Futureproofing Your Restaurant with Alonso Castañeda

SPEAKERS

Alonso Castañeda, Zack Oates

Alonso Castañeda (preview)

So, if you want to futureproof your brand, in my opinion, right now do anything you can to have systems in place to digitize as many customers as possible.

Zack Oates

(Intro) What’s up? Zack Oates here – author, entrepreneur and customer relationship guru. Welcome to Give an Ovation: Growth strategies for restaurants and retailers, where we find industry leaders to share their secrets to grow your business. This podcast is sponsored by Ovation, the actionable guest feedback tool that works on or off premise and is easy, real-time, and actually drives revenue. Learn more at Ovationup.com.

Welcome to another edition of Give an Ovation! I am joined today by Alonza Castañeda who is the VP of Brand Development and Strategy at Savory Restaurant Fund which has incredible brands like Crack Shack, Mo’ Bettahs, Swig, R&R BBQ, and Via 313. His background includes running operations at Cafe Rio and Paradise Bakery Cafe. He is a strategist, coach, and overall just great guy. And who I just found out today is energized by rainy cloudy snowy days. So Alonzo thanks for joining us today on Give an Ovation.

Alonso Castañeda

Hey, thank you, Zack. I really appreciate that. First time caller, longtime listener. You must be the first guy I know that has radio voice, but still has a good looking face! Good job, man.

Zack Oates

Oh, man. You’re buttering me up! Are you on my podcast or am I on yours? So first of all, obviously, you’ve got a lot going on. I’d love to hear just like what, what are the things that keep you busiest right now? You’re running all these, you got all these brands that you’re helping out with in terms of, you know, brand development and strategy. And you’re, you’re in a really interesting spot, because you see a lot of things and you’re really, you got your fingers in a lot of honey pots. So what keeps someone like you busy?

Alonso Castañeda

Oh, man, you know, everything you said, I love every minute of it. Right now we have five brands in our portfolio. And they’re all at different stages. This has been a big growth year for us. Between all of the brands we have about between 45-59 stores opening this year. So, that’s keeping me a little busy. You know, and then of course, with that, I mean, that growth just touches on the development of our management team and our marketing strategy and the customer experience. You know, as brands hit certain stages, we got to think about different ways that we are… different avenues, to bring in revenue, to pay attention to different areas where the customer is living, and making sure that they’re having a good experience, anywhere they’re touching the brand.

Zack Oates

So, and for those people who might not know the Savory Restaurant Fund, you guys find brands and really partner with them as young brands that have kind of, they’ve proven themselves but they’re very young, right? Maybe three, four locations typically?

Alonso Castañeda

Yeah, anywhere from – anywhere from two to six or eight.

Zack Oates

Okay, and then you really partner with them to grow it to 100+ locations?

Alonso Castañeda

Yeah, we, we, we definitely partner with them. It’s a very unique approach, we partner with the brands, we work shoulder to shoulder to set a good foundation first, if they have four units, we set a good foundation, put some good systems in place. And at the same time, our development team is working hard on the construction side finding new units as we’re, you know, putting some jet fuel on the engine with systems and and then we start scaling the brand. And we, all of our brands, we grow a little correction there – we grow them to about anywhere between 35 and 50 locations depending on the concept. Yeah, so, so our model is to add value to the brand. Have a proven concept and multiple states. Scale the brand, keep it profitable, make it an emerging concept. And then find the buyer that wants to take the brand and you know, grow it from 40 to 400.

Zack Oates

Got it, got it. Yeah, and you guys are phenomenal at doing that and seeing how you’ve been able to work with different brands, with different cultures, and even though they kind of come into the savory fund, they they don’t lose their soul, right? Like, you guys have done a really good job in helping these brands stay true to their brand, while giving them the the framework and the structure to really grow and expand. So I think it’s been cool to see because you go to different Savory Fund Restaurants, you don’t know! You don’t know that they’re different restaurants, it all just, it feels like its own brand. So good on you guys for that.

Alonso Castañeda

Yeah, you know, thank you for saying that. Because that is very important for us. One big piece that we care so much about is that we will only partner with brands where the founder wants to partner with us. And, and and, you know, truly work with us. So we’re building the brand together. Nothing wrong with the founder saying, “No, I want to sell my brand 100%. I want to retire.” That’s fantastic. But that’s not our model. We want the culture they bring, the feel, the knowledge, because at the stage that we partner with them, they’re still very young. So we need, we need that knowledge to continue that culture in that field.

