Starting, Owning and Marketing A Restaurant Blog|Starting and Owning a Restaurant - Construction, Planning, Marketing, Opening and Managing a New Restaurant

Out come the proponents of sites like Facebook, Twitter, YouTube, FourSquare and dozens of others. Consultants, site managers, digital tool developers and others sent me mail about their success stories on networking sites and mobile marketing. Stop - I get it!

Nothing has changed the original focus of the articles about building a presence on these sites. However, those who wrote me had one thing in common - they ALL gave away something to get butts in seats! That is my point. How much marketing skill and talent does it take to give a free pizza away, when you buy another at regular price. That is merely offering your product at 50% off. How much effort does it take to offer FREE food on Tuesdays? That will bring you business whether you are on Facebook, Twitter or drop coupons from an airplane!

The real issue for restaurants is centered around building long term relationships and customer loyalty programs from the networking platform of social media. Is it worth the time, effort and commitment as opposed to other marketing tools - can each restaurant afford the luxury of having hours available to monitor and build their presence? Each restaurant operator must set their priorities. Do you have a website and email marketing program? If not, your restaurant needs to start these tools long before embarking on the time it takes to reach a small percentage of your guests who MAY  use social networking.

It’s all about numbers. Eighty percent of the households in America have Internet access, yet only 30% have used social networking. I’ll take my shot at the 80% first, then go after the 30% - that is the point!

In a few weeks I will document the results of our entrance into the social media platform So far, it has consumed a lot of time to research the right way to enter that media and plan the steps.

In the previous post the discussion centered on the use of social networking as a marketing tool for restaurants. Here the issue is relevance of the major two players - Facebook and Twitter. Once again, I emphasize that social media marketing is only a small part of your overall marketing efforts.

Facebook is a place where people go to post personal information and build warm and fuzzy networks of friends and family. It constantly amazes me the amount of personal detail that appears in a public forum. It is like writing a diary that appears on a billboard for any users to see.

Businesses will find Facebook tolerant of their presence, but remarkably unorganized to get the most benefits for restaurant owners. The search feature within Facebook is relevant to the particular user as opposed to overall relevance. For instance, if you search for “McDonalds” you will get anything in your user history that relates to a particular McDonalds, anything from your friends and even friends of friends, before general results for the restaurant chain’s corporate page. The presumption is made you want something from your network, rather than a general search based on popularity throughout the system.

Twitter is much friendlier for business. In fact, they have a tutorial that gives a lot of detail and ideas based on case histories. The tutorial link is here. Facebook is much more difficult to navigate to helpful insight. Their FAQ’s are scattered and requires some creative search term thinking to get to the answers you may need.

Facebook is much larger than Twitter with over 500 million users worldwide. Twitter is about half that. If you are narrowing your efforts down to just one network, Facebook is where you will find more of your customers than Twitter. Our own study between three of our restaurants found that 30% of our guests who actively use the Internet use Facebook and Twitter was second at 15%.

Before you make a mad dash to Facebook, you need to consider a couple of things. How are you planning to use this social media and what kind of restaurant are you?

If I were building a long term customer loyalty program, Facebook is definitely the choice. On the other hand, if I were the type of restaurant that drives traffic through coupons, offers and pricing, Twitter is a better choice. If I had a hip lounge and entertainment venue, again Twitter would be my choice. If I owned a sub shop that had better food and lower prices than Subway and Quizno’s, I would be all over Twitter.

Twitter is about what is happening now - this moment, this evening and tomorrow. Users expect quick responses and immediate results. Posts are limited to 140 characters and once you learn the “lingo” you can get you deals and nightly entertainment messages out fast - with quick results.

On the other hand, Facebook is about building networks of information, discussions, photos and conversations. Users don’t expect answers is less than a few hours like Twitter. They also want a place to easily find more information such as your upcoming events, details about food, facts about your operation and promotions that have a longer life than just a matter of a day or week.

If you can only afford the time for monitoring and posting to one social network, choose according to your planned usage to get the most results. Remember, both require time, effort and work to be effective.

