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

Recently I viewed a new restaurant marketing plan for an independent restaurant doing about a million dollars in sales. It was nicely packaged, well formatted and clearly took the writer several hours of hard work to put together. The plan was laced with industry facts and figures from the previous year and projections for the current year. The effort showed in packaging - except what counted! It was like being very hungry — a beautiful plate of food arrives, but the little sliver of meat was covered with decoration and hardly satisfying when found.

When creating and reading a marketing plan, there is one little word that needs to be bouncing around in your head. It is a simple little three letter word - HOW?

You can have great research with numbers to back up all your conclusions, examples of new media and great logic, but if you can’t state precisely HOW you are going to meet your goals your restaurant plan will fail.

A common statement in a restaurant marketing may be “to increase carry out sales” by “advertising our quick service, convenient parking and user friendly packaging”. Sounds great! My mind screams “HOW”? Who are you going to advertise to? Where are you going to advertise? Who will you reach? Who are you targeting? What are the profiles of the targeted market? How will you motivate them to action?

And then……. the next line ….. “another area of weakness in sales is our pre-dinner period from three to five PM”.

Where is the HOW? The writer takes you through this great setup, only to entice you into a great pitfall. There is no “meat” to the plan. Identifying weaknesses and strengths is relatively easy. Saying you are going to “advertise” something is even easier, but actually putting your message in the potential customer’s hands in a format that will inspire and motivate them isn’t so easy.

Some of the best elements of a restaurant marketing plan I have seen have been on a cocktail napkin, on the back of a brochure or torn from an airline magazine page covered with scribbles and notes. Marketing plans can be elegant, full of facts and figures, uniquely created and insightful. However, if the plan doesn’t give you a vision of the exact person(s) you are going to reach and the action that person is going to take along with the result for your restaurant, you might as well go buy the latest great mystery novel.

Creating a restaurant marketing plan isn’t as simple as it seems when using only profit and loss statements as a guide. It’s easy to say sales are down, therefore, we need to increase sales. It is even easier to come up with some new advertising campaign, a few service improvements and some social marketing gimmick and call that a marketing plan for your restaurant. It’s too easy - and rarely works.

Restaurant marketing plans need to be based on needs, history, strengths, weaknesses, competition, demographics and common sense. Except for the common sense aspect, the balance of the elements for restaurant marketing is derived from numbers behind the numbers. For instance, when and where are sales down? Is it at lunch or some other daypart? Have sales fallen on take out business? Are food sales down and beverage sales up? Are appetizers selling well and entrees lagging?

Identifying areas and departmentalizing each part of your business is necessary to design a targeted marketing plan.

The second step to developing a marketing plan is to know who you need to reach in order to boost sales. Advertising blasts to newspapers, television and other media is costly and unproductive if the people you need to reach either don’t read newspapers, tune out ads or aren’t inspired by dozens of other restaurants doing the same thing as you are doing. One of the latest fad trends is the great hype for all forms of digital social media such as Facebook, Twitter, YouTube and similar tools. Are your customers using those sites? Do you know or are you just hopping on the wagon because advertising has you convinced this is a panacea for restaurants?

Reaching potential restaurant guests is almost never a singular directional communication tool. Choosing the right tool(s) is a matter of time, cost and potential results. Crunching numbers becomes an actuarial art much like insurance companies use to determine the cost of insurance policies. They factor in the volume of sales versus the risks being insured and the cost of the losses normally paid for similar policies. Restaurant marketing factors the cost of the tool, potential return and the judgment if the risk/reward equation makes sense.

Balanced and productive marketing plans require the little numbers behind the big numbers to be effective. A P&L statement alone is not enough.

While helping husband and wife restaurant owners in Australia, I had this question:

On several occasions we have made it clear to our staff that “Chef meals” and “shift meals” are not part of the compensation package. Yet, daily we see employees carrying out food which is given to them by our chef. Let me say that we have a great Chef, but the economy is making it difficult to make ends meet. How do we stop this pilfering before it shuts us down?

To be a little more specific, the restaurant was purchased two years ago by this novice couple with no industry experience. They saw a profitable operation go south along with the rest of the casual dining segment. The question above was one of a series of issues they were requesting help with - it was the easiest to answer, but the most difficult for them to execute.

