished Yelp would just go away. Well, it didn’t. It got more popular, especially with my target demographic of tourists. So, I stopped making excuses and implemented a customer service culture and a social media campaign that encouraged positive reviews. It worked! Within three months, we were at a solid 4 stars, and we saw an increase in revenue and positive word of mouth.
Health Department Compliance
Health Department annual inspections have become stricter, and more publicly available, thanks to Philly.com’s Clean Plates column. Until we have A-C ratings on the front door of food establishments like so many other cities, this column does the job of shaming businesses for non-compliance. But do the inspections actually help businesses be compliant? According to a Clean Plates article about John’s Restaurant*, owner John Doe doesn’t think so: “The supervising sanitarian was not only strict and knowledgeable, but completely eye-opening and fair. However, he did not offer remedies. It’s not his job to tell you how to fix things. His job was to come in here and catch the things I wasn’t catching.” While that is true, it is not the sanitarian’s job to tell him *how* to be compliant, it cost John’s thousands of dollars in lost revenue after being shut down for four days. If this business actually relied on the neighborhood for business, and not a transient tourist population, this might have been the kiss of death for John’s. That’s a really expensive and risky way to learn about food safety compliance. Besides, how many people got sick before the health department showed up for their annual inspection? Business owners are required to take food safety training to get the business open, but with a 70% turnover rate in this industry, it can be cost prohibitive to keep all supervisory staff certified. Studies also show that the cost of resolving a food safety issue becomes exponentially more costly the longer it takes to discover the problem. National Restaurant Association figures show that one foodborne-illness outbreak can cost an operation thousands of dollars and even result in permanent closure. However, food establishments can provide in-house food safety training, and conduct self-inspections at minimal cost. Even just training the staff to wash their hands properly can reduce the risk of food contamination considerably; it’s the most common cause of foodborne illness. And if you want to stay ahead of the inspector and off the Clean Plates column, it’s a worthwhile investment!
Implementing a staff training program that covers customer service and food safety is a good first step to earning rave reviews. But the work doesn’t stop there. In this day and age, you need a social media campaign that controls the narrative, and encourages positive reviews. Ignoring Yelp and making excuses won’t increase your sales. If you’re in business, you’ve probably already made a substantial investment. But healthy businesses require ongoing improvements and investment; if your ratings and profitability aren’t where you want them to be, now is the time.