Zack Oates

Yeah, absolutely. Now, a lot of people ask about all the things that have changed, right. And I think that you can write, you know, 10 books, and still be a few books shy of like, things that have changed in the restaurant community during 2021. I want to find out from your perspective of seeing these different brands at different stages. What hasn’t changed? What do you feel like has remained constant throughout this craziness we’ve called the last year and a half?

Alonso Castañeda

Customer expectations – that has stayed the same, you know. They still want great service, they still want fast service, they still want high quality. And they care that you’re, you’re not forgetting your basics and making a ton of mistakes in their orders. Especially for all of us as consumers, it’s frustrating. When the off-premise business has increased so much. You know, that’s one of the things that that’s the thing that changed the most probably, is the volume of businesses that now is being consumed in-home. And if you’re not careful with those mistakes you’re making, there’s nothing more frustrating than getting home with your favorite salad and they forgot the dressing.

Zack Oates

Oh, yeah, right. Or I remember one time my wife was pregnant. She was in like, you know, I think it was like a week before our first child was was born. So she was home – didn’t want to move. I went out and I got us some salads. I brought it home, and inside the salad was the like a plastic bag. Right? And it was like, like, a whole big plastic bag inside the salad! And it was like, how, how did this even like, get in there? And then second of all, it’s like, what? Who do I, Who do I tell this to? You know, like, it was just one of those like, really frustrating moments. And I haven’t been back since, right? It like, left a really bad taste in my mouth. But I think it’s one of those things where if I was in the store, someone would have solved it, right? Someone would have like, fixed that problem. And at least refunded the meal or got me a new thing, whatever. But I think you’re right. It’s like, it’s very frustrating when you lose control. But it’s not happening in our dining rooms. It’s happening in their living rooms. Right?

Alonso Castañeda

Yeah. So,the customer expectation hasn’t changed it but now they’re leaving our restaurant right away. And so the, the chance of not being able to recover the guests, when they’re upset, is a lot more painful. Because they’re minutes away, they’re hungry. And if it’s a busy night, then I don’t want to come back and mess with all that traffic and waiting and all of that.

Zack Oates

That’s a great, that’s a great point. Because people aren’t more forgiving just because things have you know, the venue has changed. You know, I think that’s that’s a great point to distill. Remember that. A lot of times we could be like, hey, just like give me a break. We’re, we’re new to this! But customers are like, I don’t care. I still want my food and I want it fast. Good. And with service, right?

Alonso Castañeda

Yeah, it’s like well, no, you’re not new because I’ve been coming to you for five years.

So, getting an order right is is one of the basics. So we, we as restaurateurs always just have to be brilliant at the basics. If we do that alone, we can get some great success.

Zack Oates

Love that. So what do you feel like, you know, in terms of the brands, what are some things that you feel like have been successful to work in futureproofing your business? Just because a lot of the people, I mean, take Via 313 – a great brand. Butthey can’t necessarily afford an Alonso full time, right. But it’s great that when they, you know, partner, and when you guys invest –

Alonso Castañeda

They can afford like five!

Zack Oates

So, what is some strategy that you give to help futureproof these brands that maybe don’t have the capacity to hire someone to run up strategy for them?

Alonso Castañeda

Yeah, you know, I appreciate that question so much, because you you hear all these conversations about what can brands do? What can brands do? What do you guys do? The one thing that any restaurateur can do is set up systems in their store. And, you know, it can be any combination of different systems, as long as you have a way to digitize your customer and identify them, then you’re going to be able to always target them always, you know, send them another offer, always bring them back. And vice versa, they’re going to be able to let you know if they’re upset or if something’s wrong, but you have to live with them digitally. So if you want to futureproof, your brand, in my opinion, right now do anything you can to have systems in place to digitize as many customers as possible. Do we want them to come into the store still? Of course, 100%. But you know, I’ll go to my favorite restaurant three times, and I’ll order online two times. So digitize them as much as you can, so that you can continue having that conversation both ways. Have a way for them to contact you too.

Zack Oates

Yeah, ’cause it’s so important to keep that dialogue open, right? I mean, Danny Meyer always talks about how hospitality is a dialogue. And it’s hard to have a dialogue when you know, they, they’re not there to talk to you. Right? And so I think that having that digital footprint set up, what are the framework that you use to look at and evaluate technology to set up that that digital, that digital touch with the customers?

