Value Innovation:Value Innovation:

Solutions To Increase Participation Solutions To Increase Participation & Grow Dining Revenues In Tough & Grow Dining Revenues In Tough

Economic TimesEconomic Times

Your HostsYour Hosts

Richard Fritz,Richard Fritz,Director of Dining Services Director of Dining Services

Murray State UniversityMurray State University&&

H. David Porter, FCSI H. David Porter, FCSI President & President &

Chief Executive OfficerChief Executive OfficerPorter Khouw Consulting, Inc.Porter Khouw Consulting, Inc.

Value-Added Dining At MSU:Value-Added Dining At MSU:A Case StudyA Case Study

Campus OverviewCampus Overview Campus master plan calls for 12,000 students by 2012.

Projection for 4,800 residential students Large commuter population

Retention issues (rate currently 60-70%) “Our goal is to provide our campus community with a dining

experience.” Inviting ambiance Friendly staff High food quality & good selection

Changes to the campus student center. “The Curris Center has transformed more into meeting space than a

true student center.” Campus expanding to the south, away from the residential living &

dining area.

Inside MSU Dining ServicesInside MSU Dining Services

Self operated & self supporting Mix of meal plan options One residential dining venue & multiple retail locations Challenges:

Reduction in meal plan participation due to campus policy changes Students buying down to lowest priced meal plan Campus moving south, away from Winslow Dining Hall Minimal funds for upgrades/new facilities

How can MSU Dining Services add value without capital improvements or other major investments?

How can MSU Dining capture more cash business from the campus community?

What if there were no meal plan customers? How would MSU dining compete for business?

Looking for SolutionsLooking for Solutions

MSU hired Porter Khouw Consulting to create a campus-wide dining services master plan. The goal: To identify ways to boost revenue & customer satisfaction for/with campus dining services.

Discover: Focus groups & personal interviews

Students (residential & commuter) Faculty/staff Administrators

Web-based survey: More than 1,100 responses

Looking for SolutionsLooking for Solutions

Customer feedback: Hours of Operation Limited hours of operation

T-Room in Curris Center closes at 2:30 p.m. M-F and is closed on weekends. Centrally located Popular with students

Limited campus dining options after 8:30 p.m. Fairly heavy on-campus delivery

Business going off campus Campus surrounded by restaurants

Looking for SolutionsLooking for Solutions

Customer feedback: Meal plans Students feel ripped off (leftover meals & Flex Dollars). Meal plan equivalency not “fair”/full meal value Complaints from parents about leftover meal plan money. One plan limited one meal per meal period. Campus food perceived as expensive.

Results: Most residential students were buying the lowest priced plan. Leftover Flex Dollars=run on Fast Track c-store.

“The meal plan program is one of the major factors contributing to students being driven off campus.” –MSU administrator

Looking for SolutionsLooking for Solutions

Customer feedback: Menu Variety & Selection More variety in Winslow Dining Hall

Less ‘fancy’ food like tapas, more pizza & chicken fingers Wider variety of weekends

Looking for SolutionsLooking for Solutions

Customer feedback: Pricing: Some administrators & students expressed some dissatisfaction with the price of food on campus, particularly in T-Room (too high) Portion vs. price especially at the entrée station in the T-Room. “Students think the T-Room prices are expensive, especially when compared to off-campus restaurants that offer $1 menus and combo meals.”“We (commuter students) can eat off campus for less than we can on campus with a much larger variety…especially with the wide variety of discounts available to Murray students…The price of eating on campus is not worth the convenience.”

Innovative ThinkingInnovative Thinking

What if:

Potential number of required meal plan holders is stagnant?

Optional meal plan participants are opting not to purchase full meal plans?

There is an large untapped cash business that your department isn’t realizing? Hint: The answer may lie in your residential dining component.

How can you enhance your dining program to add VALUE and build business and customer satisfaction without major capital investment?

