Restaurant marketing
is both an art and a science that is shrouded in mystery for far too
many restaurant owners. Unfortunately, many advertising sales
people don’t want you to know what’s really working. They want you to
think that the television spots your competitor is running with them
will be the answer to all of yours sales-building challenges. Not so.
This brief report seeks to outline some of the restaurant marketing techniques and principles that are working in successful restaurants around the country.
Let’s
get started with some of the most frequently asked questions restaurant
owners ask when seeking a better way to market their restaurants:
What are the keys to great restaurant marketing?
There
are several components of successful restaurant marketing. This isn’t
an all inclusive list, but some top strategic restaurant marketing
issues include:
Restaurant Marketing: Branding
There
has been lots of hype over the last few years about branding. We’re all
being told we need to do more branding and a better job branding, but
no one has really stopped to explain what a brand is and how you build
it. A brand is a promise. It’s what customers, employees
(Internal Customers), vendors, the media and all other key constituents
come to expect in dealing with your restaurant. Brand-building is
closing the gap between what you promise and what you deliver. A strong
brand is one that has alignment between the promise and
execution. It’s not something that happens when you advertise,
and it’s not that people recognize your logo or recall your advertising.
Restaurant Marketing: Positioning
Positioning
is an underleveraged restaurant marketing component. Positioning is the
place you hold in the customers or prospects mind relative to the
competition (the cheaper choice, the higher quality choice, et cetera).
Effective positioning involves incorporation of your Unique Selling
Proposition (U.S.P.). The USP is the one thing that only you can
claim. It’s a point of differentiation that the competition
either cannot or does not claim. An example is Burger King versus
McDonald’s. If Burger King can convince you that a flame-broiled burger
tastes better than a fried burger, they’ve won the war because
McDonald’s will never go into all 14,000 stores and rip out fryers to
install char-grilling pits.
Restaurant Marketing: Due Diligence
Restaurant marketing
doesn’t happen in a vacuum. Effective restaurant marketing must
be built on a foundation of fact and knowledge about the market, your
competition, your customers, your Internal Customers, financial
history, marketing history, the industry, and outside forces that will
impact your business. It’s a lot to worry about, but restaurant
marketing has to factor these considerations into the overall
strategy. Not even Coca-Cola can afford to market to everyone all
the time, so effective market research and due diligence can help you
be more effective in your restaurant marketing efforts.
Restaurant Marketing: Menu Mix
Every
six to twelve months, you’ll want to conduct an analysis of your
menu. This will include profitability analysis and a competitive
restaurant menu analysis. To keep your menu fresh, relevant, and profitable,
you’ll need to know specifically how each item on your menu is
performing and also how it stacks up next to your top competition.
Think of each item on your menu as a tenant leasing space and it has to
earn its right to the space you’ve granted it.
Restaurant Marketing: Training
Restaurant
marketing, human resources, operations and training are inextricably
connected. You’ve heard before that great restaurant marketing will
just kill a bad operation faster. That’s because if you send
people into an operation that is performing at a B- level or below,
people will have a bad experience and your money would be better spent
on operations improvement rather than restaurant marketing. Training is
a vital component of restaurant marketing for this reason. Your
training will have to go beyond just employee orientation. You’ll need
an ongoing program that constantly improves and evolves your staff
competencies. It’s also a good idea to include a restaurant marketing
component in your training program so that you have a staff of
ambassadors to help your sales-building efforts.
There’s only 4 ways to increase sales for your restaurant:
Sales-building
is so much easier when you know how it works. And fortunately,
the methodology is much easier with the following definitions. Every
effort you could make to build sales falls into one of just four
categories. Every promotion, advertisement or offer will push one
of the following four buttons:
Restaurant Marketing: New Trial
These
are first-time customers buying from you for the first time. They
will establish their opinion of your company during this first purchase
and decide what percentage mindshare to award you in the future.
New trial is the most expensive of the four sales-builders as
acquisition costs are typically 7-10 more costly to execute than the
other sales builders. However, it is impossible to increase
frequency, check average or party size without customers to start
with. After a customer base has been established, however, it is
advisable to focus considerable efforts on the sales-builders listed
below.
