BTC Podcast Ep 2: Tammy Billings, Intelligent Data & the Opportunity for Change | Hathway

BTC Podcast Ep 2: Tammy Billings, Intelligent Data & the Opportunity for Change

Published by Kevin Rice, CMO
June 3, 2020

Tammy Billings, Intelligent Data & the Opportunity for Change

In this week’s episode, Tammy Billings joins Jesse and Kevin to share her view on what intelligent data can and can’t tell us about the new retail reality. These three share their perspectives on the importance of using data to make intelligent decisions, as well as how strategy, finances and marketing all play their part in the opportunity for change.

Check it out on your favorite podcast platform or the video below.

About Tammy

Tammy K. Billings, MBA is a former VP of Marketing for several restaurant brands who has spent the last 5 years helping other restaurant executives learn how to use their data to generate sales through analytics. She has a keen understanding of the restaurant industry as well as emerging technologies and software in the space. Tammy has worked with hundreds of restaurant brands in the past 12 years in the industry. She’s a familiar friendly face at industry conferences and her reputation for connecting people is widely known.

 

Video Transcription

Kevin:

Welcome everybody to Beyond the Counter with Kevin and Jesse, as always, we’re here bringing you a behind the scenes look into the food and beverage industry and the brands we all love. Whether you’re an operator, in corporate marketing, IT, this show is all about giving you nuggets of advice, thought-starters to help you make decisions for your organization; or just to feed your brain.

Jesse:

So with this episode of Beyond the Counter, we had an amazing conversation with Tammy Billings. Tammy is a woman that Kevin and I have known for a number of years now back from when she was at Fishbowl and then when she moved on to Marketing Vitals, which is a data company that specializes in the restaurant industry.

Kevin:

You know, Jesse, salespeople kind of get a bad rap, more often than not though, a salesperson can provide a ton of value and that’s what Tammy is all about. She’s worked with literally hundreds of restaurant brands and a good salesperson is a consultant, an educator, a confidant. They bring a good point of view and they come with solutions and that’s why I’m super excited to have Tammy on the show today. Cause she’s just what sales is all about: bringing value.

Jesse:

Yeah, exactly. We actually recorded this a few weeks ago, but as it turns out now that reopening has started to happen some of Tammy’s wisdom is actually quite present and she has made some good calls that have turned out to be true. So without further ado, let’s turn it over to Beyond the Counter!

Kevin:

So Tammy, you’ve been working in the restaurant industry for a long time. For any of the viewers who maybe aren’t as close to it, tell us a little bit about what’s happened in the restaurant industry as a result of coronavirus and COVID-19.

Tammy:

I think what we’re seeing now with restaurants, I mean some of it is obvious, we’re hearing a lot of folks talk about it. I really would break it down into what’s happening now versus what are things going to be like potentially in six months or sort of short term versus longer term. So right now I think you’re seeing a lot of value-oriented meals, right? Meal kits, family meals, etc. Potentially some coupons trying to drive in some of that traffic. We’re seeing cleanliness as a messaging point, as a really high priority communication in general to your guests. So consumers want to know, “what are you doing to your employees?”. You look at some of the PPP money that’s been dulled out by the government and you want to know who got it, what they’re doing with it, how they’re spending it.

I think consumers care about this and we’re seeing it all over the media. I think we’re seeing right now what I would call a “low grade consumer experience” where they’re either stopping at a curbside to pick up or running in, doors are open, signs are up, paper signs. It’s not necessarily the best looking place to be right now. But it’s functional, right? So I think you’re seeing some of those trends. I’m seeing grocery and, thankfully alcohol, being delivered and being put in a to go order. So that’s actually been a nice boost to some, including some of my former clients. And then we’re seeing a lot on the tech side, right? The contactless ordering payment, curbside, , mobile apps, loyalty, etc. So I think in the short term, those are the things I think that are apparent now, but we’ve got a whole sort of laundry list of what I think might happen long term as well. What about you guys? What are you seeing in the short term?