Special Note about Mobile Marketing: Restaurants who are just now getting into social networking on the Internet need not worry about mobile marketing. Phones are becoming so technically improved that they can handle and reformat almost anything on the Internet. Sites like Facebook and Twitter also are giving the users the ability to choose how they want to receive data - normal or in a mobile format.

With all the hoopla surrounding sites like Facebook, Twitter, Foursquare, MySpace, YouTube and all the rest, it is easy to see why many restaurants are joining the rush to engage their customers on these sites. But hold on there restaurant owner or manager - you have some planning to do!

It’s easy for a restaurant to just jump on to your favorite social media site and create an identity and page. Too easy! The temptation to rush in is easy, quick and less time consuming, but you can create a time eating back biting monster if you don’t position your image correctly and understand there are a few negatives to consider and mitigate such as:

• Time consumption - just how much time can you afford to spend on a site or multiple sites.
• Who is going to monitor and respond to your customer’s input. How frequently? Caution is urged to make certain your responses are reasonably quick, proper and considered carefully. For a disastrous example check this link out!
• What are your goals? Just creating a page on a media site without planning will look unprofessional and amateurish.

Free time is a battle for any restaurateur. While social media marketing is one way to engage a portion of your customers, it is not the marketing panacea that replaces all other methods of growing your restaurant. Social media marketing is another arrow in your quiver of arrows that target your guests. One key element of most social media marketing sites is the ability to quickly respond to guests, if needed. That means monitoring the site(s) daily. Part of your plan has to be who is going to maintain the particular site, how frequently and how is this going to be done?

Social media marketing has to be used as a portion of your overall Internet presence. It is no more important than a website, blog, email marketing and other valuable tools that comprise the the total plan. Keep in mind that, depending on the study you read, all of your customers aren’t involved with the the Internet. The estimates vary, but a reasonable guess for customers participation in various Internet activities would be;

• 80% are connected to the ‘Net and 75% have an active email address.
• 60% have viewed or participated in one or more of the social media sites.
• 30% have a page or have a very active presence in one of the social media sites.

As part of your planning, these estimates must be weighed against the time, cost, effort and ability of your restaurant to become actively engaged with various opportunities on the ‘Net. Equally important is the demographic makeup of your customers. As a general statement, the younger the average age of your guests, the more they are involved with Internet activities that include social (and mobile) opportunities to connect with them. Older guests have a lower percentage of time spent in front of a computer according to most recent studies.

Your Internet and social media marketing plan must be in written form and communicated to your staff. Employees can be your best method to get customers engaged with your marketing plan. Get planning, get engaged - it can be fun and rewarding, but not without understanding the risk/reward relationship of restaurants who join the rush to social media marketing.

The Independent restaurateur can anticipate many more months of challenges from uncontrollable, but predictable forces accumulating for small businesses. The Health Care Bill, unprecedented national debt, immigration reform and financial reform will cost us money in many ways. These pending national issues will bring forth regulations, bureaucratic paperwork, increases in the form of fees and charges (taxes) and capital gains increases (more taxes) in the coming months and years.

Waiting to implement cost saving principles will mean delaying the savings you will need when the government (at all levels) tries to find new ways to generate funding for larger government and debt from policies of the past two years.

Cost saving actions go beyond beating up food suppliers for the lowest possible pricing. Here are a few ideas to get you started:

• Unfortunately, waste is a common element of our food costs. A server orders the wrong item, the kitchen burns the hamburger bun, the last few ounces of the soup of the day gets thrown away, dated milk gets thrown out and many more circumstances are deductible and chargeable items from income. They need documented and applied on a daily basis.
• Are you fully deducting and documenting your expenses for travel to pick up that case of lettuce you ran out of? Or the trips to the bank for deposits, operating cash and change? There are many ways to write off the entire cost of operating a vehicle either through mileage or company leased vehicles that may be owned by you.
• Even utilities seem to be increasing as fast as all other expenses on you profit and lost statement. Did you know there are many ways to get free usage and cost saving surveys from the utility companies? There are also other contract sources for power, gas and other utilities available in most parts of the country. Call each company and ask for all their programs.
• How much are you spending on advertising? Is it time to bring more of your restaurant marketing to a lower cost targeted program that has measurable results? Is it time to re-think how you reach new, old and recurring guests without costly publications that may reach only a small part of your audience?
• When was the last time you checked with other companies for all of your insurance needs? Liability, casualty and unemployment compensation insurance seems to go up until you bid out the business on an annual basis.

