Since joining Enterprise Inns in January 2016, Steven de Polo is heavily involved in delivering a five year strategy to transform the company and develop its managed pub offering. We talk to him about why customer experience is of growing importance, both to Enterprise Inns and to the wider leisure sector…
Q: As retail concept director for Enterprise Inns, what is the primary purpose of your role?
I have three areas of responsibility across the group - retail marketing, food innovation and development, and consumer insights and segmentation - which effectively encompasses concept development for the group.
My role is multi-faceted really. It is helping to design the retail solutions for our managed business; supporting landlords with best practice in our leased and tenanted pubs; and developing solutions that can work across both of those areas, be that menus, drinks partnerships or digital propositions.
Q: How important is the customer experience to the business success of Enterprise Inns, and how is this developing?
It is critically important. There is a huge amount of competition within the pub sector - costs are increasing and consumer spending is tight.
Delivering great experiences in a market that is entirely discretionary means the customer experience is absolutely critical. And ensuring consistently good experiences is probably the biggest challenge that the pub and restaurant industry faces.
Today’s consumers are very promiscuous. If you look at the millennial market, consumers visit an average of 8 to 10 pubs, restaurants and cafes each month. To stand out you have to be good. Businesses need to make sure they a) have a relevant product and b) provide that in a way that delights the consumer.
Q: How is customer behaviour changing when it comes to pubs?
You can stand in the middle of west London and Google ‘pubs near me’ and be inundated with outstanding choices. It means pubs simply can’t rely on their reputation or on word of mouth. They have to deliver a fantastic experience consistently, to regulars and newcomers alike.
Digital has not only exploded customer choice but has raised expectations. The way that people share information socially now, via Instagram and Facebook for example, means they see these idealised experiences in pubs everyday; they expect that to be a reality.
They have greater choice at their fingertips, can quickly research and compare prices, and know what things should cost.
Q: How is Enterprise Inns responding to these changes?
In 2015 the company embarked on a five year strategy to transform the business under its new chief executive.
We have always been a leased and tenanted business, which means we let pub properties to our landlords and sell them beer, but offered very little other retail support. Now we are actively trying to support the development of their retail offers, and aim to have over 800 managed pubs by 2020, across different parts of the marketplace.
We have three main managed offers:
The Craft Union Pub Company, which offers sport and entertainment to customers in the value market.
The Bermondsey Pub Company, which is mainstream and offers good drink and some food in urban environments.
A series of joint ventures with a number of entrepreneurs where we are developing fantastic pubs in more premium destinations and locations.
For the first time in our history, we are having to develop the customer experience ourselves, and we have quite a lot of skin in the game.
As we build these managed businesses we are learning to support our publicans where they need it, and are more than happy to create solutions to aid their success.
Q: Can you share any specific examples of how Enterprise Inns has adapted the customer experience?
Take our food offering. One of the challenges for pubs is that they need a credible food offer, which wasn’t the case maybe 20 years ago.
Consumers can go into any pub and probably get fish and chips or steak and a burger, so standing out can be difficult. Issues such as chef shortages and rising costs compound that difficulty, so to deliver good food in a way that is profitable for the business while offering good value to customers is not easy.
To combat this, we’ve developed simple food offers that can be delivered from behind our bars and are still really high quality. Relationships with companies like Pieminister for example, provides our customers with a really good product at an affordable price. It means we don’t have to invest unduly in chefs or in high labour costs that we couldn’t otherwise recover in sales.
It enables us to deliver a very simple and consistent food offer to our customers. We have done that across pies, pizzas and hot dogs and we are working on other areas of food which allows us to be credible without it dominating our business. It also allows our managers to focus on what matters most, which is training their team and serving their customers.
Q: What do you think are the biggest challenges for pub companies in terms of delivering business growth and improvement through the customer experience?
People... If you talk to any business, they will say that the biggest challenge is finding, keeping and incentivising great people. It is especially challenging in the pub sector.
Attracting outstanding people to deliver your customer experience is one of the most challenging things. The best companies and the best managers know the value of people. They spend time, effort and capital on incentivising and training them.
And as Enterprise Inns increasingly enters the retail space, we recognise the growing importance of investing in people.
Q: What are the key insights in this sector that influence how you think about customer experience?
I think the industry can be guilty of chasing too many different objectives, of trying to please too many people. Creating a great customer experience is about making deliberate choices about which areas to focus on and invest in.
Businesses need to be clear about what they stand for and why. It is about making choices around your customer experience and the areas you want to over invest in, and the areas that you want to just do OK in.
Unless you are in the luxury market and can invest in every area equally, it comes down to priorities.