Kevin:

Yeah, it’s really interesting to see that priority of the health and safety messaging. I think it’s always been there as a concern, but it just really hasn’t been top of mind. It was almost just assumed that, we’re in the United States and a certain level of cleanliness is assumed. But in some of our recent research, that is paramount. It’s the number one thing people are concerned about when it relates to ordering from restaurant brands and so that messaging paired with convenience really does have to be front and center. We’ve seen some restaurant brands do a really good job with communication, using multimedia communication and iconography to really clearly spell out that they’re doing a good job to keep their customers and their employees safe.

Jesse:

Yeah, I think on the technology side, we’re seeing that right when the crisis happened, everybody was focused on the kinds of crisis mode changes to their technology platform. So, how quickly can we implement curbside or you mentioned contact those payments. And not many brands are really looking beyond that. There’s kind of a goal to stay afloat, right? And maybe you need to bring in a delivery provider or a marketplace because that’s the only way that you can sell to your customers. But now we’re starting to see brands as things have kind of hit the bottom and are they starting to pick back up? They’re starting to look towards potentially an extended period of modified consumer behaviors but then recovery after that and trying to understand which of the changes are going to be permanent and which will revert back. But a number of brands are now starting to understand that they’re going to need to use technology to compete more than ever moving forward.

Tammy:

I used to always joke that mobile apps were really about coupons and convenience, right? You want your offers and you want your convenience, but I almost feel like there can be sort of procedures and things added to mobile apps, websites that are really about cleanliness or PR or processes too. So I would add coupons, cleanliness or coupons, convenience and cleanliness. The three ‘C’s.

Kevin:

Yeah. And that kind of ties into the whole idea of, contactless payments and mobile ordering and all these different handoff modes that we’re seeing really start to emerge right now, like curbside. And we’re even seeing brands put together makeshift temporary drive-throughs to be able to get customers through in a way that keeps an appropriate amount of social distancing whether it’s perceived or reality. I mean, I’ve been through some drive-throughs, I’m still handing over my credit card. I’m getting handed my food. But I’m trusting that they’re taking the appropriate steps to keep me safe, my family safe with the food that I’m purchasing. But I think that’s going to be kind of a long term change and it’s not even something that wasn’t already coming. We all know off-premise was a trend. It still is a trend. This is just going to accelerate it even further. So off premise and different handoff modes and contactless payments, these are some of the things that were already coming. They’re just going to come a lot faster and they’re going to no longer be optional. They’re going to be requirements.

Tammy:

I think in both of those things really just lead to the natural rise of ghost kitchens. So a group like kitchen United or, I’m trying to think of some of the other ones that are out there right now. They are just sort of starting up and looking for accounts and I imagine they’re probably flooded right now. Because you’ve got these really potentially big restaurant spaces and if you’ve got a 6,000 square foot restaurant space, a sort of large full service restaurant and you’re now being told that you have to operate that essentially at 50% capacity, you still need the same level of economics really to cover your rent and your overhead. So what is that going to look like? And I think that we could potentially see the emergence of a new service model. You really look at the rise of fast casual kind of came out after the recession, right?

So you see the need where fast casual was like elevated quick service or dumbed down full service at a more affordable price. I think we have the potential to see something new emerge. Some of the things that sort of just coming to my brain would be things like, “would you pay more money to dine on a Friday or Saturday night with your spouse?” If you knew there were far less seats and you could, would you pay a premium to get in that seat? Or we can start looking at things like yield pricing. If the restaurant’s super busy, do you start charging a premium with things like digital boards and with the right sort of analytics solutions you can actually start to figure out what people will pay at certain times of day and what they will pay a premium for. So I mean imagine that you ordered your food online and you show up to the restaurant and they seat you and it comes out.

Kevin:

Yeah, I love that idea of like almost a curated dining experience or like a self curated dining experience.

Tammy:

Yeah. Or what if you said, I want 15 minutes to have a conversation and I’m willing to pay you for sitting there during the time. Right. Maybe you want to have a conversation with an employee over lunch, it’s more confidential and you need some extra time. So what if you said “I need 20 minutes on the front and the back of the food order” and could schedule that and potentially pay for it for holding that table.

