How did your chosen catering partner navigate their way through the COVID crisis?
For too many Australian venues, the answer to that question proved make-or-break in 2020.
If you’re one of the venue managers whose own business suffered as a result, now is an ideal time to take action and implement more effective strategies to help take control of 2021.
An analysis of your current catering agreement is a smart place to start.
By understanding what has been working well and what hasn’t, venues can implement individually-tailored strategies that help create measurably better results.
If your own individual list of cons outweighs any genuine pros, it’s not too late to turn things around and continue this new calendar year in a way that is both profitable and sustainable.
Ideally, last year should have highlighted the strength in partnership arrangements between caterers and venues but if COVID had the opposite effect and made you painfully aware of the weaknesses and flaws in your partnerships, learning from the experience and committing to do things differently is a way to move forward – and prosper.
Asking yourself what your clients expects from the experience at your venue is a fantastic entry point.
Is customer service most important to you?
Or is it product or profit?
When you have a thorough understanding of your caterer’s requirements and feel confident that these needs are fair and comprehensively communicated, you are taking important steps towards genuine improvements that will help your venue do better business.
If it is time to change, the good news is that there are several possibilities to explore, in order to find the most powerful – and profitable – solutions.
With a diverse range of operational models currently running in the marketplace, deciding which one is best suited to your business can be the difference between failure and sustainable success.
Which one of these catering models will help your unique business thrive?
- Fully outsourced – licensed, leased or as a partnership model
- Fully in-sourced – with adherence to the governance considerations for this model
- Hybrid – part in-source, part outsource
- Management fee contract
- Joint venture with a catering partner
- Catering panel – select caterers to business requirements
Weighing up the potential impact each different model might have on your current operating procedures will help inform your strategic choice.
Next, by asking more questions about the best way forward, you can be assured that the steps you are taking to make change will be both productive and powerful.
- How appealing would your contract be to prospective caterers?
- How would you take this to market?
- How would the engagement of suitably-qualified consultants help you navigate your way through a thorough process help reduce your stress?
By being transparent and accurate about the financial returns you need to survive, making the choice between upfront funding or a true building of a partnership and service delivery can make a huge difference to your clients and the way you work wjth them.
As hospitality consultants, we often see venues tempted by the ‘carrot dangle’ of upfront loading from caterers – but it’s critical to comprehend that this financial offer can attribute to the relationship turning sour when venues feel ‘forced’ into staying in a catering contract that may not be serving their venue’s needs well.
Term of your venue catering contract
- 3 years
- 5 years
- 7 years
Consideration of the caterer’s obligations are an important ingredient in the analysis of any tenure’s duration.
For proven success, you want your caterer to invest in its key staff in a way that enables their delivery of a seamless experience to all clients – and you want them to set up the strategy for continuing success.
It’s an approach that requires time and money – especially in the first year of a contract.
Who should manage sales and marketing – venue or caterer?
Both options have their positives and negatives and the only sensible way to decide is to have a thorough understanding of the specific needs of the individual venue.
Some of the benefits of venue managing their own sales are:
- Total visibility over sales, including forecasting
- Security for your database, ensuring that leads and sales go straight to your venue (s), rather than to another venue in your caterer’s portfolio
- Event calendar management – greater visibility of your calendar and sales pipeline means you can initiate sales strategies accordingly
- This model limits your venues’ risk of caterer not selling effectively (in particular, in the lead-up to a contract concluding)
- Better control over event P&Ls
The benefits of caterer managing your venue’s event sales are:
- Leverage from your caterer’s existing database of event buyers and marketing channels
- Foodie focus – benefit from your caterer’s food and beverage related content
- Utilise your caterer’s skilled sales force. A caterer’s sales team specialises in selling food and event experiences (whereas your venue’s core business / primary focus may not be hospitality or events)
- Leverage from your caterer’s industry knowledge
Although we can’t change the way venues managed their catering partnerships in 2020, there are many things that can be done to create a stronger 2021. With the right information at your fingertips and the support you need to guide you through the necessary changes, your business can survive- and thrive.