With the right venue opportunities, onsite operators can successfully tap offsite customer traffic.
The next time someone you know raves about “a great little bagel joint” they just visited, consider this: such word of mouth advertising can work just as well to build onsite transactions as it does for streetside businesses.
That's if your operation has a venue with at least some access to off-campus or streetside traffic, where “you never know who you're dealing with on a daily basis,” says Troy Nelson, GM of Foodservice Operations for Aramark Business Dining at the Dallas headquarters of a global telecommunications company. There, Aramark operates three outlets: an employee dining facility, a smoothie and juice bar and a licensed Einstein Bros. Bagel store with public access.
“Our primary customer is first and foremost the employees within the building,” says Nelson. “Our secondary target is the public population within the immediate area.” At Einstein's, he says the goal is for customers to have the kind of positive experience that will encourage them to tell two or three friends about the operation, essentially creating a grassroots marketing campaign.
While such objectives aren't new to onsite operations, today's more sophisticated branding and interest in finding incremental sales and intercept marketing opportunities are leading a surprising variety of operators to expand their customer bases in this way.
Coffee shops, convenience stores and many other onsite service points have potential in this area. Even some in-house cafeterias can sometimes reach out to non-traditional customers, as Kettering Medical Center Director of Nutrition Services Cheryl Shimmins discovered when she introduced the hospital's “Years Ahead” program for seniors.
“Individuals who participate present a ‘Years Ahead’ card and get a 20 percent discount,” she says (employees get a 25 percent discount and ‘double-dipping’ is not allowed). While Shimmins admits the number of customers the program brings in is modest, “it is a real customer pleaser for those who take advantage of it. They tend to be regulars and also are great marketing representatives for the hospital to the outside world.”
Similar senior dining programs exist at many other healthcare facilities, including the Santa Monica branch of UCLA Medical Center and Lumberton, North Carolina's Southeastern Regional Medical Center.
Obviously, having the right kind of location is critical to making such initiatives more than just modest PR-enhancing sidelines. At Brigham Young University, four different campus outlets attract off-campus traffic. The largest of these is BYU's Creamery on 9th (a combination convenience market and ice cream shop/grill) which rings up over $4.5 million a year in sales.
Almost 26 percent of the store's traffic is from off campus, according to BYU's director of dining, Dean Wright, making it a significant source of income for the program. He cites multiple factors: the location right on a main thoroughfare on the edge of campus; the fact that the area has lots of seniors, but no large grocery store; and the store's product mix, which appeals both to casual diners (ice cream and grill items) and to grocery shoppers (fresh meat, produce, a wide selection of grocery items and other staples).
Wright's other operations that appeal to the public include a new “outlet store” where BYU sells over-run baked goods and other production from its central production facility, its Legends Grill and its takeout catering business, BYU Food to Go.
On the business side, Wright cautions other operators who wish to develop such opportunities to make sure they follow appropriate accounting procedures for recognizing income that may be subject to “unrelated business income tax” (UBIT). At BYU, each location performs month-long polls each October and April, asking every customer about the nature of their purchases. The data is logged directly on the POS system and used by the school's accountants to establish the percentage of sales subject to the UBIT tax.
Wright also notes that despite the dining department's success managing UBIT, it does not promote its facilities outside the campus.
There's no doubt that colleges and universities in urban locations are more likely to have opportunities along these lines because of the number of satellite points of service they typically support. Still, taking advantage of an opportunity requires careful analysis of customer and traffic pattern potential.
At the Yale University campus in New Haven, CT, the Durfee's convenience store faces Elm Street, a public thoroughfare, and is right on the local bus line. It is also just a few blocks from the city post office, library, courthouse and other municipal buildings.
Directly across the street, Yale also operates its Thain Café, a coffee/bakery shop in the basement of another campus building. Thain features a product mix focused on sustainable and natural products that appeals to the student customer base.
“We ran some focus groups and found that many of the city workers had set coffee breaks at about 10 a.m., but our operations were just opening their doors at that time and weren't ready to tap that potential business,” says Tom Tucker, Yale's director of retail development and operations. “We also found they wanted a greater variety of items, including some that weren't so sweet.”
In response, the department began opening both venues 30 minutes earlier and also added items that would appeal to this older customer base. Tucker says another change was to keep Durfee's open during the summer, when it had traditionally closed.
“Despite the fact that most of the student traffic disappears, it was inefficient to shut the store down,” he says. “It always meant eliminating all of the inventory for a few months and then re-stocking it.
“This past summer, we restructured our labor and overhead and kept it open. We also struck up a partnership with an ice cream vending company and installed a machine that makes ice cream in front of you. We put a sandwich board sign out in front of Durfees to promote that and picked up a significant amount of street business from that.
“Even small changes can help you bring in non-traditional revenue,” Tucker adds. “Every dollar you can attract that doesn't dilute your meal plan revenue is a plus.”
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A similar dynamic can be found at Boston's Northeastern University (profiled in the October issue of FM) where the new International Village dining commons “is located on a side of campus where there aren't many other dining options, public or private,” says Maureen Timmons, director of dining services. A combination Jamba Juice/Peet's Coffee and Tea concept is located right outside the dining hall entrance, at the front of the Village.
