Exclusive Q&A: 'Bar Rescue' host Jon Taffer on customer experience
Hospitality retailers in Las Vegas and everywhere else need to deliver maximum customer value.
Chain Store Age recently had the opportunity to speak with retail hospitality re expert Jon Taffer, best known as executive producer and host of the Paramount Network TV show "Bar Rescue," about how retailers across the country can learn from customer experience difficulties facing the Las Vegas hospitality industry.
Taffer is also chairman of Taffer Media, founder of the Taffer’s Tavern casual dining chain and creator of the Taffer’s Browned Butter Bourbon liquor brand.
What customer experience issues are Las Vegas hospitality retailers facing?
They need to protect and connect with the consumer. This requires two things: absolute value and perceived value. Absolute value is simple - if you're selling a room for $100 and I'm selling a room for $90 I have you beat on absolute value.
Perceived value encompasses the experiential and physical elements, and sometimes the intangible elements, that happen within an experience that add to the point of value. Let’s say you went to a top-of-the-line steakhouse. When you were leaving, you wouldn't say it was expensive. You'd say it was great, because the perceived value justified the absolute value.
The problem that Las Vegas is experiencing is that hospitality retailers beat up the consumer on both absolute and perceived value. There are stories of things like a $20-plus bottle of water, $26 cocktails, room rates, resort rates, resort fees, and taxes and parking fees.
Meanwhile, the perceived value element has been lost in Las Vegas. They're losing table games for automated blackjack dealers and front desk people for kiosks. The customer experience in Vegas is becoming institutional so when you check into a hotel, you electronically check in or stand in line for an hour.
The perceived value is eroding before customers even get to the elevator. Las Vegas is challenging the consumer on both fronts, and something has to change, or destinations like Miami and international markets are going to become much more appealing on an absolute and perceived value basis.
How can technology help overcome these issues?
In my Taffer’s Tavern restaurant chain, we use technology profusely in the back of the house and for back-office systems and activities like marketing and social media. But I've always been very hesitant to put technology between me and the customer.
When I look at a digital persona that functions and acts like a human being, my feeling is the customer is not quite ready for it. But I'd like to add a caveat. Never in a million years did I think that I would be ordering the items online that I order today.
Things change, and I think the technology will grow. But it needs to be built over time, and the technology has to be leveraged in ways that benefit the business and the consumer and don’t alienate the consumer.
What lessons can other retailers in other parts of the country learn from the issues Las Vegas is facing?
I drive by malls that are abandoned and bankrupt. We all see them. And then I drive by malls that are packed. What’s the difference between the malls that closed and the malls that are flourishing?
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When I look at retail stores today, I think to myself, 'If I can buy it online, why should I go to the store?' And from the retailer standpoint, if you don't come to the store, how do I upsell you? How do I show you things in the back?
Years ago, I was working for a national lingerie retailer as a consultant, and we were hired to assess their operations and define their barriers to sales. Customers would walk into the front of the store, and the salesperson would say, 'Hi, can I help you?' And the customer every time said, 'No, thank you. I'm just looking.'
We had them put two racks in the back of the store. We trained the salespeople to walk up to the consumer and ask if they had been there before. If the customer said it was their first time, the associate would say they store had a sales rack in the back just for first-time customers and get the shopper back, touching clothes.
If the customer said they shopped there all the time, the associate would say there was a sales rack in the back for regular customers and get them in back. Sales went up 24% overnight with simple changes in language and connectivity.
Retailers need to remember that they need to provide environments and connectivity that causes people to want to interact with them, and the more they interact, the more transactions they have,
What is the most important piece of advice you would offer a hospitality retailer?
Years ago, I was in Detroit doing my 120th episode of 'Bar Rescue' and I asked the woman who owned the business, 'Why are you failing?'
The woman answered she was failing because of the Euro in Greece. And she said that to me in Detroit. When she told me that, I couldn't believe that she bought into that excuse and I realized that at every bar we featured failing miserably on 'Bar Rescue,; never once did the owner ever say, 'I think I'm failing because of me, I'm not sure I'm making the right decisions.' Not one single time.
Excuses are the most paralyzing influence upon any business growth or activity. If you wake up in the morning and you are failing and blame your failure on the weather or Congress or whatever, you have no reason to change.
But if you wake up in the morning and looked in the mirror and say, ‘I'm failing because of me,’ that's when change happens. Excuses paralyze all growth. They paralyze all risk. To me, the common denominator of almost all failure is excuses.
