5 Key Principles Of Restaurant Marketing

1. Marketing has to pay for itself (it’s never an expense, it’s an investment)

restaurant-marketingThe whole idea of a “marketing budget” is wrong. Most restaurants define it as a percentage of their sales. Wrong, wrong, wrong!

If you had a reliable and proven way of investing $20 and getting back $30, how many of these $20 bills would you invest? I hope you answered, “All the $20 bills I could get my hands on. And also all the $20 bills I could borrow!”

Good! Then why would you cap your marketing at some — largely arbitrary — number?

A-ha! You probably do that because you are NOT sure if a $20 bill invested in your restaurant marketing can reliably and predictably bring you back $30 or $15 or any money at all.

And if that’s the case, you need to radically change the way you approach restaurant marketing. There is always a way to measure and know how much money each marketing campaign is generating for you.

2. If it ain’t broken, break it (to give a way to the new and better)

In many locales, we see restaurant chains move in and independents wane. And it is believed that this happens because the chains have more money in their corporate coffers and because they get better discounts from the distributors.

These are largely not true. On both counts (and I’ll leave this at that now and cover this topic in the future articles.)

However, the main reason chains are generally more successful than independent restaurant is because they always break what’s not broken. They constantly test new menu items, tweak their pricing, adjust their internal processes and marketing campaigns. And once they find something that works extremely well in one locale, they roll it out to all of the other stores.

Most independents we know abhor change. Aside from new paint on the walls every 5-7 years and the new menu covers every 3-5 years, most independent restaurants are frozen in time. Which brings us to the next point.

3. “The world doesn’t need another restaurant” (and it’s your job to prove them wrong!)

I first heard this phrase from Bill Marvin (a.k.a. The Restaurant Doctor). Maybe he’s the one who coined it, or maybe he’s heard from someone else, but this is the one that you need to make your mantra.

I have two very big questions for you:

  1. What makes your restaurant unique and special?
  2. Why should I, a customer, come to your restaurant versus all the other options I have (including doing nothing)?

If you can’t answer these questions well, the world certainly can do without YOUR restaurant. Think about it.

4. Restaurant business ain’t easy (however it can be simple if you follow the right formula)

Do you have an operations manual? If not, why not? How often do you and your staff refer to it?

For how long can you afford not to be AT your restaurant? Is that one day? A week? What about a month?

If your business depends on your being there all the time, you don’t have a business. That simple.  What you have is a job. And nobody wants to buy a job, especially yours.

5. The biggest asset in business is relationships (and it’s better than cash because it can be turned into cash over and over again)

You may be in love with the equipment you have in the kitchen. Or with the building you’re in. Or with all the furniture and fixtures that you have purchased and installed. Or maybe you love your recipe book and the beautiful menus that your graphics designer created for you.

This is all good. However, all that has very little to do with the real value of your business.

What you need to be in love with is your customers. You also need to be a freak about maintaining an up-to-date list with all their contact information as well as birthdays and other important dates in their lives.

It’s the new era in restaurant business, the era of Relationship Marketing. We have arrived. If you have been slow in getting on the bandwagon, you need to do that now.

Running Restaurants: Preparing for 2009

Congratulations!

restaurantThe fact that you are a reader of this site, puts you in the top 20% of restaurateurs who are not satisfied with the status quo and are constantly looking for new ways to offer greater value to customers, make better food, provide greater experience, and create a bigger legacy in their restaurant business.

We are proud to have you here with us. Thank you for coming back to Restaurant Commando for restaurant business and marketing advice.

Are we the only people in this business?

Of course not.

There are many great teachers out there that make it their mission in life to help more restaurants become successful.

There is no shortage of charlatans and magic-bean dealers either . And sometimes it isn’t easy to tell the latter from the former.

Running Restaurants is a resource we trust. Heck, we even contributed some of our content to them in the past! And it’s about time you discovered them too.

This week they have a special offer that is not to be missed. See it for yourself at  http://www.RunningRestaurants.com.

If you were wondering, we are not making a red cent recommending these guys. No kickbacks, no commissions, and no “under the table” deals.

The reason we are getting behind this offer is glaringly simple: We want to make sure that you, the restaurant owner or manager on a quest to more restaurant knowledge, can get your hands on some critical information. This new knowledge may make your 2009 a whole lot better than 2008 was (even if it was pretty good to begin with).

You’ll notice many additional bonuses for joining Running Restaurants within the next few days, some of them from us. Jaime, the guy behind the website, also confided to us on the phone that has more surprise goodies waiting for you on the other side.

If you’re reading this message after December 17, 2008, you’ve missed out on the uber-special deal and the bonuses. Lest that stop you. If you’re serious about creating more profits and more success in your restaurant, you need to take a close look at Running Restaurants.

Marketing A Restaurant In December (So As It’d Stay Busy Through January)

restaurant-lineYou know how it typically goes…

You get a swarm of people before the holidays. They come in, they celebrate the jolly festivities, they eat and drink and swipe their credit cards.

