The simple fix for declining guest traffic

Disclaimer: I have previously had a client relationship with The Cheesecake Factory’s parent company when I worked as part of a team that helped them raise equity capital (at the time, they had different upper-level management).

If you have ever been to the Cheesecake Factory, you will likely agree with me that it is a generally well-run restaurant concept. They have tasty food in huge portions that delivers a good value (I call it the “two-meal deal”…you easily get at least two meals out of whatever you order). From working with the chain previously, I know that it is a very difficult concept to execute, as they have a menu almost as big as a telephone book and their employees do an overall good job in that execution.

My issue with the Cheesecake Factory concept has always been that they do not take any form of reservations- no actual reservations, no-call ahead seating, no way to get yourself into the queue of tastiness without actually showing up in person.

When the Cheesecake Factory concept was newer and times were different, this was a selling-point for the business. The often one-to-two-hour waits at what seemed like all times said to the consumer, “Wow, look how many people want to eat there. I want in!” and people waited (and waited and waited) to be able to partake in a Cheesecake Factory feeding frenzy.

But now the concept is not so new. In major markets with TCF restaurants, customers have been to the Cheesecake Factory many times. The novelty has worn off and now the economy sucks and tides have turned. The long waits that once made you feel like you were joining the in-crowd now make you feel like you aren’t an important customer- just a random idiot waiting hours for the privilege of spending your money on a meal.

TCF reported that at their Cheesecake Factory brand restaurants, same store sales (the sales on average in each mature restaurant year-over-year) were down close to 7% for 2008 (4.5% actual with estimated 2% increase in menu pricing). They said this was from less guest traffic. They blamed it on the economy, but I can tell you that their reservation policy is not helping that traffic number. Nobody, especially in this economy, wants to wait two hours for food. Or I should say that there is a strong preference for waiting from the comfort of your own home after you call up to put your name on a waitlist, instead of waiting like a schmuck in the crowded restaurant entrance area with a bunch of people who look like they have never missed a meal in their lifetime.

I firmly believe that customer service and the customer experience will be the key differentiator in and driver for businesses for at least the next decade. TCF can enhance that experience significantly with the small change of adding some means of pre-reserving a table. They don’t have to go to full-reservation mode, but a call-ahead list would go a long way towards increasing traffic. I know a lot of people who don’t eat at the Cheesecake Factory very often because they assume there will be a significant wait (whether or not there is one). I personally would increase my visits by a factor of 8-10x if I could put my name on a list in advance.

So TCF, why not test out a call-ahead plan? You should find that your traffic increases as you acknowledge to your customers that their time is valuable.