Finally, when was the last time you went through every single line item on your P&L statement and thought through what you are paying, to whom and comparative analysis to other suppliers?

All of these ideas may add up to a small fraction of your overall expenditure, but the restaurant business is a game of pennies more than a game of dollars today!

Clearly there is a national “fad” with hamburgers. It seems the fascination with big, juicy hunks of fried ground beef topped with some kind of cheese is trendy. Celebrity chefs are capitalizing on the phenomenon with burger boutiques and the big chains are bucking the health police by offering larger more complex burgers.

Question - Is this bovine craze more about the consumer’s limited pocketbook rather than some new taste? I think so.

The recession has definitely changed the way people are spending their hard earned dollars for eating out in restaurants. Everyone knows there is a limitation on the cost of a hamburger, no matter how big or how good it is. So walking into a trendy burger joint doesn’t mean you will have to shell out $20 to have something you really like that is satisfying. The customer knows they won’t have to search the menu to find a reasonably priced entree and they don’t feel like they are missing the overall restaurant experience by waiting in a drive through line under the golden arches.

Since my childhood days in the sixties, hamburgers have been a staple in the American diet. Good for you or not, few people haven’t longed for that greasy ground concoction topped with anything that tickles your taste buds. Hamburgers aren’t new, but consumer restaurant discretionary spending limitations are new. The combination of the burger and spending conservatively has fueled the biggest restaurant growth segment in history that is totally focused on one simple sandwich.

The lessons for restaurant owners in this economy are simple. Rich or poor, old or young, people want comfort, satisfaction and simplicity in their food choices. They are taking less risks and their willingness to venture a few extra bucks on an unknown is very limited. Where does your menu stack up based on these observations?

It never fails. Every time I travel for a brief vacation, I can’t get away from the restaurant business. You have to eat. My mind, eyes and ears tend to observe the events related to the restaurant business unfolding as you eat and drink.

In this case we were in Key west for a few days with a group of friends. While making some general observations like the lack of crowds due to the BP disaster in the northern Gulf, my perusal of the many menus we encountered were, as a general statement, very much the same. Little creativity. Fried shrimp, nachos, tacos and local fish prepared as you like were all ok. The high end restaurants like the old A & B Lobster House, Virgilios (La Trattoria) and Louie’s Backyard are all still great restaurants, but the casual dining restaurants who come and go have a strong element of sameness that you cannot escape.

The thing that stood out the most, however, was the lack of service standards found in this tourist dependent area. Here they have a perception that the customers will only be around for a day or two, so exceptional guest experiences are hard to find. For those of us that have to perform for the same people potentially three or four times a week, the bar is raised for acceptable customer care.

It is a lesson to watch the staff of dozens of restaurants go about their business with little guest attention and universally poor attitudes. In many places sales suffer from lack of attention and indifference. Each year we visit the keys there are dozens of restaurants that are closed, have changed hands and clearly in decline. I always wonder if they could survive by focusing more attention to their service. Would guests come back more than once during their stay? Would guests recommend their experience to other travelers? Could they build a LONG TERM marketing strategy by being one of the small minority of hospitality establishments that pay more attention to the individual guests rather than just the high volume of visitors who just wander in their doors.

Service IS part of marketing. I think captive markets like hotels, tourist centers and high volume walk-in locations can be a reminder for those of us who build customers one at a time through the formation of relationships.

Most restaurateurs go to many food shows year after year. They face the same poorly cooked unsavory looking samples under heat lamps at booths spread across a convention hall floor. Except for the occasional Vienna hot dog or the fresh baked brownie, most of the food doesn’t warrant more than filling an open space in your stomach at that given time.