My answer:

Let me see if I can put this question in perspective;

• You have a “great” chef helping people steal from you.
• These thefts are keeping you from paying bills.
• Not paying bills will put you out of business.
• Now your “great” chef will have no job and you will have lost your investment.

Stealing, in good times or bad is still theft. Great chefs don’t steal or facilitate others to carry off food. For everything you see, I can wager there is twice as much you aren’t seeing. If the answer isn’t clear, we need to get you out of the restaurant business!

Running a restaurant is no picnic and making difficult decisions comes with territory. There are no blurring lines when it comes to many issues - theft is clearly at the top of the list. If you see grazing, unauthorized food packages, missing pieces of dessert, excessive liquor pours, inventory shortages - you can ignore it, call it something else, make excuses and have other names for it, but it is theft. It never gets better by keeping thieves on the payroll under ANY circumstances.

OK, this is a role reversal. I am the one asking questions about the value of Facebook, YouTube, MySpace and a half dozen other similar sites. For an independent casual to upscale restaurant owner, how can you find or justify the hours it takes to post, monitor, respond and keep fresh your content?

I can think of a dozen better, less time consuming and less risky ways to market a restaurant than any of the viral options being hyped by the experts (self pronounced experts!). Here are a few questions for those who are embarking on this time eating media frenzy with scary downsides;

• Wouldn’t your hours be better spent training staff to improve service? This will bring back more customers.
• Do you have a big email marketing structure in place? Are you building a no risk email program with few man hours required?
• Are you involved with the community and the other groups where your customers will see you?
• Do you have a perfect menu, exceptional creative food and spotless restaurant? This is what brings guests back on a long term basis.
• Have you done a poll of your guests to see exactly what percentage you can reach on these social websites and how many you need to monitor?

Perhaps the most frequent inquiry I get is something along the lines of, “I have this idea for opening a new restaurant, ..(idea comes spewing out)……….what would you suggest?”. Or some variation of, “What is the secret to being a success in an industry that sees 80% or 90% failure rate for new start up restaurants?”. As promised in a previous post, here are my Top Ten Tips for Opening a Successful Restaurant.

1. Clearly understand the risks, headaches, financial burden, stress and impact on your personal life and family before you begin. It may be your dream that you must pursue, but don’t expect the rest of the world to stop while you try to make your mark. There will be more than 50,000 other people doing the same thing this year. Only about 5000 of them will be around in five years.
2. Plan to succeed. The restaurant bushiness is like any other venture when it comes to mapping out your strategy, plans and goals. You can do it on the back of a bar napkin or in a 50 page booklet, but know where you are going, how much you can spend and exactly what you expect the rewards to be.
3. Don’t start with your fabulous food idea. Few people open a restaurant with bad food and even fewer fail because of the food. Start with your customer experience. What will be so different about entering your restaurant than any other? Assume someone duplicates your idea across the street within thirty days of opening - why will customers choose your restaurant instead of its twin across the street? If you can’t spell out the differences, the customers won’t be able to either! This process is the beginning of a marketing plan that must detail how you are going to fill those empty chairs everyday. Your marketing plan should be at least half of your overall business plan. If you have any thought that just serving great food is enough, you are destined to become a statistic.
4. Before you begin, make sure you understand how restaurants work. If you have never worked in a restaurant, become a volunteer at someone else’s food operation for a period of time. If you have the experience, become a student of the business. Read, question, research and retain good ideas and practices for now and the future. Make note of everything customers don’t like - read restaurant reviews, not from critics, but from guests who post their experiences online.
5. Once you have created your plan, share it with family, friends, business acquaintances and as many other restaurateurs as possible. Take in criticism, input and other ideas. Remember, it takes a lot of different kinds of people to get butts in your seats who will frequent your establishment.

If you haven’t visited the previous post about the pitfalls of couponing (March 21, Restaurant Coupons - Be Cautious) AND the related comments, you may want to read the post and the comments. Notwithstanding the article and reader comments, coupons can be a primary marketing tool if, clearly and decidedly, you choose to become a bargain store. The best analogy are retail businesses like Big Lots, Odd Lots and even computer stores like Comp USA who has morphed itself into a discount no frills price based and coupon driven computer outlet. They were on the bankruptcy list until they made a marketing direction change to survive. The jury is still out, but the trend is better than their last few years as a retail store.

