Unlocking great customer relationships

Chris Lucas doesn’t hesitate when asked to name the most challenging period for his Lucas Restaurants group, which features the renowned Chin Chin and spans Melbourne, Canberra and Sydney.

It was Covid lockdowns, Mr Lucas said, as he relived the overnight erasure of the group’s daily cashflow, measured in the millions of dollars.

“It was a calamitous time and even now it upsets me greatly when I think about it because there was so much harm done to people,” Mr Lucas said.

“But from a business perspective, we had to pivot from being an la carte dining business to a takeaway business in the middle of a $150m rollout of restaurants and building two of the biggest restaurants in Australia - Society and Grill Americano.

“We had bankers, builders, interior designers all fretting about what was going on and unfortunately it was all coming back into my office.”

Before they decided to fight for survival and turn the business on a dime, Mr Lucas said his chief financial officer asked him what they were going to do.

“For the first time in my life I didn’t have an answer,” he said.

“So I said: “Look, I don’t know what we’re going to do but I can definitely tell you what we’re not going to do and that’s put up the white flag, and if it means we have to completely reengineer the business overnight, then we will.’ ”

To cut a long and painful story short, Lucas Restaurants not only survived Covid but never let a single worker go.

JobKeeper helped, of course, but the program excluded the 250 foreign workers employed by the group.

They were kept on with the support of their colleagues, who agreed to preference them in the new takeaway business.

The result of this extraordinary tale of resilience and survival was that Lucas Restaurants emerged from Covid with its brand enhanced, a loyal workforce and a devoted community of customers, some of whom were tipping staff up to $500.

Mr Lucas told his story in early September as part of a three-person panel at the NAB Business Summit.

He was joined by Laura Henshaw, co-founder and CEO of Kic, one of Australia’s leading health and wellness apps, and Nick Palumbo, founder of Gelato Messina which operates an international network of 35 gelato stores – 33 in Australia, two in Hong Kong and one in Singapore.

The main theme of the discussion was connecting with customers or “customer obsession”, the key element in NAB chief executive Andrew Irvine’s strategic refresh for NAB.

Ms Henshaw said Kic has a community of 2.5 million people across its social channels, and has had 850,000 downloads.

Any business built around a community, she said, owed an explanation to its members when important decisions were made.

"Community is at the core of our business - we wouldn't be where we are today without them and so ensuring their feedback is a big part of our strategy and always taking them on the journey with us is incredibly important,'" Ms Henshaw said. 

"A lot of brands in our space invest heavily in influencer-led events but at Kic we actually invest the most in our community events in creating experiences for them to come together and connect."

Mr Palumbo said he had a similar Covid experience to Mr Lucas.

After determining there was only 4-5 months of cashflow in reserve, he and his partners in Gelato Messina resolved that when the money ran out it would run out for everyone.

“And we also didn’t sack a single person, which ended up being our saving grace when everything reopened,” Mr Palumbo said.

“I had lots of friends in the hospitality industry and they were literally on their knees because they had no staff.”

More broadly, he said it was important to set the tone and culture in the business by choosing the right investors.

He advised against bringing in foundation investors mainly focused on returns, because they would lose patience and their claimed passion for the brand if dividends didn’t start flowing after the first few years.

“There’s nothing wrong with bringing in investors once the business is established, but starting off with people who don’t have the same alignment can be a recipe for disaster,” Mr Palumbo said

“It wasn’t until those external investors left (after 2006) and I sold down shares to working partners that the business really grew.”

Despite early struggles and investor challenges, Mr Palumbo said he persevered with no Plan B to fall back on.

“When I’m asked for advice it’s the first thing I say: that I’ve never had a Plan B and I just grind away until it actually works,” he said.

“If you have a Plan B, don’t go into business because the minute something goes wrong you’ll be out of there.”

Business 

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