Your Catering Business Model:
Apply the FEED Formula
By Jim Rand, catering practice leader.
You’ve committed to building a new catering business. Now it’s time to create a winning action plan. I use the acronym FEED to stand for the four pillars needed to support your catering action plan.
This article provides an overview of FEED. Four subsequent articles will explain its pillars in detail. If you’re hungry for insights to strengthen your catering business, allow me to FEED you now.
Remember that the foundation of a skyscraper is what keeps it from shifting or tearing as the wind blows. Likewise, every successful business is built upon a solid foundation. That this base supports the structure, and can scale up and withstand pressure over time, is critical to profitability and sustained growth. Here are the key foundational elements for catering:
Menu and Branding
- Choose your target catering customer: B2B, B2C, or both.
- Populate your catering menu with items from your restaurant menu to ease execution for your team and provide customers with familiar offerings.
- Brand your catering program consistently with your restaurant’s branding to leverage its reputation.
- By providing omni-channel ordering, you can make ordering easy for the customer.
- Point-of-sale (POS) and back-of-house (BOH) integration keeps all orders in one place and facilitates production management.
- Applying customer-relationship-management (CRM) and sales management tools promotes marketing and customer loyalty initiatives, holds your sales team accountable, and captures relevant customer data.
- Use software to track the sales and receivables of your catering operations to improve cash management.
Facilities and Logistics
- Know where in your restaurant you will produce catering orders.
- Know during what time periods you will produce catering orders daily.
- Learn what additional equipment is necessary for adding a catering program.
The customer experience of your catering service should match that offered at your dine-in restaurant.
Service Offerings. How will you handle the following services based on the needs of your brand and your ability to execute?
- Order pickup
- Order drop-off
- Onsite set-up
- Attended events
Branding must be consistent with your overall brand identity. Be deliberate in how you brand:
- Logos on, and labeling of, packaging
- Content and copy on menus, websites, and marketing collateral
- Uniforms, hats, shirts, aprons, jackets
- Delivery equipment and vehicles
Customer Touch Points. Every customer interaction is an opportunity to build your business. To improve these touch points you can:
- Standardize the sales processes (see Demand below)
- Train and develop scripts for answering the phone
- Standardize order taking
- Establish the point of delivery or pickup with customers to confirm location
Relationships. Go beyond transactions and grow the lifetime value of customers by doing the following:
- Choose team members who have a passion for customer service.
- Choose external partners (delivery, call centers, etc.) who share your vision and represent your brand well.
- Conduct follow-up and “care calls” to ensure products and services met expectations.
You need to be brilliant at the basics. All the brand aligning, demand driving, and technology-assisted investments will go for naught if you can’t give customers the food they want, on time, and of a level of quality that meets their expectations.
Know What Matters to the Customer (learn more about this)
- Ease of ordering
- Order accuracy
- Order delivered, or ready for pickup, at the expected time
- Food meets expected level of quality
Have a Designated Leader for Catering
- Choose someone who “owns it, lives it, breathes it.”
- Establish goals, responsibilities, and time frames for achievements and milestones.
- Decide on an adequate pay structure and scaling appropriate to the growth and size of your organization.
- Decide whether you’ll pay this person hourly or salary wages.
- Provide incentives such as tips and a bonus structure.
Create Standard Operating Procedures (SOPs) for the following:
- Forecasting sales and staffing needs
- Scheduling labor
- Taking orders
- Pre-staging orders for the next day
- Production procedures
- Order-packaging procedures
- Delivery procedures
- Delivery and service fees
- Customer-order pickup procedures
You know the line, “If you build it, they will come”? That strategy came from a fictional movie and rarely works in restaurants. So how do you plan to create demand for your catering business by marketing to your targeted customer?
Developing Marketing Tactics. You can build your strategy on the following marketing tactics:
- Customer targeting
- In-store, POP, banners, signage
- Digital: Facebook, Linked-In, SEM
- Outbound (call center)
- Branding and collateral materials
- Traditional media
Building a Sales Team
- Commit to hiring experienced sales professionals who can drive growth.
- Set sales goals and incentivize team with perks and bonuses.
- Utilize software to measure and track sales efforts (i.e., calls, lead generation, follow-ups, deals closed).
- Create healthy competition between salespersons using “spiffs” and perks.
Expand your marketing partnerships with:
- Call centers to manage orders
- Third-party marketplace and delivery companies to outsource delivery
- Credit card companies that can share essential customer data
- Food and beverage vendor partners who can help with branding or equipment
Expanding the Opportunity
- Build long-term customer relationships with communication and follow-up.
- Implement a customer loyalty program.
- Figure out how to never say “no” to a customer request.
None of the FEED principles stands alone. You can’t execute without a solid foundation, for example, nor can you create an experience without a menu. All four pillars must be integrated for your catering business to work. Building a profitable catering business is challenging and takes forethought and effort. Use FEED as your road map for building a winning action plan that makes your sales grow.