In the restaurant business, their are many examples of coupon based QSR’s and fast casual operations that exist and thrive on coupons and price based marketing as their “value” statement. Let’s not be fooled by Domino’s - they exist because they are quick and cheap - not because they have a delicious pizza! They have thrived because they pin pointed a place they could build a niche into an empire. What do you think would happen if they raised their price (and quality) to the fresh made local pizzeria’s prices. They would quickly succumb due to their inability to execute a new “value” statement.

Most independent restaurants have a long term philosophy of pride in their product first, which generally means quality is a huge percentage of their “value” statement. You can be a steak house serving a no-roll, select, choice or prime product. Prices for a 12 oz. ribeye can range from $10.99 to to over $30. How do you think the restaurant selling the $10.99 no-roll product is going to drive traffic? You got it - coupons and low price advertising!

So there is a place for restaurant coupons - probably just not your place.

Next post - one of the comments referenced above asked about my best tips for starting a new restaurant. I’ll give you my best ten tips in the next post.

If you were to believe the pundits and restaurant marketing “experts”, coupons are the way to drive traffic to your restaurant and solve all your problems. Don’t believe it if you are the average independent full service restaurant. There are successful, although costly and addictive, methods that some food service operations survive based on couponing, giveaways and incentives to buy. For instance many pizza operators (particularly chains) heavily utilize coupons to motivate a guest to buy their product. Once they start and a big promotion pays off (they think) with dozens of redemption’s, there is no way to measure the negative effects on their business.

Coupons are difficult to measure because:

• You can’t count the ones used by existing customers who otherwise would have paid full price without the discount. That bottom line effect is not what you want.
• The customer who responds to a coupon purely for the low price will never be a loyal guest - which should be your goal. This type of customer will move to the next cheaper promotion from another restaurant.
• Once you raise awareness that you CAN sell your product for less, how do you convince people that your food is worth more in the future?
• What does there regular use of coupons say about your brand? Does this type of marketing lead to the impression that you are a “discount” restaurant not to be taken seriously?

Restaurateurs spend many hours confined within the walls of their restaurant locations. We become slaves to our masters, the customer. We also become stale like day old bread - still good for some things, but the creative juices are harder to get flowing. Traveling, or visiting multiple restaurants locally, gives us the opportunity to get the mind open for a rush of new ideas.

Rarely have I eaten a dish in a restaurant that I wanted to copy. On the other hand, rarely have I visited another restaurant without coming away with flavor combinations that worked, presentations that caught my eye and customer service thoughts that were good (or bad).

On a trip last week to a major metropolitan area for a few days, I came away with;

• A sauce idea for chipotle sweet and spicy mustard. The flavors worked.
• While consuming a better than average pizza at a local popular pub I detected a smokey flavor that lead me to believe the pizzas were cooked in a wood fired oven. I came to find out they only had a standard deck oven, but used a smoked provolone cheese as part of the ingredients. That gave me the idea for an oven braised brisket sandwich that would be topped with the smoked provolone cheese that could add a new dimension of flavor.
• While consuming a horrible hotel breakfast, there was a yogurt sauce comprised of frozen blueberries and a touch of maple flavoring that topped fresh fruit. It worked!
• A house salad that was served in a giant martini glass tuned upside down at the table onto a plate. It had everyone oohing and awing at the sight.
• In a virtual zoo of restaurants along a mile stretch of commercial roadway, there had to be 60 restaurants, independents and every national chain imaginable. Visiting a couple of the independents that were exceptionally busy was my goal. They were surviving quite well in the midst of one of the most competitive markets I have seen - with ongoing construction that will lead to more potential competitive conditions. I wanted to know why they were full on a snowy weekday night. An un-scientific, quick survey showed three things. One, the two independents I visited both had food that matched the demographic for the area. Two, service was on target, friendly and not scripted like many chains. Three, the atmosphere was cozy and locally themed versus the clinical look of many chains.
• Two other notes I made in this beehive of restaurants was that half empty parking lots at five big name Italian chains in this mile long stretch showed that over building in any market can be a silly venture. Finally, the burger wars were evident. The big names were there including stalwarts McDonalds, Burger King, Wendy’s, White Castle, Rally’s, Sonic and expanding chains like Five Guy’s, Red Robin, Steak n’ Shake, Dairy Queen and WhataBurger. Nestled in between all of the big names were a couple of local favorites that seemed to be able to find their niche with long lines that exceeded the chains during the dinner hour. The second note I made was the number of sub shops that were tucked in every corner of the area. There were two Subways, Quizno’s, Grinders, Blimpie’s and a Firehouse Sub Shop being constructed. The mental note I made was the potential for a local sub shop to produce a better product than any of the cookie cutter franchises. I have yet to see a sub franchise be able to compete with a good product produced by an independent in a local market for subs.

