View Full Version : Restaurant Marketing

09-26-2004, 03:50 PM
Restaurant Marketing (http://www.restaurant-public-relations.com)

Aaron D. Allen

Restaurant Marketing (http://www.restaurant-public-relations.com)
is both an art and a science that is shrouded in mystery for far too many restaurant owners. Unfortunately, many advertising sales people donít want you to know whatís 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.

Letís get started with some of the most frequently asked questions restaurant owners ask when seeking a better way to market their restaurants:

<b>What are the keys to great Restaurant Marketing (http://www.restaurant-public-relations.com)

There are several components of successful restaurant marketing. This isnít an all inclusive list, but some top strategic marketing issues include:

<b>BRANDING: </b> There has been lots of hype over the last few years about branding. Weíre 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. Itís 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. Itís not something that happens when you advertise, and itís not that people recognize your logo or recall your advertising.

<b>POSITIONING:</b> 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. Itís a point of differentiation that the competition either cannot or does not claim. An example is Burger King versus McDonaldís. If Burger King can convince you that a flame-broiled burger tastes better than a fried burger, theyíve won the war because McDonaldís will never go into all 14,000 stores and rip out fryers to install char-grilling pits.

<b>DUE DILIGENCE:</b> Restaurant marketing doesnít 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. Itís 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.

<b>MENU MIX:</b> Every six to twelve months, youíll want to conduct an analysis of your menu. This will include profitability analysis and competitive menu analysis. To keep your menu fresh, relevant, and profitable, youíll 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 youíve granted it.

<b>Thereís only 4 ways to increase sales for your restaurant:</b>

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:

<b>NEW TRIAL:</b> 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.

<b>FREQUENCY: </b> 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, theyíd double their sales. So why do they blast the airwaves versus developing more successful frequency programs, such as bouncebacks, loyalty programs and the like? Youíve got me.

<b>CHECK AVERAGE:</b> Often refers to the total purchase for each transaction. In this instance, however, we are referring primarily to per person check average Ė 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. Youíll want to make sure that the increase in check average remains consistent with your overall positioning strategy.

<b>PARTY SIZE:</b> 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, youíll 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, ďFiguring out how to think about the problem.Ē Use the above definitions help you better frame the challenge of growing your sales.

<b>How much should we spend on marketing our restaurant?</b>

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 marketing. Itís 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 thatís 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 arenít coming in from 4:00 PM Ė 6:00 PM and youíll 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 Ė 6:00 PM. Marketing canít change behavior; it can only influence existing behaviors. Spend your marketing dollar where it will have the best return for your restaurant.

<b>How do most restaurants market themselves?</b>

Itís sad really, but 80% - 90% of Restaurant Marketing (http://www.restaurant-public-relations.com)
budgets are spent against new trial Ė 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 isnít always about whatís most effective, more often, itís 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 whatís working. Restaurant owners have to wear so many hats that sometimes they just do whatís easiest Ė they write a check for mass media advertising and hope for the best. Mass media is often more about feeding ego than driving sales. Itís 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 Ė a title less than 100 restaurant corporations in the world can claim. The question youíll have to ask yourself is do we want to jump off the bridge just because so many other people are?