Jesse:

And I’ll pay extra for the booth.

Tammy:

Yeah, I would pay extra for a booth too!

Kevin:

I did want to mention, given your background and previous role at a Marketing Vitals, which is a leading business intelligence platform, they’re really tailor made for the restaurant industry. How has that informed your thoughts on what brands or restaurant brands need to do? How important is data and business intelligence coming out of what potentially will be a recession here or at least just, what’s happening with coronavirus?

Tammy:

Well, I think it’s going to be super interesting because I’ve spent the last five years really looking at data in our industry and trying to teach people how they could be using it to essentially generate more sales. And I think people understand it, but they’re a little bit afraid of it. We haven’t necessarily been a data driven organization. And when you are using data, you need a couple of years worth of historical data to really inform what might happen in the future, in addition to what other ever other sort of factors you’re taking in. But the old yield data isn’t gonna be any good.

So I feel like for some of these companies that maybe haven’t been collecting data or haven’t really understood how to use it, now is the time to to think about that because you can’t use 2019’s data to predict what’s going to happen to your sales this May, June and July. And usually you’d have two to three years worth of seasonal data and you might know consumer price index is up this much and gas prices are down this much, or this factor does this, and this is what I anticipate my business volume to be. But all of that is out the window.

So I think the important thing right now is that people need to make sure that they’re collecting their data. They need to understand. Do they own their data? How can they access that data? Whether it’s a back office solution or some or their sort of advanced BI tool or somebody customized something to you. I think that’s really important to start collecting it or if you’re not, like you’re not behind the game at this point. I think that the data sets that are going to be really important are things like macro data as well as hyper-local datasets. So, a restaurant in Chicago might fare differently than a restaurant in Dallas if one of those has a recent Corona outbreak.

Politics are playing an influence in people’s decisions potentially to leave their house or dine out. So those kinds of understandings of either an individual on a one to one basis or even on a hyper-localized level, you might say, well, “gas prices are down or up here the spending is up or down here, this is a blue or red area, this person may be a blue or a red person” will say it like that. And those things are going to be really important for understanding their behavior. Like, what is it they’re going to do? What is that consumer confidence? What does that spending pattern look like? And I don’t think that there’s anything out there right now that’s really cut out to do this and make these predictions.

So whether that company is having to make changes to their current software or whether that’s hiring independents, I think the next few months are going to be super interesting from a data perspective because your sales have shifted, right? Now you’re doing 20% more in off-premise and what does that mean? What do you need to do? Is it actually profitable for you? It’s great that your sales are up. Like I talked to someone today from a 15 unit chain here in Southern California and they were really happy that their sales were only down 20%. And I thought that was great, that’s awesome. Tell me more about what you’re doing or where that business is coming from. And they were basically saying that most of it was coming from off premise, like everything’s off premise or whatever and that that was up.

But they didn’t have any understanding of the profitability around that. I’ve been telling people I know to go pick up your food if you can, because the restaurant takes home more money. So right now there’s no traffic, there’s plenty of time. Go pick up the food, right? You’re going to get it faster, hotter, easier. But what does that delivery model look like? So I, I just feel like this is all going to have to change. You have to not only look at like what are the sort of sales analytics, but you have to understand all the factors influencing them and what all those costs are.

Kevin:

That’s something that I’m a little worried about too, that we’ve kind of started to see, which is like a price war coming out of this; pretty much everybody jumped on the free delivery bandwagon. And not only are they having to subsidize the cost of delivery, but they have fees that they have to pay, and if this carries through, then we’re going to have a lot of restaurant brands in a race to the bottom.

Tammy:

Yeah. And grad school 101, can’t compete on price! Everybody can always beat ya right! It’s like who can get to zero fastest. So yeah they’ve got to compete on other things. And I think that comes down to. Somebody I worked for one said “all the marketing should be on the plate”. So what’s the food? What’s the product? What are you going there for? What’s the experience? I think that there’s really, this is such a great time for the industry to be able to shift in so many ways. And I think becoming a more data centric business is probably no time like the present.