“The dining space has glass walls, so anyone walking by on the street or getting off the train can see what we have to offer,” says Timmons.
“The Boston Police station is nearby, so the officers stop in for lunch all the time. We also see a lot of other professional-type diners, which we didn't expect, but certainly welcome! With this concept, we're bringing our community into the equation. It's like having your neighbors over for lunch again and again. They become a part of our success and we become a part of theirs.”
A little over a mile southeast of NU, Boston Medical Center offers a full complement of retail operations that include two Profiles Cafes that feed over 2,000 people daily, an Outtakes Kiosk that offers grab-and-go selections, Starbucks coffee and other convenience items, as well as two Outtakes Gift Shops that are a hybrid of food, convenience and essential gift shop items.
“We estimate that approximately 30 percent of our customer base is coming from other buildings and off-premise,” says David Maffeo, BMC's general manager for EVS and Food Services. “Our offerings have evolved over the past year to include gourmet salads, upscale sandwiches, unique parfaits, and an overall more enhanced product mix that better meets the expectations of our patients and families.”
With a bevy of retail oriented options to choose from, BMC's marketing strategy is simple: utilize the culinary expertise of the Compass Group and the minds of the marketing team while supporting and encouraging the dedicated workforce to collectively offer “an experience” to everyone that enters any of the five foodservice outlets.
“Our customers have dozens of dining options to choose from in this city. So it is imperative that we pique their interest to choose us,” says Maffeo. “In order to do that in a hospital setting, we strive to be more mindful of the sensitive nature of our community and our patients.”
As part of that philosophy, BMC created a training program to teach front of the house employees how to provide empathetic and respectful service to all customers. “This philosophy has not only worked to bring in a substantial amount of street traffic but it has also allowed us to infuse much needed revenue into the hospital,” Maffeo says.
With “going local” all the rage, Emory University in Atlanta has found a unique way to leverage this trend to attract a substantial amount of street traffic.
In 2009, the foodservice operation, run by Sodexo, made the strategic decision to outsource a key retail unit to a local restaurateur, Tarek Tay, who opened a fast causal concept called Zaya on campus. Zaya replaced a grill concept and serves more healthful, Mediterranean foods to students, while also opening the door to attract customers from nearby neighborhoods and businesses.
“Bringing a Mediterranean themed menu to Emory created a lot of excitement on campus,” says Cynthia Gomes, director of marketing. “Plus, Zaya is a local restaurant, so there was a ready-made following in place.”
The momentum from Zaya led to another partnership with the same restaurateur to outsource Caffè Antico at Emory's Michael C. Carlos Museum.
“The museum attracts a much different demographic, including seniors, children and teens,” says Gomes of Caffè Antico, which offers seasonal menus of salads, sandwiches, and entrées as well as healthful take-out options. “And, since it is open year-round, it is a favorite upscale offering on campus enjoyed by faculty, administration and students as well as doctors and nurses from the nearby hospital.”
A third campus retail location, near the Centers for Disease Control, is Cafe Montage. Located in the 1599 Building, the cafe caters to Emory staff as well as the surrounding buildings that house the School of Nursing and School of Public Health.
“The key is getting the word out about the hot breakfast and lunch specials that set this cafe apart from other dining options in the neighborhood,” says Gomes. “We do that by working with the museum in eNewsletter campaigns, catering events and other promotions.”
Finally, in late June 2010, a large, full-service Starbucks opened on campus that has attracted business from the surrounding neighborhoods and local businesses.
“Street traffic is great filler business in the summer and during break periods, and an additional layer of business during peak times,” says Gomes. “It is important to look at this segment in order to maximize our profitability. We have to be open, and with that comes overhead. Supplementing our core business helps us maintain our margins.”
To attract street traffic, Emory's core marketing strategy has simply been to create convenient options for customers.
“As with attracting any business, there is a lot of competition for dining dollars,” says Gomes. “Emory is known for our sustainability practices. The produce, meats and poultry featured on our menus are a showcase of the best in local and regional fare. Our special events at the farmers market bring in well known chefs and a unique group of local vendors. These types of initiatives help us weave ourselves into the community and bring the outside in.”
“We advertise in the school newspaper,” says Cynthia Gomes, director of marketing for Emory University. “We've also worked with community newsletters, used mailing lists from our databases, created frequent diner card programs and started sending electronic newsletters.”
“We established relationships with several condo and apartment complexes, a downtown Dallas non-profit organization and local buildings like the Dallas Public Library,” says Aramark's Troy Nelson. “One of the best marketing moves to attract passers-by was to simply place a sandwich board sign on the sidewalk to let people know that our café was in here.”
“Simple exposure on the street, letting folks know we are here has been effective,” says Troy Nelson, general manager of foodservice operations for Aramark Business Dining at the Dallas headquarters of a global telecommunications company. “We've been limited in what we can have for signage on the building, so we chip away at that by smaller signage throughout the adjacent plazas and sidewalks.”
“We have our staff stationed in the lobby or out on the sidewalks sampling items or handing out marketing pieces with coupons or special offers,” says Nelson.