A New Restaurant

Anyone that has actively marketed their restaurant knows that attracting new customers can be very expensive.  I’ve seen some claims that it is more than three-times as expensive to bring in a new customer than it is to keep an existing customer.

So, after spending the money for your restaurant marketing campaign, what are you doing to convert those new customers into returning customers?

The first step is to train your staff how to treat customers correctly.  Don’t think that your servers will automatically understand the importance of getting customers to return.  A lot of your servers are pretty short-sighted.  They are more concerned with today’s tips than they are in building your business.

Many servers have a tendency to see a coupon as a tool that will cause them to get a smaller tip.  As a result they will not give coupon customers the same attention they would give a customer that pays full price.  The result is that the customer will not be made to feel special, and they are less likely to return.

Make sure you are aware of what is going on in your dining room, and that your servers are treating all of your guests the way they deserve to be treated.  Remember, great food alone will not guarantee the success of your restaurant. If you want customers to return, you need to make sure that they feel special.

Have you heard the buzz about newer restaurant marketing programs like Restaurant.com and Groupons.  They’re are the hot new thing, but befoer you rush out to sign your business up, you need to be aware of what you are getting your restaurant into.

These site will set up a page for your restaurant, and your customers can go to that site and purchase coupons that can be used at your restaurant, usually at a big discount.  For instance, Restaurant.com lets your customers buy a $25 coupon for only $10.  Groupons is set up for a $12 for only $6.

The big attraction for smaller restaurant operators is that you can get your brand out to new customers without having to shell out money up front.

There are some big differences in how these programs operate, and that can impact which program you decide to use, or not use.

Restaurant.com

Restaurant.com ha been around for a little while, and they are pretty well established.  You sign with them for a 1-year contract.  They set up a site for your restaurant that includes pictures, your menu, and a link back to your website.  They let you offer several different coupons, all sold to your customers at a discount.  The most popular seems to be the $25 coupon.

The drawback to this program is that all of the money generated by the sale of the coupons goes to Restaurant.com, not to you.  You will make your money by upselling over the $25.

When the customer uses the $25 coupon they are required to purchase a minimum of $35 worth of food.  There is also a built-in 20% gratuity charge that is added on to their bill.

the idea is that you can do a great job serving the customer that they will be regular customers, even without the coupon.  There is a limit on how often a customer can use a Restaurant.com coupon at your restaurant, so they cannot show up every week with a new coupon.

Groupons

A newer program that has been gaining in popularity is Groupons.  This program is a little different because they only run the offer for your restaurant for one day.

The program is built on a large mailing list that daily gets sent the offer of the day.  You decide what your offer is going to be.  For instance, when I ran a Groupon offer for my restaurant we offered a $12 coupon that sold for $6.

Where Groupon differs  from Restaurant.com is that Groupon splits the revenues with you.  When the customer spent their $6, we received half of that money.

Another difference is that there are no limits on how many Groupons a customer can buy, or how often they can use them.  While it states that they can only use one at a time, there is nothing that would prevent them from returning to your restaurant the next day with a new coupon.

When I looked over the purchase records for Groupon I saw that the majority of the people that bought a coupon purchased more than one; some purchased as many as 4 coupons.

For my experience, I found the Restaurant.com program to be more profitable for us.  We have had return customers that came to us originally because of the coupon.  So far, that hasn’t happened with the Groupon customers.

We also saw more profitability with Restaurant.com.  Many of the Groupon people did not spend much above the value of the coupon.  On the other hand, the restaurant.com customers tended to spend more than the $35 minimum.

Both programs have their advantages and disadvantages.  What they do provide is a way to get your name and menu out in front of new customers without haveing to spend any restaurant marketing money up front.

Check them out and see which program works best for your restaurant.

Is your marketing staying true to your vision for your restaurant?

How do you define your restaurant?  Are you beating your competition on price? On service.  On quality of food?  There are a lot of restaurants that see themselves as providing better food and service than their competition.  Their menu prices reflect that they are not willing to compete on price.  They adopt the philosophy that you charge what the food is worth.

That is a great place to be, and it is a philosophy that I adopted with my restaurant.  The problem comes when these restaurants take out advertising.  Suddenly their message changes to “clip our coupon and come eat at bargain prices.”

Don’t get me wrong.  I’m not against coupons.  My wife and I use coupons when we go out, and I have run them for limited marketing campaigns at my restaurant.  It is a great way to get new customers in to try you out.  Just be careful that you are not running them so often that suddenly your entire customer base is the bargain hunters.

The majority of my restaurant marketing is focused on building my brand.  I really hammer home who we are, what we offer, and also let people know about any featured menu items.

Before you submit your next ad, take a look at your restaurants focus and then make sure your marketing message supports your vision for your 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.