Penn Station Transforms Comms to Combat Pandemic
Every restaurant company had to rethink core business operations during the COVID-19 pandemic. While nobody is exactly pleased by the opportunity presented by the pandemic, “survival mode” thinking helped companies look inward with fresh eyes.
That’s what Craig Dunaway of Penn Station East Coast Subs experienced as he re-thought internal communications completely to help the company power through the most difficult times with robust transparency.
The company was doing well prior to the pandemic, with same-store sales up about 7 percent. And since those dismal weeks in March, sales have returned. Year-over-year, July same-store sales were up 6.97 percent, so things are back on track despite the ongoing difficulties.
Dunaway said one of the most important things for the whole business was expansive communication in a time of chaos. It was a lesson he learned in a 2013 credit card breach.
“It’s one of the best things we ever did, our franchisees were worried and scared, I started writing memos to 'zees about what was going on because we had to have a third-party forensics team come over. Over about a 54-week period, I wrote about 52 memos,” said Dunaway. “I said, I’m keeping people informed or people are going to come to their own conclusions and I’m going to let everyone know what’s going on.”
In the first 40 days of this latest crisis, he sent out similar updates every single day, and in the first two months he and the executive team had sent out 51 memos all informed by daily staff meetings that examined what was relevant yesterday and what will be relevant for the day.
“We have about 85 franchisees with those 309 stores,” said Dunaway. "To keep them informed, we had to keep the corporate staff informed.”
The company added delivery, something it hadn’t done previously, but with a high portion of carryout already, it was just a matter of tweaking the marketing to get consumers to use the new channel and get the 38 percent of dine-in customers to utilize off-premises in general. All of that was communicated zealously.
“That’s not a key learning, it’s what I build my business philosophy off of, it’s speaking candidly and from the heart,” said Dunaway. “I don’t try to sugarcoat the situation.”
And it wasn’t just internal communication. He said the used the same mantra with everyone.
“We did it with consumers and franchisees and suppliers and everyone knew where we stood all the time,” said Dunaway.
Partly, it was getting true information out to consumers, telling them what the company is doing and does routinely to stay clean and how they’re making rare, deep concessions on deals and family bundles for homebound consumers. The company was also transparent with suppliers, saying it was not shutting down, but things may be volatile. The communication push also meant sharing information from the field with the rest of the company.
“On a daily basis—we had our area reps stranded at home–we had them call the restaurants and call the managers. It was annoying for some of them, and I get it, some of the mangers are working 70 hours a week and the area reps are sitting at their cushy desk. But we wanted to know how they were dealing with operational issues and employee issues—to get a pulse of what is going on,” said Dunaway.
Then it was a matter of sharing all that knowledge with managers across the organization. Memos are one thing, but can get ignored. Dunway said they sent key information via the point-of-sale system and alerted staff to the continual marketing updates.
“It created so much efficiency for us. I will tell you, after 30 to 45 days, we were virtually getting no phone calls. I said that to Lance Vaught, our VP of ops, if we’re getting phone calls form mangers or franchisees asking us questions and we didn’t cover it in the memo, we screwed up,” said Dunaway.
He said as the company looks to “get back to the core of who we were,” which parts of the COVID-era communication focus stay remains to be seen, but whatever the strategy, is will be more efficient and more transparent.