A friend and colleague who opened a new restaurant about 6 months before we did called to chat about a contractor who used us as a reference. As we discussed the year and the new restaurants, he was clear that his results weren’t what he expected. The conversation evolved to marketing programs that have and haven’t worked. My commitment to email restaurant marketing was discussed, but he was questioning the value.
At the time of my phone communication, I didn’t have any firm numbers in front of me and could only voice my general feeling about his objections which included:
- The fact that you cannot know that everyone gets the email.
- The time and effort to collect the email addresses.
- The returns seemed small.
It is true that an email marketing program may take a little planning and effort to get started, but so does any other worthwhile restaurant marketing tool. In terms of cost, the email services we have researched can cost from $35 per month up to $100 per month depending on the level of your participation and the services you desire. There are significant differences between the online companies offering restaurant specific programs.
Here are the numbers and benefits based on some actual results in our 15 months of utilizing this long term strategy.
- Benefit One -If you have 2000 names on your email list, you can expect about 700 people to open your email that you can positively identify. Many other people may open the email up, but the numbers of verifiable opens are about 35%. What other form of marketing can you prove that 700 people saw your message for under $100 per month?
- Benefit Two - In our case, we offer a free appetizer with any entree when they join the email club. We follow that up during the year with a free dinner on their birthday. Again using the assumption of a database of 2000 names, we get about 30 people per month who use the appetizer gift and about 50 people per month who use the birthday gift each month. The real benefit is that each of the people who redeem their gifts are in a party that averages 3 people per redemption. That means there are 240 people per month guaranteed coming into your restaurant every month - all for under $100 in actual costs. (Keep in mind your list is constantly growing.)
- Benefit Three -In the operation that uses this program, the average check is $19.50 per person. That means in any given month we are sure to get $4600 worth of business before the month can even begin.
- Benefit Four- At any given time we can send an email to boost the sales for a day, week or month. Email is a great way to introduce a new menu, new item or promote a holiday or special eevent. An email takes anywhere from ten minutes to two hours to produce depending on what message you are sending (holiday reminder, newsletter, menu introduction, etc.). You know 700 people are going to read your email if you have 2000 names on your list.
In terms of numbers, if you grow your list to 4000 people, the monthly hard measured returns would be $9200 before the month started. Again, this result is from a monthly investment of under $100. How about 6000 names, now you have $13,800 in sales before you do anything else for the month (that’s $165,600 annually!) - again, for less than $100 per month.
Email restaurant marketing is a valuable tool if used properly and judiciously.
If you are starting a new restaurant or looking for a sure bet - place it on this numbers game. Get started now, nothing happens without a beginning.
How can anyone ever pay more than $5 for a sub at Subway? Will consumers pay more than a $1 for a double burger at McDonalds? Will the food at Applebee’s ever be worth more than $20 for two people? New studies show the answer may be an emphatic NO!
Heavy discounting on solid menu items may actually permanently harm the big brands. When the recession begins to unwind for the restaurant industry, there are indications chains that merely lowered prices to fill seats can expect consumers to balk at paying higher prices for the foreseeable future. As the jobs picture brightens and unemployment returns to acceptable levels, that doesn’t mean diners will forgo bargains. By that time the public will have been conditioned to look for those same chains to continue bargains and low prices.
On the other hand, independent restaurants who became creative and worked hard to offer new menu items that were pocketbook friendly, but seen as a value to the consumer will emerge stronger. There will not be the consumer backlash toward price increases the chains will be forced to impose. Heavily franchised brands like Subway, McDonald’s, Applebee’s and all the rest have shown decent financials during the recession. So who is paying the price for heavy discounting? The franchisees. The owners of the franchises continue to pay their royalties based on sales volume to the mother corporation. Low prices drive traffic, not profit at the franchise level.
Independents who brought back comfort foods, worked with suppliers to find lower cost proteins and shed costs to survive, will not suffer the same consumer rebellion many marketing experts are predicting for the discounters. The message here is clear. Consumers have certain expectations when it comes to value. Once you establish a value for a product you can’t say, oh, we were just kidding, it’s worth much more!
The restaurateur who suffered through the recession by working hard to be inventive will be rewarded with loyalty as consumer discretionary spending on restaurant visits returns to normal.
Florida is a unique market. There are tourist seasons, weather issues, part-time residents and a constant fluctuation of peaks and valleys that naturally occur. While challenging, the predictability over a period of time allows adjustments to marketing plans. Other markets have their quirks, but I can’t think of any with so many bumps and potholes in the sales trend charts.
After August 15th annually, the Florida consumer seems to hide in a cool cave and the travelers seem to stay home to get the kids back to school and avoid Florida’s heat and sometimes stormy weather. Operating a restaurant, new or established, in this environment means planning ahead of the downturn. Procrastination leads to predictable results - bad numbers!
Several weeks ago we had a Managers meeting for all three restaurants. The predictable August downturn was discussed. Actions for for cutting costs and marketing were emphasized and guidelines were established. Subsequent plans went into each individual restaurant with varying results.