Look a little deeper and you find yourself immersed in thousands of dollars of valuble information and food trends that may delight customers. Companies like ConAgra, Kraft, Nestle and many others spend millions of dollars tracking food trends, composing flavors, finding new ingredients and matching cost saving techniques to create menu items. The fact is most of the creations can easily be recreated by chefs and cooks in the average restaurant. Sure, there are labor factors to be considered, but the research and is worth experimentation.

Conceptually, it is the underlying data that caused the new item to be conceived and ultimately produced and packaged for the industry. Rarely do the giants of the industry blindly introduce a new product without confidence in the changing tastes of the consumers.

When visiting food shows try looking at new products only. You may spot items (and trends) that inspire ideas that can be translated into menu items. A particular product may not be very appealing, but the research and flavor profiles may be worth a second glance for your restaurant’s creative approach to a fresh menu.

A recent customer survey determined that about 30% of our guests used Facebook. Admittedly, the number was larger than I expected. Incorrect assumptions lead me to think that the social media market was more fractured and our clientele was in a demographic area that had a higher age group than average. While building a strategy for Facebook marketing, we must remember that social media has not proven itself to a valuable tool for developing new business, but has produced some productive support for customer loyalty.

Basic restaurant marketing cannot be replaced by the single focus on any individual marketing program. There are three components to restaurant marketing;

1. Communication of your message to the guest and prospective customer.
2. Selling your product once the customer is within your four walls.
3. Delivery of your product in a manner that meets or exceeds the guest’s expectations.

While social media may assist in one or more steps, this advertising method cannot meet the guest’s expectations once they have entered you establishment. Restaurants who rely on only the Internet digital opportunities fail to reach their full potential.

Stopping at a birthday celebration reminded me of how some easily meet their restaurant’s customers’ expectations. It was a Wednesday evening at 6 PM. There was standing room only for about 100 guests at a little burger joint in a suburb of a major metropolitan area. Inside seating was about 30 and the balance was in a gravel filled yard.

The menu, chicken wings and greasy (but good) hamburgers. The cost -  50 cents for the wings and $3.50 for hamburgers much better than any fast food. $1 draft beers all day, everyday! A one-man band played to the crowd. How could anyone complain? About what?

This is what I call meeting your guest’s expectations to the point they couldn’t have anything to complain about. You got exactly what the place looked like you would get! It works for them. Is it working for you?

The reference for my musing is an article written by a news reporter who thinks she has found the secret to restaurant success. If she was right, she could retire in about two weeks a very wealthy reporter. View her article at this link. 

Her point is well taken, that details make the difference between successful good restaurant and a failed restaurant. I wish it were that simple. I have seen horrible examples of bad restaurants make it very nicely due to factors such as a high volume, low competition location or a captive market that has little choice for food options (some hotels used to be a notorious example). On the other hand, I have sadly seen hard working people start a restaurant, with all the details perfect, great food and exceptional service lose their investment very quickly due to mis-matching demographics and food.

There is no exact formula. However, here are a few tips for the ingredients in priority for a successful restaurant formula:

• Location- You must be seen conveniently.
• Food- It doesn’t have to be great, but it HAS to be consistent and meet the guests’ expectations.
• Service - Must have servers and employees who care and can share your vision. You can teach someone how to serve, but you can’t teach them how to care.
• Cash - You must grow to stay alive. It takes money to start and profits to keep growing.
• Details- The reporter referenced above is right about details. Cleanliness, comfort and atmosphere must please the guest. No compromises.
• Sustainable Consistency. Sound redundant? It’s not. A lot of restaurants set standards that are extremely high only to find out that hey are impossible to meet over time.
• Marketing Understanding for Restaurants - You must know how to reach your audience and potential guests with the right message. This takes time and study.
• Just a Little Luck - Some of the worst gamblers in the world can drop their first coin in a slot machine and become multi-millionaires in seconds. The odds on that are about a billion to one - that is about the same in the restaurant industry. However, a little luck occasionally may keep you in the game.

The formula for restaurant success is like creating a recipe for baking great chocolate chip cookies. I can give you the basic eight ingredients. What are the chances you will know the exact quantities of each ingredient without careful study and experimentation? Become a student. Read all you can, spend time in restaurants and then put your formula together.