Restaurant Marketing: Frequency
Is
how often existing customers return to you for future purchases.
Frequency is generated by developing enduring relationships and loyalty
among customers. While it is rare to disagree that frequency is
important, an alarming number of businesses fail to appropriate the
needed mindshare and resources to developing successful programs.
Consider that the average Pizza Hut loyalist purchases a pizza every 30
days. If Pizza Hut can get this group to purchase just one more
pizza in those 30 days, they’d double their sales. So why do they
blast the airwaves versus developing more successful frequency
programs, such as bouncebacks, loyalty programs and the like?
You’ve got me.
Restaurant Marketing: Check Average
Often
refers to the total purchase for each transaction. In this
instance, however, we are referring primarily to per person check
average – the amount each guest or customer spends at purchase.
Check averages can be built through price increases, suggestive selling
programs, effective internal merchandizing, and through add-ons or
upgrades to name but a few techniques. You’ll want to make sure
that the increase in check average remains consistent with your overall
positioning strategy.
Restaurant Marketing: Party Size
As
the name would suggest, Party Size refers to the number of people in
each party. Do customers primarily visit alone, in groups of 2,
groups of 5 or more? Whatever the number, you’ll want to devise
programs that encourage customers to bring more of their friends with
them for each visit. Examples of programs include bus drivers eat
free, birthday clubs and refer-a-friend tactics. Encouraging
party size turns customers into advocates and enlists them as part of
your sales-building team.
When asked what was the single
most important event in helping him arrive at the theory of relativity,
Albert Einstein was reported to have said, “Figuring out how to think
about the problem.” Use the above definitions help you better
frame the challenge of growing your sales.
How much should we spend on restaurant marketing?
There
are several rules of thumb and ratios in the restaurant industry and
there are some for restaurant marketing as well. A typical
restaurant should allocate 3% - 6% of sales to restaurant marketing.
It’s also a good idea to allocate this money proportionally to your
sales volume. Meaning, if July is your busiest month, you should
spend a proportionate amount on your restaurants marketing budget in
that month. Fish where the fish are biting. Some restaurant
owners look at slow periods and think that’s when they need to spend
money to drive sales, so they spend a big chunk of cash trying to build
a happy hour business and forgo building on top of their busy
periods. Fact is, there is a reason people aren’t coming in from
4:00 PM – 6:00 PM and you’ll be sending valuable marketing dollars down
a black hole if you try to build this period. There are nearly
one million restaurants in the United States and probably only 2% of
them are busy from 4:00 PM – 6:00 PM. Restaurant marketing can’t
change behavior; it can only influence existing behaviors. Spend
your restaurant marketing dollar where it will have the best return for
your restaurant.
How do most restaurants market themselves?
It’s
sad really, but 80% - 90% of restaurant marketing budgets are spent
against new trial – getting a new customer to visit for the first
time. This is the least effective place to spend your
money. The majority of new trial efforts are spent against mass
media advertising, which is costly and has dismal return on
investment. The fact is, new customer acquisition is 7-10 times
more expensive than building restaurant sales through increased
frequency, check average and party size. But restaurant marketing
isn’t always about what’s most effective, more often, it’s about what
everyone else is doing. Restaurant operators see that their
competitor is on television or in the yellow pages or on a billboard
and that they should be too. They do this without regard for
what’s working. Restaurant owners have to wear so many hats that
sometimes they just do what’s easiest – they write a check for mass
media advertising and hope for the best. Mass media is often more
about feeding ego than driving sales. It’s also impossible for
most companies to compete in a toe-to-toe battle with the big
guys. Subway spends $290 million per year on television.
They can do that because they are a multi-billion dollar enterprise – a
title less than 100 restaurant corporations in the world can
claim. The question you’ll have to ask yourself is do we want to
jump off the bridge just because so many other people are?
Who is doing a great job of restaurant marketing and what works about their restaurant marketing efforts?
