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Sometimes it Pays to be Unpredictable and play Games with Customers

Romano
Phil Romano

Phil Romano is an Italian American who has started a series of restaurant chains.  As a serial entrepreneur he has launched some 25 different restaurants concepts which produce over $1.5B in annual revenues.  Successful ventures include Cozymel’s, Fuddruckers, Eatzi’s and Romano’s Macaroni Grill.  He has had his share of flops too including Baroni’s, an expensive men’s clothing retailer and a seafood restaurant called Lobster Ranch.

In a recent interview in Fortune magazine he tells how he financed the launch of Fuddruckers, a high-end burger restaurant.  It was 1980 and he needed $150,000 but no bank would lend it to him.  So he sold 48% of the business in the form of 10 shares for $15000 each to wealthy customers.  He retained 52%.  The chain was successful and at its IPO in 1983 each of his investors recouped $3.4m.

Romano now runs a restaurant start-up incubator called Trinity Groves.

When he started Romano’s Macaroni Grill in San Antonio, Texas he found that the restaurant was busy at weekends  but there was very little traffic in the early part of the week.  So he decided that one Monday or Tuesday every month all the food would be free but he did not announce which day.  People constantly called to ask, ‘Is tonight the night?’  They found out when they arrived.  Word spread and the business increased dramatically.

Standard management training dictates that you do not play games with your customers.  You should deliver a predictable and expected outcome consistent with your brand.  But Romano did something unpredictable and  introduced a form of gamification.  If the customers played along they were sometimes rewarded with a free meal and then happily went on to tell all their friends.  Sometimes it pays to play a game with your clients.

Based on a chapter in Think like an Innovator by Paul Sloane published by Pearson.

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