Prior to the recession, restaurant guests seemed to be a happy lot. They ventured into just about any food purveyor that opened their doors partly for exploration, curiosity and culinary adventure. In the last two years wallets closed up like the strings on a beggar’s purse. Consumers with less discretionary dollars to spend wanted value and “comfort”.

If you look the word comfort up in the dictionary, the common definitions include to “soothe, console, reassure, support, encourage and make physically comfortable”. That seems to sum up the average diner who walks into a full service restaurant in today’s new world. The term comfort has to be your goal for the purposes of restaurant marketing.

In the restaurant world we have bantered around the word comfort primarily to describe a particular type of food that made people feel good or brought back memories from earlier days. In fact most restaurants who changed their menu philosophy in the last year or two will tell you that “comfort” foods sell better than they ever have. That is one blessing this financial hurricane has made clear - you can be creative using lower center of the plate proteins and give the guest what they want at the same time.

However, comfort must extend beyond the plate to get more frequent visits from your guests and keep the buzz about your restaurant going. To extend your comfort factor consider these tips;

• Are you offering a comfortable atmosphere that matches your concept and guest’s expectations? Is your restaurant too loud, too quiet, too bright, too dark, too fancy, too casual?
• Physical comforts are just as important. Are your chairs too hard, too high, too soft? Is the temperature too cold, too warm? Do you smell of pleasant food odors or stale carpets and bleach cleaned floors?
• There is comforting service standards to consider. The old days of hard hitting up-selling professed by out of work “consultants” is over. You and your servers need to be less formal and more personal with the guest. Names are important. Smiles are like gold. Haste is unforgiving. Manager visits are expected. Greetings on entering and exiting should be part of every staff member’s vocabulary. The days of the pompous waiter in the tux are over.
• Value IS comfort. People want to know they are making good buying decisions. That applies to buying a car or a meal. Highlight the things that make the guest’s experience at your restaurant a value. Can you rattle those things off right now - this minute? Is it portions, prices, entertainment, friendly servers, exceptional chef, fun, easy to park and enter, quick service? Embed those comforting aspects of your restaurant in your server’s mind, your POS materials and advertising as part of your marketing plan.

Who hasn’t been to a mall? On a recent day with my grandchildren, a much dreaded trip to get something for one of them, I again found myself not only in the mall, but drawn to the food court by two things. The first thing was the tugs on my hand by my grandson and the second was the smell of cinnamon buns that was the motivation for the younger generation.

While sitting in the mall, there was another memory. The young Chinese lady who was passing out bite size pieces of bourbon chicken. The flavors were immediately recalled into my memory. Sweet, charred and savory bites of chopped chicken pieces. My real interest was the people who were in line to order food at the Chinese eatery’s location at 11 AM in the morning. The other booths were serving stragglers as they wandered through the colorful area, while the bourbon chicken samples were doing the trick for the Asian inspired venue. Too early for lunch and too late for breakfast, but they were doing business.

Over the years I recalled the number of changes that had occurred for mall food court vendors, but the Chinese eatery had prospered. Taking a slow time and building sales for the future. You may not be hungry now or be in enough of a hurry not to be able to stop, but that lingering taste will be remembered for a long time to come.

When a restaurant has a couple of servers faking trying to stay busy and a kitchen just biding their time until lunch or dinner service begins, what are you passing out? A quick restaurant marketing lesson for the future - like tomorrow!