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REVIEW SUMMARY
Company. Dinner Done
Industry. Food
Key. Focusing on customer relationships and inventory cost control.
When they first opened their business, Audra and Dan Nasser's idea may have appeared to others as part of a fad.
The concept — a kitchen where you could prepare a number of meals in a short time, and then bring them home to cook them — seemed overdone. Even Time Magazine and the New York Times were writing about the latest small business craze, collectively referred to as the “fix-and-freeze” model.
The Nassers admit to having been inspired by a successful business started in the western United States called Dream Dinners, and soon became aware of the idea's popularity locally.
Of course, there's a huge difference between fads and trends that makes getting involved with the former a significant risk. While trends persist, fads die out.
Many of the Nassers' competitors found themselves on the painful side of the line as the fad died out. Between 2004 and 2009, Dan says, “40 businesses opened and closed that were just like ours.”
Despite that, the Nassers' kitchen stands out six years later.
The husband and wife pair operates Dinner Done, a Tampa-based small business with 27 employees that first opened in 2004. The couple also oversees operations in two other locations, with a store in Brandon, as well as Centerville, Va.
The two were brought to their current opportunity by a difficult moment, when Dan, a former electrical engineer, was laid off. In the ensuing search for a new direction, Audra noticed “a really interesting business idea” that would soon be realized as a kitchen facility in the Carrollwood area of Tampa.
Shortly after opening, the Nassers began to see the same thing Time Magazine did — what they thought was a unique concept was being emulated again and again all around the area.
The subsequent failure of some competitors ended up hurting the emerging business by dragging its reputation down. Potential customers seemed to be grouping every “fix-and-freeze” business into one pool, refusing to give Dinner Done a second look.
Those quickly escalating circumstances forced the Nassers to identify their strengths early on, and capitalize on them.
Engineering recipes
Beyond the “fix-and-freeze” market, Dinner Done has to account for other competitors in the food space. More than restaurants, however, Dinner Done considers their main competition to be your local grocery store.
That differentiation is tied to the type of service they aim to provide their customers.
Rather than come in to prepare one small meal for one night, Dinner Done's customers prepare four, eight, or twelve entrees at a time. So customers aren't thinking about dinner for one night; instead they're thinking about dinner for up to a month.
In that sense, Dinner Done can compare their own performance to grocery store industry averages to gauge their efficiency. Specifically, Dan keeps a close watch on the company's ability to manage inventory.
Like grocery stores, the Nassers rely on freshness to drive sales. In fact, Audra says the company has to outperform Publix and Sweetbay and others to sustain their business. “We have to be at the grocery store level — and then better,” she says.
That focus on freshness makes balancing inventories critical for Dinner Done. Fortunately, Dan's engineering background helps him evaluate quantity as well as quality.
It's helped him successfully maintain food inventories to the point where the company loses less than 1% of their foodstuffs to expiration, a number well below the grocery store average.
The decisions surrounding each individual ingredient can have huge impact. Dan easily demonstrated how upgrading Dinner Done's chicken quality costs roughly $60,000 over the course of a year.
Customer connection
Beyond the Nassers' attention to inventory details, the couple has taken another approach to doing business from the beginning that has lifted their company above competitors.
From the start, they realized that developing customer relationships would help them build a more successful business. They recognized the importance of building a company not just according to your own plans, but also with consideration for customer needs.
“We really do have a personal tie-in with our customers,” Audra says.
Their efforts to connect with customers started with hours spent constructing dishes in the kitchen with their clients, and soon were translated to a high-tech collaboration with a local marketing firm.
Christopher Karlo is a partner with Mercury New Media, the company that has helped Dinner Done utilize technology to connect to its customer base. Their relationship has yielded a website that enhances the Nassers' ability to fulfill their number one goal of developing those customer connections.
With the company's online infrastructure in place, Dinner Done is able to fully track each individual customer's buying habits, which contributes to Dan's mission of keeping food inventories balanced.
Having worked with the Nassers, Karlo recognizes their ability to master customer relationship relative to the competition. “They really do understand their customers well,” he says.
He points out that what makes them so successful at connecting with their clients, more than anything else, comes back to the user experience they deliver.
“Loyalty is built through customer experience,” he says, and that loyalty in turn builds a solid foundation from which a company can grow.
To that end, the Nassers have installed a loyalty program to reward their regulars. Called “Super Chef,” the program awards customers who purchase three sessions in a four-month period with one free additional session. Dinner Done has given back more than $80,000 worth of services to customers over the life of the program.
The company's ability to develop a loyal customer base reminds Karlo of another industry that Dinner Done can look to in an effort to increase their business: your typical hair salon.
Hair salons succeed by establishing regular customers, and often grow their business in one of two ways: by encouraging more frequent visits or by introducing regulars to new hair products.
It's an interesting parallel for a company in a completely different industry with a very similar approach to customer relationships, and a perfect model for growth assuming Dinner Done has achieved substantial market penetration. Indeed, 86% of their clients are regular repeat customers (the most committed of which
have been through Dinner Done's doors more than 60 times).
At the same time, the Nassers feel they may yet be able to add some new faces to their regular customer list.
Future growth
For a company with only three locations, the size of Dinner Done's regular e-mail newsletter mailing list is surprising. More than 23,000 recipients.
Even more impressive, that list has totally been built from scratch. The Nassers haven't paid for any names, and they've only minimally invested in any type of mass media advertising.
Which begs the question for Audra and Dan: what could effective advertising do for their business?
The Nassers realize the potential for their business that could come from a successful pursuit of new clients. About the business' next move, Audra says, “Our focus is on reaching out to new customers.”
But how they'll approach advertising has not yet been decided. It's a daunting task for Audra, who put her head down and sighed when asked about her strategy for the subject.
Describing the task, she expresses her opinion simply and clearly. “I'm confused,” she admits.
Of course, any business looking to advertise is focused on a verifiable return on investment. And for most restaurants, there's one tried and true method for tracking results. But it's something the Nassers would rather avoid; that is, they hope to never issue a single coupon.
With that option off the table, what does Dinner Done use to evaluate ROI? It's a difficult question. To answer it, Audra will likely go back to her business' existing strength.
“We're a social business,” she says, citing the unparalleled effectiveness of word-of-mouth advertising over her business' six years. That characteristic is drawing her interest to the increasingly popular social network options, as well as smart phone technology that could drive popularity.
Although the advertising issue is daunting for the owners of a relatively young business, their successes in other areas — efficient inventory management and customer relationship management, most notably — should enable them to continue to succeed.
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