Q: What are the most effective ways of getting the best customer insight?
Data is becoming increasingly important for all businesses, and understanding customer behaviours and loyalties is crucial. But you have to use that data effectively to add value to customers. It’s not just about having information.
When I look at insight I always ask ‘How are we going to use it to improve the customer’s experience? How will we become better as a business thanks to this information?’
Although we are just starting to tackle this area, part of the work we have done with Brand Vista is around talking to our customers and teams so we understand their views.
We are looking to build our digital platforms and develop our customer loyalty platforms, and will spend a lot more time on that in the next couple of years.
Q: Why was it necessary to bring in external help through Brand Vista?
Enterprise Inns has started to develop a series of managed concepts. In the case of the Bermondsey Pub Company we knew we had a good idea in the ‘Meeting House’ offer, which is the concept that Brand Vista has helped us with. However, we hadn’t really codified what we did, how we would work in future and what would really inform our customer experience.
We engaged Brand Vista to help us to do that. They spent time with our teams and our customers to get to the nub of what it is they love about us and our pubs compared to our competitors.
Now we can start to design a customer experience that meets - and exceeds - customer needs.
We used Brand Vista to not only research but also extract ideas from our heads and theirs. When we first engaged them we were at 15-18 businesses. Now we are at 25-30, so it is still very early on in our offer development, but we felt it was critical to get this right now. It gives us an opportunity to accelerate our development over the next three or four years.
One of the things I love about Enterprise Inns is that it loves using third party specialists to help develop its thinking and push its business to be better. It is refreshing to come into a company that really values external expertise to enrich its core business.
Q: How did Brand Vista work with you and get buy in from the wider business?
They engaged everyone from team members in our pubs to our managers and the central functional team, who do lots of development work on our offers. We made sure that we tested ideas with the teams as we went along, rather than just going for a big unveil at the end.
I worked with some team members early on and after each of the key stages. We also used some of the general managers to build the customer experience over the course of two or three big workshop sessions.
One of the reasons I liked working with Brand Vista was that they were very good at engaging at all levels. It isn’t a top down boardroom driven consultancy, it is absolutely a bottom up customer and team driven piece. This really helps me when I am trying to get buy in from the managers and teams who have to deliver the customer experience over the last three feet. That was really important.
Q: It is early days but what have you learnt so far?
Working with Brand Vista has helped to make us bolder.
One of the things that came out of the research was this drive around independent thinking. Our customers want good, unique experiences - they don’t just want a chain pub experience without soul. They want something that feels original and independent.
As part of that we have started to empower our managers to take more ownership over their social pages and their in-pub communications. It allows their personality to come across.
For example, over the festive season, one pub is displaying a four foot Santa Claus found in a charity shop. That was the manager’s choice. No-one told him to do that centrally - it wasn’t mandated to find something quirky. He did it himself and his customers love it and I love it. That is absolutely what we are all about.
Q: Does that freedom for independent thinking also present a risk?
Yes, and that is the biggest challenge we will face in the next four years as we scale. We need to be really clear on areas where it isn’t the manager’s job to interfere - be that the menu or operating standards - but we also want them and their teams to use their freedom and skills to play with a whole bunch of areas.
It won’t be straightforward, but we are starting to build the right culture and get the right people in place to achieve that.
Q: What is next?
We’ve taken all the outputs from the Brand Vista work, alongside some other business challenges, and are working with the core team to work out how we will cascade that and design a plan that will develop our customer offer further.
We will be implementing that plan over the next few months taking that vision out to the wider team and identifying what we do next. We will then execute the outputs over the next 12 months and beyond.
It is too early to quantify the benefits yet, but the work is already informing how we run the business. It is absolutely starting to have an impact.
Q: What do you think will be some of the key challenges for the leisure sector in the coming years?
There are unprecedented levels of cost increases, both across staff costs and business rates, and these are largely out of the control of leisure businesses.
The second big challenge is to how to make the offering compelling for consumers. With the amount of innovation in the market, and the wave of new and innovative businesses entering the space, you can’t afford to stand still.
It isn’t a case of developing one model and rolling it out over five years - it has to evolve and move forward in response to customer demand.
Q: Finally, where have you seen the biggest impacts on business performance from customer experience during your career?
One key example is when you get the value perception wrong. I think you have always got to challenge yourself on price and what the customer gets for this.
It is such a competitive market and it is easy to want to increase prices to bolster short term profitability, but you have to be really sure that your experience matches up. If you aren’t consistently outstanding you shouldn’t be surprised if customers go somewhere else.
I think businesses generally succeed or fail on the delivered experience over the last three feet. You forget that at your peril.
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