Jesse:

So Tammy, what do you think are the most important things that restaurants should be working on right now as they put together their recovery plans or turnaround plans?

Tammy:

I think we go back to sort of core business, right? So what is your strategy? How is your model potentially going to change or need to change? For example, like does a buffet concept turn into more of a groceraunt, they’re usually really large concepts. We’re hearing that a lot of people aren’t going to be interested in going back to a buffet anytime soon, but they’ve got the sort of infrastructure they could easily be setting up like a salad to go. And sort of having some of that more grab and go stuff; so does something like that happen? We’re operating at a lower capacity, what does that mean for fine dining vs full service? If you go to a fine dining restaurant, are you gonna want somebody serving you in a mask? Do we need to build cubicles now around tables for people to feel like it’s safer, clean?

So anybody that’s got like, 6,000 square foot of space in their restaurant is going to need to figure out how to use that space or how to divide it up and, and get rid of it because it’s just a cash burn. So I think that the strategy piece has got to really come first and some of that is going to be data-driven, a little bit of gut instinct and trial and error to be honest. I think from an operations perspective, a lot of restaurant companies might’ve been able to sort of trim the fat right now and really start understanding like, what is the job that they need? And now you’ve got a labor pool of the best talent in the country and everyone’s looking for jobs so you can really pick and choose and build the right teams and figure out what is it that you need.

Do you need more bussers? Do you need a host that can take orders? Do you need just runners? Do you need drivers? So I think those things are going to be really important. And then just the general redesign from an operations perspective; financials, understanding, like truly understanding your business. You would be shocked at how many people we talked to that don’t even know their food costs. I’m not joking, really hard to understand profitability when you don’t know your food costs, really hard to understand profitability when you’re getting zinged with different software services or different percentage fees here and there, those things all start adding up. So, delivery is great, it’s great that we have that opportunity, but if it’s not a profitable part of your business, maybe you should be there shouldn’t be in business or we should be changing it.

So I think strategy, operations, financials and then probably our favorite thing is marketing. Right? And that messaging, what is the message to the consumer? What is the message that’s going to resonate with them over the next few months? I think social media is going to be really important. I think people are really tuned into what their friends and families and other folks are doing and sort of wanting to know what does this restaurant offer, how are they doing something different. So I actually think social media is probably going to become even more important. And from a brand perspective, it’s an asset you own. So it’s a cheap asset to tap into.

And I think staffing, marketing people, I mean I remember distinctly after the recession that marketing was really reviewed as, or sort of treated as, an expense as opposed to a sales generating opportunity. And so marketing really takes a back seat in our industry, but I think that, this becomes a chance to really potentially change that as well because you’ve got things like packaging, you’ve got all that customer experience stuff that’s going to have to be redesigned and that’s not usually coming from your operations team. Like usually that stuff is truly coming out of marketing or sort of design. So now I think if I were looking at my turnaround plan, it would be strategy, operations, then the financials. And then the marketing.

Jesse:

So speaking of marketing, I was speaking with a restaurant marketer the other day about how we’ve got this revival or, huge growth in delivery and curbside and how to optimize operations and online ordering to facilitate that. And this marketer actually brought up an interesting point that a big concern that one of the number one ways they differentiate is the in-store experience and that they, prefer to have customers who purchased sometimes in store, maybe lunches in store. It’s a fast casual concept, and sometimes they get delivery. Maybe that’s more in the evenings or the weekends, but a very big concern about losing that ability to differentiate. If they’re just like any other provider and they’re losing that opportunity for the sights and sounds and smells and getting inspired by what other people are eating or how they’re building their meal. What are your thoughts about how you could maybe steer into the wind there and maybe entice people back into restaurants. Or maybe you just need to figure out different ways of branding, within the packaging or the food itself.