In the case of a new restaurant you have no history to balance the summertime influence on sales. We thought the peaks and valleys would be a little flatter with a demographic less reliant on tourism. That assumption coupled with procrastination on getting a plan implemented for this seasonal sales drop shows up fast as business drops about 25% almost (predictably) overnight. The managers are left with empty seats and scrambling attempts to get their much put off marketing into action.
Unfortunately, lack of consistent (almost daily) marketing forethought causes the obvious delay in results. Plans that were well thought out and creatively designed are worthless if not implemented when needed. In simple terms, a sales boost needed specifically in the last two weeks of August and whole month of September cannot be started in the middle of August. Marketing takes time and patience. Nothing happens overnight unless you are offering free food like some of the struggling chains.
We made a mistake in this new venue of waiting too long to start implementing a plan. Now we must wait for results and suffer the consequences. A miscue management won’t make again.
As most restaurateurs do, I visit new restaurants that move into our operating area. I am particularly partial to independents who are following their dream. The challenges of opening a new restaurant are great, but I know its rewarding to see a new face walk in the door in the early stages.
In this particular case the new restaurant is facing steep odds. They are serving Cajun style PO Boys and sides in mainly a quick take out format. They are located on a main thoroughfare in a suburban city center. There is some walk by trade. The footprint is small, about 600 square feet. Their overhead should be relatively low.
The food I ordered sampled four different items. The quality was above average. Service was a little slow even though I was the only customer they had right after they opened at 11 AM one morning.
As most restaurant owners do, I silently watched as my food was prepared and viewed the equipment, atmosphere and process to prepare the order. I can’t help myself from assessing the survival chances of this new sub shop. It’s a bad habit, but the mind has a will of its own that can’t be denied.
My assessment is that they will serve a product we typically call “good food”. I am sure the new owners consider this assessment accurate (what new restaurant owner doesn’t?). Unfortunately, they ignored some basic key elements to give themselves a chance to make it in an industry that has an 80 or 90 percent failure rate. Their weaknesses include:
- Parking. They have about ten spaces shared along with a half dozen other tenants along a busy street. Any other parking available to them was a block away or across a four lane busy highway. Remember, this is a carry out operation with only two tables and eight seats.
- Service cycle. My 15-20 minute wait went quickly due to natural instincts wanting to assess everything. However, a second trip would not be so forgiving. Also, how would they fare if there were two or three customers at the same time that morning. People go to carry out locations for speed and convenience. They will have neither if they expect enough volume to grow sales.
- While the restaurant was sparkling clean and new, the ambiance was non-existent. They are trying to present a Cajun theme, but a couple of pictures on the wall doesn’t do the concept justice. There are so many inexpensive options for a fun look using back bayou decor. Waiting for “good food” alone won’t keep the customer occupied.
- Other little factors included a small selection of cold drinks, few retail items off the menu and limited description of the food on the menu.
Can they change and recover from these negative elements? Most are quickly correctable. The one that is impossible to correct without some major construction in the whole area is parking. You can’t overcome a bad location. It makes no difference how good your food is or how quick you serve people. If they can’t get to you, they will go down the street to McDonalds when speed and convenience takes priority over superior food.
I hope I am wrong. Time will tell.
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With the barrage of marketing terms such as viral marketing, vertical marketing, social marketing, mobile marketing and many more being tossed around in the media, restaurateurs can forget the key goal of any solid marketing plan - building a brand. While technology allows us to reach different segments of our demographic, the overall purpose is to make guests and potential customers more aware of your name.
Envision a huge community cocktail party within a couple miles of your restaurant. When the subject of food and restaurants comes up, will your name be mentioned? Will the comments be positive? Are there people at the party that have never heard of you? If someone asks for a recommendation for a good breakfast, lunch or dinner will your restaurant be on the list for your day part?
Building brand awareness for an independent restaurant is more than running a few ads in the local newspaper. It means getting involved with the community and the people who live, work, go to school and play in your area. Advertising only reaches a small part of the people who make up the average marketing area.
Branding is an “old” term that sometimes get gets lost in all the media hoopla about the Internet, mobile technology and digital capabilities. Here are some old fashion ways that still work most effectively;
- Join the local Chamber(s) of Commerce and other business organizations. Become a participating member of other social groups catering to the business community like Rotary, Sertoma, Lions Club, etc.
- Perhaps sponsor a sports team like a softball, little league or football team.
- If you are an effective speaker, offer your services as a food expert on current trends, product news or latest health and safety issues. Many local groups are regularly looking for speakers to complete their regular meeting.
- What is your hobby? Sailing, fishing, old cars, art, photography - whatever it is make your passion a part of your restaurant marketing by joining local groups that share your interest.
- Use local vendors. Where do you have your dry cleaning done? Who cuts your hair? Where do you buy your gas? How about that local hardware store? Even doctors, dentists and optometrists can be a source of business reciprocation and cross marketing opportunities.
While mass media seems to be the choice for most restaurants, they miss out on the most effective marketing tool that will never be replaced - personal contact.