Alonso Castañeda

You know, so you need to go about it several different ways, different customers, different demographics, reach out to you in in different channels, right. So you have to have a decent online ordering system so that customers can obviously place orders with you online, and that system should capture name, email, phone number, the basics. That system should also have somewhere on there that they can check mark and say, “want to receive future specials from us.” Even if you’re not doing it right now, and you’re not planning to do it for the next two years, have that so you start creating your database, you’re building that digital footprint, right.

And I’m not saying it because I’m talking to you, But you know, the back and forth conversation, tools like Ovation where you have that digital table touch that the customers leaves your store, and they’re frustrated, but they can use a text message, scan a receipt, and get a hold of the store and let them know about their experience. So long as they can let their frustration out some way in that moment, tt’s already a win. It’s already right.

And then loyalty. I don’t know if I want to say it’s coming back. But loyalty is growing again. And there’s there’s several loyalty programs. There’s a few online ordering systems that are becoming omni channel with online ordering, and even marketing, where it’s a full circle, right? And you understand the customer behavior based on their purchases. You can retarget them a very different way to different cohorts. If you have all of that, you can then start having those customers visit more frequently or increase their average check or send an offer so that they can give that to a friend and then build more customers.

Zack Oates

I love that. Now in terms of different things that you’ve seen, is there anything that you’ve seen like, hey, “This has worked really well across multiple brands?” Any like, strategies that that you’ve implemented that you should say, “Hey, other restaurants, you should try this.”

Alonso Castañeda

So, one thing that I see is restaurants promoting third party on their website, even though they have their own online ordering system. And you know, I get it. When COVID hit, and we were in the thick of it, it was survival mode, man. And it was like, throw everything at it, put it up. But look at how you’re taking revenue on your website. And if you’re still on one of the third party platforms, keep it over there. Limit that menu a little bit so that some of the items are only on your website. And then if you do have links on your page for this third party, take it off.

Now some of those third party partners, they do have a great tool where you can offer delivery through them. They give you a flat fee, and you can transfer that fee over to the customer, or, or some of it, and now you’re not paying a percentage, but you’re still offering that that delivery service. Yes, that’s something that I feel is, is giving them brownie points to those third party partners, because it’s a way for you to still use your own channels, and just use their drivers. They get the tip, but you don’t pay a commission, you only pay them the flat fee that you can just give to the customer.

Zack Oates

Love that.

Alonso Castañeda

To tie to that, you add you have to use social media to convert customers to your own online ordering systems. It’s still not that expensive to do some paid marketing on social media. Facebook, Instagram, spend a little bit of money on there, boost some ads that drive customers to your website, and have them order through your website and convert some of those over to your channels. So you avoid paying those fees.

Zack Oates

Love that Alonso. So here are my key takeaways.

Number one, I love that you said customer expectations has not changed. And I think that golden line there is “Be brilliant at the basics.” I think that that is just one of those timeless pieces of advice is that it often times is easy to forget amidst all the things that we’re trying to do as restaurants.

Number two, futureproof your brand by setting up systems in order to digitize your customers and retarget them.

Number three, always collect contact information and permission, even if you’re not using it right now. Make sure that you’re building that database and you can use it in the future.

Number four, please, we talk about this all the time. And as many times as we talk about it, it still pains me when I see the “Order Doordash” on a website or in the store. Like, don’t drive people, don’t spend all that hard work to get people to your door, to get people to your site, and then pay 30% to someone else because all the hard work that you’ve done. They’re your customers, own them.

And then lastly, I like that tactic you know, use Facebook and Instagram to drive revenue, put some money into it. See how it goes. Love that! Well, Alonso, how do people find you/follow you online?

Alonso Castañeda

I’m on LinkedIn! Hit me up on LinkedIn. Alonzo Castañeda, Savory Restaurant Fund. Either one of those pages, you can find me.

Zack Oates

Awesome. Well, Alonzo for helping distill some of the strategy you’ve used to navigate the murky waters of 2020 very successfully, today’s Ovation goes to you! Thanks for joining us today.

Alonso Castañeda

Thank you. Happy to be here.

Zack Oates

(Outro) Glad you were with us today. And thank you! Thank you to the risk takers, the troublemakers, the crazies who are keeping this world clothed and fed. You’re the ones who deserve an Ovation. Again, this podcast was sponsored by Ovation! To see how we can help you grow your business, go to Ovationup.com. Don’t forget to subscribe, and as always, remember to give someone in your life an Ovation today!