An Industry Leader Gets Real About the Restaurant Industry
Alinea Group Partner Nick Kokonas Candidly Discusses Marketing Tactics, Staff Retention, and More
One thing's for certain about Nick Kokonas: He doesn't mince words.
The successful restaurateur, a partner in Alinea Restaurant Group with award-winning chef Grant Achatz, spoke candidly about the state of the industry during the fourth-annual “Meet The Experts” event in Chicago. Hosted by the Illinois Restaurant Association, Kokonas served as keynote speaker, and during an engaging 16-minute speech, he broke down exactly what was wrong and how it should be fixed.
“We try to look at things differently at Alinea Restaurant Group,” Kokonas says, emphasizing to a sold-out crowd that several unconventional methods have helped the group triple its margins in the past three years. For example, embracing various social media platforms as well as utilizing Tock—Kokonas’ innovative restaurant reservation ticketing system—have helped drive traffic, manage food costs and lower labor costs at his various dining establishments.
While Kokonas and his group are clearly more tech savvy than many of their competitors, he embraces technology out of a necessity as the number of his restaurants continues to grow. In addition to the three-starred Michelin restaurant Alinea, the group is behind Chicago concepts The Aviary/The Office cocktail lounges, Next restaurant and Roister. And outposts for The Aviary/The Office are set to open this summer in the Mandarin Oriental hotel in New York.
Here are some of the best pieces of advice from Kokonas, who's a self-proclaimed outspoken critic about the restaurant industry:
Standard restaurant practice is to compare statistics month-to-month for food cost percentages, labor cost percentages and check averages. Kokonas recommends installing a template to compare stats on a weekly, and when necessary, daily basis. He came to this conclusion as he was collecting data for the Tock ticketing system, which assists restaurants in 12 countries and 43 cities around the world. This was a common issue with many of the clients because when there are no-show reservations or a no-reservation policy, check averages and food and labor costs tend to be all over the place. When restaurants use Tock with customers paying in advance for their dining experiences, then costs are more manageable.
Chefs are great at being creative types, but if they’re not great on the business side of the restaurant, someone must be added to the team who is. Kokonas adds: “Chefs are willing to innovate in the kitchen, they’ll drill service to perfection and spend gobs of money on the front-of-house—and then forget that continuous business innovation, restaurant booking templates, yield management, pricing, modern and efficient marketing focusing on search/social media, and accounting are as critical as the food they put on the plate and the hospitality they provide.”
Many restaurateurs complain about retention. Kokonas says that employees leave because they feel they’re not getting the respect they deserve. At the Alinea restaurants, he adds, “We treat our employees like the professionals they are.” When managers make employees across the board feel like they’re contributing to the restaurant’s success, and there is the promise of promotions, then employees will be loyal, he continues. He believes soon that “tipping will end for restaurants with mid- to high-check averages and that’s a good thing for everyone.”
Kokonas readily admits that he doesn’t believe in publicists. He feels as though he can communicate his brand better than any public relations professional.
He thinks OpenTable’s reservation system is antiquated because it doesn’t offer the flexibility of Tock. He says Tock can be customized to fit a restaurant’s needs, from prix-fixe tastings and special events to communal tables and holidays. It’s also more compatible than OpenTable with popular social media outlets like Facebook, Instagram and Twitter.
On marketing using social media outlets, Kokonas recommends: “If you want to get bang for your buck on marketing and get butts in the seats,” you should be using social media every day. He highly suggests purchasing ads on Facebook, Instagram and/or Twitter to attract wider audiences. For example, he spent $1,000 over 30 days on a Facebook ad for Next restaurant that generated $15,000 sales. (Without the campaign, it would have been $7,000 daily.). The campaign targeted audiences by highlighting the Alinea brand, and included pictures of food and high-profile chefs. Of course, it included a link to purchase tickets to the event. It sold out and there was a waiting list. He also likes them because the reports from these campaigns are easy to read and available on demand. By utilizing social media campaigns as a marketing tool, the restaurant may talk directly to the customer.