Tammy:

Yeah, I think, I think it all just has to be stepped up, right? I mean, they may not be able to go in, or at least if they’re going to have to walk in to sort of say, let’s say you’ve made an order and you’re going to do a pickup and, and this brand has really sort of prided themselves on their in store experience and now that’s gone. It doesn’t really have to be gone! Is the door opened for them when they walk in? Is there a path on the floor that’s laid out with nice graphics that says, this is how you place the order now? Is there, say after they sort of take the order, “Hey, if you’d like to use our very clean restroom, it’s right over here.” I think there’s a ton of ways that you can take what you have and make it better. I think we’re going to see some really cool creative stuff come out of this need.

Jesse:

Absolutely. Yeah. I think you were mentioning earlier the variable pricing, but, theoretically you should extend the cheapest prices where it’s got the best advantage for you. So maybe it’s cheapest to order and eat in, maybe it’s slightly more expensive to do curbside or pickup, and maybe it’s a little bit more expensive to do delivery and then ultimately it’s a question of actually paying for that convenience of when you need it and maybe, all things equal, going and driving in and picking it up or actually going in and sitting down and enjoying a meal.

Tammy:

Well, and I think too, I mean, we’re in this time right now and it’s sort of fresh on our minds and we’re probably going to be here for, let’s call it the next 18 months to two years. But beyond that, like what is going to last, right? You don’t want to totally destroy your brand if maybe you can’t get out of that lease and your store is what it is. So I think if people can find secondary uses for some of their space, that also helps to create an ambiance. So if you I’m trying to think if you’re like a burger concept but you offer salads. Maybe you could do like some a grocery section or some condiments; like if you’re doing great sauces, hot sauces or mayonnaise, you can sell those to customers to take that and use it. You can sort of set up like a retail component to your store, something that gives them visual, something that takes up space and other opportunity to generate revenue. That’s how people have to be thinking about the sort of “new normal”.

Kevin:

I personally love the grab-n-go concept, right? For me, convenience, quality. But customization isn’t super high on my priority list and, sample population of one here, but being able to like walk into a Chipotle, grab a pre-made salad, pay for it on my phone and walk out, that’s a total win for me.

Tammy:

That’s actually a great idea. So imagine that Chipotle did, maybe they’re smaller sized burritos and they’re fixed, right? So it’s beans, meat, rice, and then you got a couple things of toppings that you can either buy or pick up, grab-n-go and you’re out the door.

Jesse:

Right. And actually, restaurants are then transcending the boundary, they’re not just grocers, but they’re CPG companies and a lot of them already are, they do have separate CPG lines. But, maybe it’s that restaurants, if they have the grab and go, it’s their branded condiments or bottles of water or whatever. Beyond just kind of the nice to have tee shirts and hats, but things that customers actually might need and could use beyond just that particular meal.

Tammy:

Well, I think we’ve seen this rise of the C-store, the convenience store, over the last couple of years as a potential competitor to the industry as they’re making more fresh foods. And if you think about the convenience store model and you’ve gone into some of these like new Wawas and especially internationally, all these convenience stores are beautiful, great display cases, great sort of live experiences. And I almost feel like the restaurant world could now take a play out of their book; how we make that so that it’s more mobile, how do they make it more appealing to Kevin’s point, like yeah, maybe there is that grab and go, there’s less customization and I just want to get outta here.

But then there’s this whole other opportunity. So I just think that it’s, it’s a time of change and I think people should embrace it because you can’t really fight it. So try something new, figure out if it works for you. Use it as an opportunity for press coverage. I mean the media is begging for this kind of story. So if someone did something really interesting and cool, I think it would be everywhere.

Jesse:

So there’s been some discussion that anywhere from 30 to 40% of restaurants will just never reopen. Or maybe they’ll try to reopen too soon and then go out of business permanently. There’s also been some discussion that the ones that will go out of business are more likely to be the mom-and-pops who aren’t backed by a large chain and, and potentially were saying that there could be a massive increase in chains versus mom-and-pops. Do you think there’s any, any truth to that theory and how do you think that’s actually going to change how consumers view chains or how the restaurant industry works?

