Value Innovation:

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

Your HostsRichard Fritz, Director of Dining Services Murray State University&H. David Porter, FCSI President & Chief Executive OfficerPorter Khouw Consulting, Inc.

Value-Added Dining At MSU:A Case Study

Campus OverviewCampus master plan calls for 12,000 students by 2012.Projection for 4,800 residential studentsLarge commuter populationRetention issues (rate currently 60-70%)Our goal is to provide our campus community with a dining experience.Inviting ambianceFriendly staffHigh food quality & good selectionChanges 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 ServicesSelf operated & self supportingMix of meal plan optionsOne residential dining venue & multiple retail locationsChallenges:Reduction in meal plan participation due to campus policy changesStudents buying down to lowest priced meal planCampus moving south, away from Winslow Dining HallMinimal funds for upgrades/new facilitiesHow 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 SolutionsMSU 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 interviewsStudents (residential & commuter)Faculty/staffAdministratorsWeb-based survey: More than 1,100 responses

Looking 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 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 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 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 entre 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 varietyespecially with the wide variety of discounts available to Murray studentsThe price of eating on campus is not worth the convenience.

Innovative 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 isnt 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 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 ProgramExtended hours of operation Tailored to the student clock Generally doesnt conflict with class schedules Continuous serviceFood is always accessible (just like home)Anytime Dining Meal Plans (for all customer groups)Provides unlimited access to residential dining venues during operating hoursExtras: Guest meals and dining dollarsPlans can also be divided into three tiers:Unlimited Silver, Gold & PlatinumEncourages residential students to stay on plan & commuters to buy higher priced plans.Wide variety of food & servicesMenu options that appeal to studentsAdded benefits: special theme dinners, free parking, etc.

Value-Added Effects on Campus Dining ProgramIncreased customer satisfactionStudents have access to food nearly all dayBoost in meal plan participationMeal plan retention rates increaseEnhanced dining & social experiences for customersEnhanced community gathering opportunitiesMeaningful freshmen experience

But What AboutIncreased Food CostPerception: The students will eat us out of house & home.Reality: Most students still eat between 11-13 meals per week.Reality: Food costs remain stable or decreaseLess wasteIncreased Labor CostPerception: Our labor costs will skyrocket.Reality: Service can be throttled up or down depending on daypartReality: A mix of served and self-serve stations help keep labor cost low.Meal plan price increase?Perception: We will have to charge more for meal plans.Reality: In most cases, meal plan prices do not increase.

New 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 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?