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Is Restaurant Email Marketing Dead?

email restaurant marketingThese days you often hear about the imminent “death of email.” Social media junkies and newbie consultants eager to sell some new “fad-of-the-day” marketing idea usually point out that:

  • email marketing doesn’t work as well as it used to
  • social media, texting, mobile apps, etc. are the next big thing and are going to replace email
  • teens (i.e. future adults) don’t use email that much anymore, and once they grow up, they won’t use it either.

These are lies, which, if you choose to believe them, will hurt your business.

What makes them believable is that they are partially true. (By the way, for a lie to work it has to have an element of truth.)

Let’s review each of these statements.

Restaurant Marketing Lie #1: “Email is dead”

It’s true that in many markets, the effectiveness of email marketing has gone down. However, the same can be said about a lot of other marketing tools and methods. The issue is not as much email per se as the fact that we live in an over-communicated society. Anywhere we turn, we are bombarded by advertising messages. Our brain just had to figure out a way to keep us sane by protecting us from the onslaught of marketing information. It subconsciously ignores and automatically discards anything that looks like a marketing message.

Now, as a restaurant owner trying to get your marketing to work, you need to find a way to sneak your marketing message under the radar of your prospect’s brain. The only way to do that is to make your marketing messages NOT look like marketing. There are very few restaurants that know how to be a “stealth marketer.”

Restaurant Marketing Lie #2: Only the “new media” matters now

It’s true that you should always be looking for ways to add new marketing tools arsenal. However, this should not be your starting point. Unless and until you build a proper marketing foundation in the form of a responsive email subscription list, your chances of successfully implementing all these other tools are significantly diminished.

We keep hearing about “new media” replacing “old media” but it rarely happens: Movies didn’t make books obsolete, and TV did not stop people from going to movies. In much the same way, Facebook, SMS texting and mobile apps can and probably should become viable marketing tools for you. However, email is still going to be one of the best, cheapest, most effective ways to reach your customers.

Restaurant Marketing Lie #3: Teenagers don’t do email

I won’t spend much time on this one because it’s just laughable. As soon as today’s teens become tomorrow’s employees and business owners, they will start spending a lot more time in their Inbox and a less time in their Facebook. Just give them time.

 

Restaurant Marketing: To Groupon or not to Groupon?

Groupon coupons for restaurant businessAbout two years ago, a new word was entered out lives: Groupon. This company came seemingly out of nowhere and created an entire new industry. Thousands of coupon junkies are now glued to their computers waiting for the next daily deal to show up that they can share with their friends. Groupon is now arguably the fastest growing company ever promising to reach the $1 billion in sales mark within two years of its history.

Seth Godin, a marketing philosopher and the best-selling author, says that if other people are copying you, you have done something remarkable. By this standard, Groupon is an outstandingly successful company that has over 200 copycats in the United States alone and over 500 worldwide.

Andrew Mason, the founder of Groupon, has created an extremely profitable business model. Groupon sure does know how to make money for themselves.

The big question is, does it or does it not make sense for your restaurant to participate in the “daily deals” campaigns?

Let’s take a look at how “daily deals” campaigns work.

You offer a number of gift certificates redeemable at your restaurant at a significant discount (usually around 50%). The offer is valid only if the target number of certificates sold has been reached. The money your campaign generates is then split between you and the vendor (Groupon or one of their competitors).

An offer like this is designed to bring in a lot of first-time guests who have never heard of and have never visited your restaurant before. Such a campaign can literally put your restaurant business on the map.

As it is usually the case, the positives come with quite a few negatives.

This type of heavy couponing is going to bring in price-conscious customers. Many restaurants who have tried the daily-deals style of marketing report that the guests who show up with a coupon in their hand tend not to buy beyond what the coupon offers. Many don’t bother to read the terms and try to combine the coupon with other deals or discounts you may have going on that day.

Several restaurant owners commented that these guests tend to not tip a lot or not tip at all and are on a lookout for a “gotcha” even though you offer the same food and level of service as you do to non-coupon guests. What’s worse, few of these guests end up coming again.

When you plan a marketing campaign around a daily deal, you have to be prepared. Yes it’s nice to have a lot of new guests to come in and discover your restaurant for the first time. You, however, need to make sure you know how to make money and how to bring these people again after their first visit.

Train your staff on how to work with coupon holders. Add first-time guests to your newsletter, VIP club, birthday club or other type of customer loyalty program you may have in place. Teach your waiters how to capture guests’ contact details table-side. Consider programming your POS system to automatically include the tip into the check.

Offer Groupon deals only on days and hours when your restaurant is slow and only on the items that offer you a high profit contribution margin. Your food cost is probably anywhere from 28 to 36% of the menu price. Given that you only get 25% of the value from Groupon, you are almost guaranteed to lose money on this marketing campaign, even if some of the coupons do not get redeemed.

Remember: Each coupon customer walking in door puts you further in the red unless you do something to drive more add-on and repeat sales.

Simple Tips On How To Grow A Restaurant VIP Club

restaurantvipIt just hurts me to see restaurants to not be able to grow their VIP Club membership as fast as they could. Having experienced a sluggish growth of their membership, or no growth for a long time, many restaurant owners abandon the whole idea of VIP Club. Almost always, prematurely.

Which is sad. Because there is not a faster, easier, or more profitable way to grow restaurant sales than a Restaurant VIP Club.