Tammy:

I think that some of that is going to be regionalized. I’ll give you an example. So I live in Los Angeles and I have a hard time finding chains, right? There’s just, there’s not a lot of chains in my neighborhood. But if I go out to Riverside where my family lives, theres much more chains, so to some degree that’s going to be a little bit regionalized. I think some of your bigger metros, I mean New York is known for having mostly independent restaurants, right? Also not an area that’s like heavily hit by chains. We start getting into like Iowa, Nebraska, probably a different story. So I think some of that is just going to be regionally dependent. And I think some of these chains have been acquired by PE firms and not every PE firm operates equally and some of them are saddled with debt and can’t really operate properly.

The industry is saturated, there’s so many restaurants right now when we start looking at things like sales volumes and you can see like, okay, well sales aren’t really going up, but it’s like, but how many more restaurants do we have this year than last year? And so I think some of that is like, I feel like it’s just going to kind of correct itself and I think that America is built on entrepreneurism and as soon as these mom and pop restaurants close, I do believe another one will pop up. I think from a sort of political poly-sci sort of perspective, I think that we’re going to see small business loans really be made easily available in the next few years because we’ve got to get some of those businesses back in action.

Jesse:

Well, Tammy, thank you very much for joining us today and Kevin, thanks for setting up the conversation. This has been fun and informative and really looking forward to seeing where you go in the future and I’m sure our paths will cross again.

Kevin:

Thank you Tammy. We appreciate you jumping in here and sharing some of your thoughts and experience and insights. We will look forward to seeing you again in the restaurant industry circuit when we all emerge from quarantine.

Tammy:

Absolutely. I’m happy to help. Happy to participate and I can join again. Let me know.

Jesse:

Hey, that was a great conversation with Tammy. You know, one of the things that really struck me and I just can’t stop thinking about is all of the changes to the dine-in model and how technology can be used to accentuate that experience, make things more efficient, while making them safer at the same time. So definitely, you know, excited to see what casual dining and other restaurant concepts will do over the next few weeks and months.

Kevin:

Yeah, totally. I liked how she put it as the three C’s: CouponsCleanliness and Convenience. I think those are definitely the things that are going to win in the new retail reality, not going to say new normal, cause I think people are pretty fatigued with that, but definitely the new restaurant reality that we’re going to be in here. I think, you know, we talked about this, but you know, COVID-19, or coronavirus didn’t necessarily act as a change agent for the restaurant industry because everything that’s happened was kind of already down the path of happening. It really just acted as an accelerator, things that were going to happen over the next three to five years, that just happened in a few months. So it’s just accelerated everything that we knew was already going to happen.

Jesse:

Absolutely. Yeah. I think, you know, one of the things we haven’t quite seen happening yet but a very, very exciting opportunity would just be yield pricing. So many industries do it and I could see this finally being a time for restaurants to have variable pricing based on time of day, how busy they are, inventory levels and customer needs and loyalty journeys and everything, a lot of the technologies already in place to do that. I think we could see that making dining more accessible, but also more profitable for restaurants as they recover.

Kevin:

For those listeners not familiar with variable pricing thing. Jesse, maybe you can give an example of how that would work for a restaurant.

Jesse:

Yeah. I mean, also called yield management, but the idea is that there’s a supply and demand curve and there’s people who are willing to buy things at different prices. Some people are willing to pay more. Some people are willing to pay less. And then from a brand’s perspective, they are willing to sell inventory or space at varying levels of price or margin based on how busy they are. And so effectively there are various places where those curves could meet and value could be gained by the buyer and by the seller. And we see that in hotels, we see that in the travel industry. A lot of industries have variable pricing or even negotiated pricing, restaurants just happen to be, other than regional differences. And some things like, you know, happy hours, which is a good example of yield management, incentivizing customers to come in at a certain time of day, when ordinarily the restaurant wouldn’t be busy. But I think it’s an interesting thing that with technology you really could do.

Kevin:

Well, you heard it here. First yield management and variable pricing coming to the restaurant industry. That’s it for our episode today. If you liked our show, please, don’t forget to subscribe. Tell your friends and tune in for the next episode of Beyond the Counter!