Episode 651: The Secret Sauce Behind Groucho's Deli: 85 Years of Community with Deric Rosenbaum

Deric Rosenbaum, President and CTO of Groucho's Deli, a legendary brand celebrating 85 years in business, shares his journey from a commercial construction background to leading the brand's growth and technological evolution, emphasizing a philosophy of "adapt, not change" to modernize systems while preserving the core essence of community and hospitality. He discusses the strategic decision to prioritize controlled, concentric growth through franchising, the importance of fostering human connection in an increasingly digital world, and how leveraging data and a robust tech stack (including Square for restaurants, Ovation, and Bikky) helps optimize operations and enhance customer loyalty without sacrificing the personal touch.

10 Key Takeaways

1. "Adapt, Don't Change": Modernize systems (technology, operations) while retaining the core brand identity and legacy (e.g., original recipes).
2. Community and Hospitality are Core Assets: Building community and genuine hospitality is crucial for customer loyalty and takes time and investment.
3. Controlled Growth Strategy: Groucho's prefers slow, measured, and concentric growth to maintain quality, brand recognition, and efficient distribution, avoiding rapid, capital-intensive expansion common in private equity models.
4. Technology as an Enabler, Not a "Shiny Object": Tech should enhance guest experience and simplify operations, not just be used for its own sake.
5. Prioritize Retention Over Acquisition: Focusing on retaining existing guests drives frequency, which in turn leads to organic new guest acquisition and revenue growth, even during economic pressures.
6. The Importance of an Open API: A robust and open POS API (like Square's) allows for seamless integration with "best of fit" third-party tools (like Ovation for feedback and Bikky for data) to create a unified commerce ecosystem.
7. Data-Driven Decisions: Utilizing a customer data platform (CDP) like Bikky allows for deep understanding and segmentation of guests to tailor marketing and improve operational efficiency.
8. Consistency Creates Loyalty: Standardizing processes across the chain and delivering consistent experiences fuels success in the long term.
9. Invest in Training and Culture: Especially in a franchise model, training operators (not just money partners) on the fundamentals of hospitality is key to maintaining brand standards and a positive guest experience.
10. Listen to Your Guests: Use feedback mechanisms (like Ovation's text-based system) to engage in two-way conversations and make targeted operational adjustments based on sentiment analysis.