The following is a short — and by no means complete — list of tips to help you dramatically accelerate the growth of your VIP Club list and of your restaurant business:

1. Offer a clear benefit

Placing a little fishbowl at the cash register is not enough. Sure, some people will drop their business card in there. But don’t expect your guests to line up and trip over themselves at a chance to get on your list. You need to offer a clear benefit to them, the benefit they will realize by joining your VIP Club.

2. Train your staff

Your staff should be doing the sales work for your VIP Club.  Nothing in this world, including your VIP Club, sells by itself.  And your staff will fail, quit, and sabotage your vision unless they believe they can sell what you’re asking them to sell. Keep it simple and leave no room for improvisation. Write a script, rehearse and role-play it until it becomes automatic and natural.

3. Get a buy-in from your staff

We’ve seen restaurants where the staff were refusing to sell the restaurant’s VIP Club to the patrons because they perceived that to be some sort of a “gocha”, a marketing ploy. Your job as a restaurant owner or manager is to educate and inspire your troops and to help them see the good that your patrons gain from belonging to VIP club.

4. Motivate your staff

Why not set up a contest for your waitstaff and have them compete for the most new VIP Club enrollments? Obviously, you can’t have such a competition with no buy-in from your staff in the first place. (See #3 above.)

5. Set up special events

The calendar should be your biggest friend. It gives you virtually endless opportunities to piggy-back and capitalize on some major and not-so-major holidays. As I’m writing this, The Mother’s Day is just around the corner. Do you have anything special happening at your restaurant that week? No? Boo to you!  And if you missed that opportunity, no fear. Because you can always create your own holiday, any day. Go to This Day In History page, pick the month and the date, find an event you could connect to your brand, food, character, heritage or the latest news item related to your restaurant, and create an event around it.

By growing your restaurant’s VIP Club membership, you can reduce the need to advertse, have more control over the type of customers you attract, and dramatically improve the profitability of your restaurant business.  And in order to grow the membership fast, you need to follow a few simple (albeit not necessarily easy) rules.

D.I.Y. Restaurant Marketing Research

We took them to the water.

We wanted to see if they would drink.

The first “beta tester” group of restaurant owners and managers had completed Week 1 of our Instant V.I.P. Clubs program and we were keeping out fingers crossed hoping the aha‘s, the revelations, and the excitement that had come out during the conference call would still be there, a few days later.

Will they actually take all the great information and the tools we’ve given them, and the ideas they have come up by following the process — and implement them in their businesses?

You never know what’s going to happen.

It’s a moment of truth in this game.

Our information is worth exactly as much as they will apply it in their business. Full stop. End of story.

Motivation is transient. Entertainment is worthless. The ooh‘s and the ahh‘s don’t count for anything. Only results do.

The first workbook is all about defining the restaurant marketing target.  Who are your customers? What do they want? What else do they spend money on? What are they passionate about in their lives?

Toni, one of our students, did an outstanding job in the virtual “classroom.” Yet she had some questions left. The kind of questions that nobody can answer for her, except… her.

And she did. Check out this note from her:

This morning there was a scheduling mishap and instead of trying to cover the cashier’s shift I took it as an opportunity to do some research. I found out as much as I possibly could about every customer that walked through the door. I recorded answers to the questions I would ask and observations that I made in my notebook that I kept under the register. I wrote down details like ages, how they looked, what they ordered, where they worked, if they used a coupon, marital status, whether they had families, what kind of hot sauces they like (if any), whether they were first timers or not, how they heard about us, who they were with, whether they were in a hurry, if they ordered to go, if they tipped (server thing), rated their enthusiasm and basically made a judgement weather or not they would be good candidates for our V.I.P. club. I encourage everyone to do something like this and keep a daily log of current customer traits. It was very informative and exact.

Amen, sister. You rock!

Now, is there something that Toni did and that you can’t? Nah, don’t think so. If you are too lazy, or too stubborn, or too “above it” to do what Toni just did, you have no right to be mopey about the state of your restaurant business.

Managing Food Cost Recession Style

Two weeks ago, we talked about the futility of managing food cost by compromising quality, reliability, or supplier relationships. (See Food Cost: This Horse Is Lame. Stop Beating Her, Brother…“)

Here’s the deal: You shouldn’t be paying more for the ingredients than the other guy but you shouldn’t be spending the majority of your time checking prices either. Cost is just a part of management and not a whole other job.

It is easier to grow your revenues by 5%
using the right marketing tactics than it is
to bring your food cost down by the same 5%

I know it’s a stretch but… if you were to knock down your food cost by 5%, what would it mean to you in terms of profits? On a $100K monthly revenue and $30K in food cost, that’s  a respectable $1.5K in new profits. Not bad so far.

Alas, you don’t have to be a betting man to know that inevitably food cost will go up again, wiping out the savings you have worked so hard to create.

On the other hand, when it comes to marketing, you have 2 options:

  1. Get more new guests to check out your food, or
  2. Bring in existing customers more often.

The latter is much easier than the former. One good way to do that could be a V.I.P. Club. Not only can you get them to come in more often, you can get them to bring their friends too.

A V.I.P. Club that increases your revenue by the same 5% will put an extra $3.5K in your pocket — that’s $5.0K in extra revenue minus $1.5K in food to feed all the additional customers!  The best part is, you can do this again and again, month after month. Once a successful marketing method is in place, it works month after month, indefinitely, with little additional effort.

Now, which one would you rather have: A doubtful $1.5K once or a more likely $3.5K over and over again?