The Power of ValueThe Power of Value

A value-added dining program:

Provides meaningful residential life experience (especially for freshmen)

Allows meal plan holders to eat what & when they want

Provides the ultimate flexibility in dining options

Eliminates missed meals

Appeals to parents

Provides an easy transition from home for incoming freshmen

Enhances social interaction & community bonding

Can have a positive impact on recruitment & retention

Elements of a Value-Added Dining ProgramElements of a Value-Added Dining Program

Extended hours of operation Tailored to the student clock Generally doesn’t conflict with class schedules Continuous service

Food is always accessible (just like home) Anytime Dining Meal Plans (for all customer groups)

Provides unlimited access to residential dining venues during operating hours

Extras: Guest meals and dining dollars Plans can also be divided into three tiers:

Unlimited Silver, Gold & Platinum Encourages residential students to stay on plan & commuters to buy

higher priced plans. Wide variety of food & services

Menu options that appeal to students Added benefits: special theme dinners, free parking, etc.

Value-Added Effects on Campus Dining ProgramValue-Added Effects on Campus Dining Program

Increased customer satisfaction Students have access to food nearly all day

Boost in meal plan participation Meal plan retention rates increase

Enhanced dining & social experiences for customers Enhanced community gathering opportunities

Meaningful freshmen experience

But What About…But What About… Increased Food CostIncreased Food Cost

Perception: “The students will eat us out of house & home.”Perception: “The students will eat us out of house & home.” Reality: Most students still eat between 11-13 meals per Reality: Most students still eat between 11-13 meals per

week.week. Reality: Food costs remain stable or decreaseReality: Food costs remain stable or decrease

Less wasteLess waste Increased Labor CostIncreased Labor Cost

Perception: “Our labor costs will skyrocket.”Perception: “Our labor costs will skyrocket.” Reality: Service can be throttled up or down depending on Reality: Service can be throttled up or down depending on

daypartdaypart Reality: A mix of served and self-serve stations help keep Reality: A mix of served and self-serve stations help keep

labor cost low.labor cost low. Meal plan price increase?Meal plan price increase?

Perception: We will have to charge more for meal plans.Perception: We will have to charge more for meal plans. Reality: In most cases, meal plan prices do not increase. Reality: In most cases, meal plan prices do not increase.

New Directions at MSUNew Directions at MSU

New Meal Plan Offerings & Program Changes Meal Plans

New Anytime Dining Plan introduced in Fall 2010. Unlimited Access Plan: Provides access to all-you-care-to-eat dining in Winslow Dining Hall from 7 a.m.-11 p.m. Monday-Friday & 8 a.m.-8 p.m. Saturday & Sunday plus eight guest meal passes & $75 in Flex Dollars per semester. Estimated cost: $1,436 per semester (current 125 plan priced at $1,327) MSU may consider adding a 5-Day Unlimited Access Plan. All freshmen students will be required to purchase this plan. This includes bulk of meal plan holders. Net: $1 million in meal plan surplus (money that can be used to make other dining service program enhancements/renovations)

Other Meal Plan Options: 175 meals/ $400 Flex, Cost: $ 125 meals/ $300 Flex, Cost: $ 85 meals / $150 Flex, Cost: $

MSU eliminated existing highest cost & unpopular plans. Adjusted meal plan pricing so there is minimal difference between the plans.

Strategy: Get students to buy/stay on the plan that offers the best value (unlimited access).

New Directions at MSUNew Directions at MSU

Additional changes to Winslow Dining Hall Trayless dining More customer-friendly servery with relocated salad bar & new all-day breakfast bar. Beverage stations relocated to dining areas. More display cooking/made-to-order foods Metered parking near building

Hang tags for commuter meal plan holders T-Room: MSU is considering renovating this facility in Fall 2011. Sugar Cube: Menu mix modified to appeal to a broader customer group.

More grab-and-go Wide variety of coffee & espresso-based drinks

Questions?Questions?