There
are several examples of companies large and small that are doing a
great job of restaurant marketing. I’ll give you some examples of
each. On the larger side, Starbucks is doing an awesome
job. They spend more money on training than they do on
advertising. They do a great job with their internal
merchandizing and their menu is very focused. They don’t spend
money on mass media and instead focus on a core product line and
flawless execution. They are now the fastest growing take-out
operation in history.
Examples of successful independent restaurant
marketing abound. Charlie Trotters is world-renowned, but you’ve
probably never seen a billboard or television spot for them.
Charlie Trotters does an incredible job with promotion and positioning
the namesake chef as a culinary expert. When you visit Chicago,
you want to go to his restaurant just for that reason – not because of
any advertising he has done.
What are some examples of good restaurant marketing tactics?
There
are no silver bullets when it comes to restaurant marketing. Some good
examples of successful restaurant marketing tactics are email
marketing, bounce-backs, affinity marketing programs, publicity through
event marketing, partnerships with other local retailers and, of
course, internal merchandizing such as bathroom signage and menu
merchandizing.
How do I measure the effectiveness of our restaurant marketing?
If
you cannot prove the dollars you spend persuade people to do business
with you, you should not advertise. If you can’t see a direct
relationship between restaurant marketing and increased sales, your
marketing isn’t working.
One piece of analysis we have
conducted for Clients is to compare the variances, period over period,
for sales and restaurant marketing expenses. We look to determine a
correlation. It’s amazing how frequently we find that there is
absolutely no correlation between sales and restaurant marketing. The
graph here is an actual Client chart that shows this
relationship. This was an independent restaurant operation that
had a steady period over period sales increase of around 8%. The
other line represents their advertising expenditures. As you can
see, there is absolutely no correlation between the two lines.
For this independent operator, that represented about $150,000 in
advertising dollars that could have gone straight to the owners back
pocket instead. This restaurant owner had solid operations and he
wouldn’t have felt any change in his sales volume for at least a couple
of years by canceling his advertising. The restaurant advertising
wasn’t working. After some modifications, we ran the analysis
again and found that each dollar spent had a direct impact on sales and
showed a positive return on investment that could be measured.
Before the measurement wasn’t there, so it was hard to say with
absolute certainty if the advertising was working. The poor
marketing was masked by the increases in sales, but one had nothing to
do with the other. What is Local Store Marketing and Neighborhood Marketing and does it work for restaurants?
Local
Store Marketing and Neighborhood Marketing are basically the same
thing. It’s a marketing philosophy that seeks to build competitor
proof relationships with customers and employees without a reliance on
mass media advertising. It’s about all of the elements we’ve
discussed so far in this special report plus a whole lot more.
Simple fact is, unless your one of those 100 restaurant companies
that’s doing hundreds of millions of dollars in sales per year, you
can’t afford not to focus on Local Store Marketing over
advertising. Don’t fall into the trap of jumping off a bridge
(and advertising) just because everyone else is. The competitive
advantage is found in the fact that many of your competitors are not
running effective Local Store Marketing for their restaurant.
Local Store Marketing and Neighborhood Marketing are potent tools in a
variety of retail business arenas, and the restaurant business is
definitely an environment for which it’s well suited.
The fact that restaurant marketing is not easy is part its competitive advantage
Effective
restaurant marketing isn’t easy. It takes a lot of careful
research, analysis and testing. It’s also ever evolving, which
makes it even more difficult to master. The most difficult part
is that restaurant owners are in the restaurant business, not
professional marketers. But don’t be discouraged. It’s not
all gloom. The fact that effective restaurant marketing is
difficult to master is what can give you the competitive
advantage. Resist the temptation to change everything at once or
to go it all alone. You can start small and build your marketing
competencies over time. In the beginning, do simple programs so
you can execute them well and measure the results. And if you’re
not sure if your current marketing is working, save your money until
you can prove the dollars invested persuade customers to buy more and
buy more often.
Contact us to find out how Quantified Marketing Group can help your restaurant.
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