A New Restaurant

This is a guest post from Erin at MustHaveMenus (http://www.musthavemenus.com), an online company that provides
restaurants with high quality menu designs. She blogs her thoughts on menu design trends and restaurant marketing strategies at ttp://blog.musthavemenus.com.Thanks Erin.  It’s great to get some insight from othersabout what it takes to succeed in the restaurant business.

Think a menu is just for ordering food? Think again! A menu communicates much for than just your food; it sets the tone for your customers’ dining experience.

Unfortunately, many new restaurants design their menu almost as an afterthought. I’m here to tell you that your menu should get as much attention as your dishes, the physical layout of the restaurant and your staff selections. (more…)

A big part of building your brand is consistency.  If there are things that you do well, and you know your customers enjoy, then you had better provide those things for your customers the next time they visit your restaurant.  It doesn’t necessarily matter what part of the experience the customer most enjoyed, if they liked that well enough to come back, they will be very disappointed if they don’t get it the second (or third) time they return.  Running a successful restaurant depends on your ability to get customers returning time and again, so if they do come back, you need to do whatever it takes to make sure they continue to do so.

This goes back to knowing what you do well.  If you don’t know, you better figure it out quickly.  (more…)

As we head into the new year, you should think about what your brand is, or what you would like your brand to be.  If you want to be a successful restaurant in this volatile economy, you better know who you are, and be ready to let your customers know who you are.

If you think that building a brand isn’t important to building a successful restaurant business, you haven’t been paying attention to what has been going on on the restaurant world.  (more…)

With all of the talk about how bad things are, and no clear sign of when it’s all going to end, it’s easy to lose sight of a very important point: it’s still very possible to be profitable in the restaurant business.

Case in point: Buffalo Wild Wings.

When BWW released their earning for the 3rd quarter, they reported that they were in fact making a profit.  Despite the constant barage of news about how bad things are across the board.  Buffalo Wild Wings showed that it is still possible to make a profit during tough times.  Economic experts credit the companies “differentiated brand.”

What does that mean?  It means BWW does not try to be like other restaurants.  They are different, and their customers recognize that difference.  More important than recognizing the difference, they see value in that difference, and are willing to continue to spend their money there.

It proves what I have been saying; you have to dare to be different.  You cannot afford to be like your competition.  You need to be different, and you need to do waht you do better.

This doesn’t necessarily mean there cannot be any similarities, but it does mean your customers need to be able to recognize that you are different.  This can be in menu offerings, price and portion, service, or any combination of these things.

Be different, and learn to turn that difference into profits.

Do you offer combo discounts?  A lot of major chains are now bundling items as a way to increase their sales.  They are promoting combos that encourage their customers to buy more in an effort to take advantage of the discount.

It’s the “Value Meal” idea that fast food restaurants have been using for years.  Add fries and a soft drink to the sandwich, and price it at a discount.  Now instead of just getting the sandwich sale, you are also increasing the sale of the add-on items; items that typically have a high profit margin.

Think about it: What is the highest profit margin item you sell.  For many restaurants it is fountain drinks.  If you can convince people to ad a fountain drink on to their order you make more money.  Even with a big discount on the price, it is still profitable.

I’ve written before about “perceived value.”  If the customer thinks they are getting a deal, they will see it as a value.  If the value is great enough, they will spend more in order to take advantage.  If the value as seen as being better than your competition, they will come to you instead of going elsewhere.

Take advantage of the chance to beat your competition by offering better value combos.  Bundling is popular because it works.

Are you using your menu effectively?  Chances are your not.

I found a video about a man that makes a living going to restaurants and helping them engineer their menus to increase sales.  It’s really worth watching.  I’m willing to bet that you will learn a thing or two.

http://tinyurl.com/5jx7mu

Papa Johns is trying to avert a marketing disaster in NE Ohio.

A little background info: In the first round of the NBA playoffs the Cleveland Cavaliers faced the Washington Wizards.  The Cavs have bumped the Wizards from the playoffs the past couple of years, and the Wizards didn’t want that to happen again.  Their game plan was to aggressively foul LeBron James every time he went to the basket.  Some of theose fouls were very aggressive,a nd as the series went on James did a bit of complaining.

Papa Johns pizza franchises in the Washington area used this as a marketing tool by giving away free t-shirts with the Papa John logo.  The t-shirts were emblazoned with the word “CRYBABY” and the number 23 (James’ jersey number).

While it may have been good in the Washington market, it destroyed Papa Johns in the Cleveland market (and with Cavs fans nationwide).  Like him or not, LeBron James is becoming a basketball icon with a fan base the reaches worldwide.

