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Golden Service Entrepreneur Steve Day:

Shutting Out the Competition with Value


In an industry where personal warmth is key, restaurant group Wowprime focuses on keeping employees content, and dishing out value that rivals find hard to match.



Shutting Out the Competition with Value

By Yue-lin Ma
From CommonWealth Magazine (vol. 477 )

Shouldering a daypack and clad in a white Polo shirt and a pair of black jeans, Wowprime Group chairman Steve Day saunters into the Guangfu South Road outlet of the group's Wang Steak chain in central Taipei.

Sporting a contagious smile, Day (rhymes with "sky") gives a friendly nod of the head left and right, sometimes stopping at a table to exchange courtesies with guests, asking them whether they are satisfied with their meals or why they picked his restaurant today. Before even taking a breather after putting down his backpack, Day rushes to say hello to his kitchen team and service staff.

In Taiwan you can hardly escape dining at a Wowprime Group restaurant, even if you are not a steak eater. Set to go public next year, the Wowprime Group boasts annual revenues of NT$7 billion and has ten chain restaurant brands under its banner. The different chains cater to different tastes and budgets, serving Western-style steak, Japanese charcoal grill, hot pot, fried pork chops, teppanyaki, or creative vegetarian cuisine. The Wowprime Group has established beachheads in nearly every market segment targeting different customer groups, ranging from families to young people to sophisticated urbanites.

In a single month some 1.2 million people in Taiwan spend money at a Wowprime Group restaurant. In other words one out of 20 people on the island eat at one of the group's many eateries once a month.

Day's restaurant empire serves up almost any fare except traditional Chinese cuisine, raising competitors' market entry hurdles to almost insurmountable heights.

Why No Special Offers?

Taste is the first step to success in the restaurant business, but ingredients are the key.

Day demands a lot of his chefs both in terms of food preparation and food presentation. They are supposed to make guests squeal with delight, "Wow, this dish looks so beautiful" and "This is so delicious, it's a shame I have to swallow it." On top of that the customers should feel they've gotten more than they paid for. Any new item on the menu is first sampled by 200 test eaters, who then have to fill out a questionnaire that also asks for the perceived value of the tested meal. The price is then set at 70 percent of what the survey results suggest. "You want to know why we don't give any discounts? It's because our prices are already as low as they can get, so competitors won't get in," Day explains.

The restaurant giant is able to bring down prices because it can rely on huge economies of scale. Fresh produce and other ingredients usually account for 30 percent of restaurant costs. But since the Wowprime Group centrally procures foodstuff in large quantities for use at all its restaurants, it can negotiate lower prices and cut costs. There are also cost-saving synergies. For example, the body of a fish may go to Wang Steak, while its head, instead of being discarded, is used to make fish head hot pot at the group's "Gi" Hokkaido Konbu Hot Pot chain. As Taiwan's second largest importer of beef, the Wowprime Group has also much more clout in negotiating prices than other restaurant chains.

Learning from Customer Feedback

When an individual restaurant becomes a chain, the biggest concern for the owner is that the customer experience is not the same at all outlets.

In the service industry many procedures depend on individual judgment, so imparting a specific experience becomes difficult. But the Wowprime Group devotes a lot of effort to recording in detail all standard operating procedures and implementing them when training every single employee.

But the group's best quality control personnel are its customers. Every month some 840,000 customer questionnaires, enough to fill a pick-up truck, are collected from the group's restaurants. At company headquarters three office workers are in charge of processing the questionnaires. They key in the data, collate the results and distribute them to all group brands for further reference, comparison and improvement.

A Human Business

After all, the service industry is not a production line. What counts is the warmth of person-to-person interaction. Day is convinced that even more important than standardizing and systemizing procedures or brand expansion is the company's underlying corporate culture: First, make sure you have satisfied employees; only then will you have satisfied customers.

"If you scold an employee, he will be unhappy and may add a little more salt to the guest's meal to get back at you," notes Day in a display of his trademark humor. "This is a human business."

The Wowprime Group has made efforts to build a company that feels like a big family. There are material incentives such as bonuses, which even students working part-time enjoy. And then there are gestures that make employees feel appreciated and trusted like a member of the family. In a demonstration of absolute trust in its employees, the company refrains from setting up surveillance cameras or dispatching mystery diners. And the group's inhouse "electronic secretary system" alerts the whole company whenever an employee or family member has a wedding, a funeral, an accident or a cause for celebration, immediately sending out congratulations or dispatching assistance, as appropriate.

Wang Steak already has 41 steakhouses in China, while the first Taoban Japanese restaurant is about to open in Thailand. The group is on its way to realizing its goals of raking in NT$10 billion in annual revenues and becoming a top-tier enterprise in both Taiwan and China.

"I don't think our threshold is very high at the moment," says Day shaking his head. There is a sense of crisis at the Wowprime Group as more and more large conglomerates toy with the idea of entering the hospitality industry. "We definitely need to do more, so others won't catch up to us in one step."

Translated from the Chinese by Susanne Ganz