#2 - Tip for Tipping

In a recent trip to South Beach, we found that most hotel restaurants and pool/beach bars automatically charged gratuity (18%-20%) on your bill.  This practice was limited to the tourist areas only.  Nonetheless, our service experience was very good to excellent everywhere.  In a highly competitive market like Miami, the key to success is delivering on all three pillars  (service, food and atmosphere) everyday.  

At that moment when customers are tipping, the overall service experience is what they're basing it on while food and atmosphere are secondary.  Someone who gives 20% versus 15% isn't necessarily feeling that they've received 33% better service, or that 18% is indication of "almost" excellent. Conversely, someone may love the food and service but felt that the noise-level was too high, and hence, leave 15%.  To some degree, it is subjective and arbitrary. 

However the real metric to focus on is Word-of-Mouth (WOM), which is an invaluable tip.  Operators should program on the credit card machines an additional option to WOM, that is, the ability for customers to broadcast a rating (at the table) directly to Facebook or Twitter.  For the operator, this is an effective way to capture, measure and own critical information.  Receiving 15% and World-Class is a better indicator than just receiving 20%.  Analyzing both metrics provides a pathway to better serve your customers and quickly address issues.

The WOM options are as follows:

   World-Class = five stars
   Sound = four stars
   Promising = three stars
   Acceptable = two stars
   Help = one star

As a weekly incentive program for the team, the operator would match the tips received when the overall rating of Sound or World-Class is achieved.  This money can be a donation towards a community cause or charity of choice.  In turn, customers can participate in your social initiative by being more mindful when tipping. Win-Win for everyone.

The point is to align staff and operations towards a common goal.  Deliver on hospitality excellence (service, food and atmosphere) to increase your rating, tips and social cause.

* food includes wine/bar program