In order to win back fans in NE Ohio, Papa Johns is offereing a large, 1-topping pizza for 23-cents.  No I don’t know how much it costs to make a Papa John’s pizza, but my guess is that it’s more than $0.23.  Papa John’s is predicting a 900% increase in pizza sales for this one-day sale.

This ends up being a pretty expensive way to try and repair damage for a dumb marketing ploy that backfired.

I have mentioned a number of times the restaurant that I recently worked for.  It was a start up by an owner that didn’t really know or understand the restaurant business.  He had some success in other businesses, but he faced a steep learning curve when he started the restaurant.  It’s a great case study in how not to get started in this business.

One of the things that was lacking in his operation was adequate signage.  we were approaching the restaurant.  You are nearly passed it before you even realize it was there.  He was told by several people that he needed new sign, but he was slow to finally get one up.  Money was getting tight, and he was getting overly cautious on how he spent it.  That’s understandable, but there were some places that you really need to spend his money.  Making sure potential customers could see his restaurant was one of those areas.

He finally did break down and buy a new sign, and that’s made all the difference in his business.  Every time I go by his parking lot nowadays there are cars in the lot.  He doesn’t run nearly as many specials, and he’s not discounting his menu the way he used to.  Still, the customers are coming in.

When thinking about how you can make your presence known you need to make sure your customers know you are there before they reach your parking lot.  Leave them enough time to slow down and turn into your lot.  Once they get past your entrance, they may decide that it’s too much trouble to turn around and come back.  The more time you give them, the better the chance that they’ll stop.  And getting them to stop is what it’s all about.

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A recent study showed that two-for-one deals are a really bad idea for small, privately owned restaurants.  The study showed that the offers work very well at getting people into your restaurant, but as soon as the offer is over, they stop coming in.

Unfortunately, many restaurant owners don’t understand how these offers work, or don’t think through how using the offer will affect their business.  They seem to offer deals because it’s the trendy thing to do.  It’s that lack of understanding how it all works that will lead to your restaurants failure.

The idea behind the two-for-one deal is that it gets people into your restaurant, and you can show them what you have to offer (just make sure your ready for them when they get there).  It’s a great plan if it really worked that way.  The truth is, most of the people are only there because of the deal.  The nest time they want to go to a restaurant, they will look for another deal.  If you want them to come back to you, you have to give them another sweet offer.  For most of them, the only time you will see them is when you run a two-for-one offer.  Your restaurant will only get a small percentage of customers to return.  In my book, that doesn’t qualify as a successful promotion.

Now I don’t know about your operation, but most restaurants can’t afford to see their costs double as a percentage of sales, and that’s what two-for-one offers do to you.  It reminds me of the old joke about the guy that says he loses money on every deal, but he makes up for it in volume.  Unless you have really deep pockets, it does not make good business sense to run deals that cause your restaurant to lose money (unless you are running the deals to force your competition out of business).

There are a lot of good advertising methods that you can be using.  Discounted appetizers or desserts, cents-off coupons, these are just a couple of ways to draw customers in without breaking the bank.  Once you get them there, it’s up to you to make sure they come back.

Do you use one method of advertising to point to a different advertisement you’ve run?  You should.

Do you know why businesses use coupons?  Because they work.  They are a reminder of whatever deal you are running.  It may be a great deal, but without a tangible reminder, people tend to forget.  With a coupon in their hands they will be get a reminder about your restaurant, and the current specials your restaurant is running.

The down side is, people don’t always see your advertisements.  This could happen for a number of reasons; they didn’t look at the paper that day, or they might not have read the section or page that your ad was placed.  If they never see your restaurants ad, they’ll go about their lives oblivious about what they’re missing. If you want to catch their attention, you have to let them know what they’re missing.  

You may have noticed other businesses doing just that in a radio or TV commercial.  Somewhere in the commercial they say to look for the coupon or flyer in the newspaper.  When you do this, be specific.  Tell your customers exactly where to look.  Give them the section and the page number 

If your going to run an ad in the newspaper, you need to make sure people see it.  If they don’t see it, it’s just a waste of your restaurants advertising dollars.  By cross referencing your ads, you not only let them know your restaurant is running a special deal, but you remind them of where to pick up their little reminder.

I’ve posted before that marketers have shown that it takes multiple “touches” before most customers will respond.  You need to do what you can to get as many contacts with your customer as you can.  Take advantage of the opportunity to send people to your advertisements.  Once the coupon is in their hand, you’ve greatly increased the odds that they will respond.