Then the dreadful January rolls in. Customers retreat to their caves and roll a big stone to block the entrance. They are gone and there are none of them in sight.

None. Zero. Zilch. Nil. Nada.

So the usual deal for a restaurant owner has been this: Make enough money when the celebration is going on and the business is brisk, and have enough of it stashed away in the bank account to keep the lights on when things are slow.

This has been the approach for years.

Alas, it just may not work this time. With the economy the way it is, everyone is bracing for a “soft” holiday season. You don’t have to be clairvoyant to know that this January is about to be one of the worst — or possibly THE worst — that one has ever seen.

That is, the one who is unprepared.

It certainly doesn’t have to be that way for you and your restaurant.

So what could you do now to make sure that most of the customers that visit your restaurant this month come back in the New Year? And what could start bringing them back more often than in the past?

Well, you could make your food a bit better (and you should). Is that going to do the trick? Unlikely.

You could improve your service (and you should). Just don’t expect to see a dramatic and an instantaneous increase in your food sales.

So what can it be?

There are a number of things you can do. Let’s cover just one today very briefly.

This tactic is called “The Secret Envelope” or “The Santa Envelope” and has been used extremely successfully by many a restaurant.

Here’s how it works.

You give your guests a sealed enveloped with a prize inside. They can’t open the envelope themselves (and if they do, they forfeit the prize). They have to bring it back to your restaurant in January and have your staff open it.

The prizes that you create for this contest can as small as a free coffee / desert / appetizer to something quite large like a $500 or even a $1,000 gift certificate. (Obviously, there is going to be only one super-big prize and a whole bunch of smaller ones.)

If you do it right, you will have a stampede of customers in January. We’ve seen this happen time and again.

We will be walking you through the details of this approach at a free restaurant marketing seminar in Toronto one week from now. (If the above link doesn’t open, just go to http://www.RestaurantAcademy.com and find the event there.)

We’ll be covering this and two other powerful tactics to help you make more money in your restaurant business now and next year.

Obama, Restaurant Sales, And Change

obamaOn Tuesday, as soon as we wrapped up the second day of the Restaurant Profit Bootcamp in Austin, TX, restaurant owners and managers in attendance had left the building to join millions of Americans at the voting poles. That night, Sen. Barack Hussein Obama emerged as a winner of the big race by promising to bring about the change.

The change is sure needed.

Yet when it comes to your restaurant business, it is not to come from the White House. It is irresponsible and even juvenile to expect an external force to bring the change unto your business. To give you something that is yours to create.

The change is not going to just “happen”.

The change will be a result of each business’ meticulous, deliberate and bold action taken to make that business better every day.

By selling one more plate.

By adding one more customer to the database.

By knocking on one more door and introducing themselves to one more family in the community or one more business in the neighborhood.

By making one more marketing campaign pay for itself and then some.

By making one more birthday party super-special.

By training one more server to be observant and forthcoming.

By making their kitchen another notch more efficient.

By making their menu another notch more effective.

By making their restrooms another notch cleaner.

By giving a chance of a minimum-wage job to a kid so he could prove the world has given up on him too soon.

By knocking one more customer’s socks off and making their day.

Which is pretty much the list of things the attendees of our Bootcamp came to learn, to share, and to embrace. And now they are back in their restaurants, making the change happen.

And I salute them for that.

Stupid Restaurant Marketing: Shift Happens

Unless you’ve spent the last year or so in a cave, you know there are some major economic changes underway that are making restaurant business — or almost any business for that matter — a lot harder. Shift happens, you know.

One way where this shift is apparent is TV. Did you notice how many infomercial-type ads have now replaced the old stupid commercials with dancing pop cans and talking dogs? And we are not even talking Shopping Channel or QVC anymore. This is “normal” TV, like CNN or Fox.

Apparently, very few restaurants are catching on. Here’s just one example that is oh-so-typical.

Last weekend, my son played in a hockey tournament in London, Ontario. The management of the sports complex hosting the tournament has figured out a way to generate some revenue by offering sponsoring opportunities to local businesses.

Great idea.

Bad execution. On the part of advertisers.

This is a picture of the banner for a local pizzeria.

Tony's Pizza

I bet Tony (or whoever owns that pizza business nowadays) spent a pretty penny to get that rink named after them and to put a beautiful banner up. Here’s the issue: I fail to see how they can even hope to get any restaurant marketing results this investment.

Let’s imagine I’m at the rink, I notice the banner and I decide to get a pizza. This is not an inconceivable thing to happen if I’m a parent who has just spent the last 3 hours after a long workday at a cold hockey rink watching a bunch of young Wayne Gretzkys skate around and try to get that puck with a little stick. Cooking is the last thing I’d want to do tonight and pizza would be a Godsend.

Well, there are at least several problems that I wouldn’t be able to overcome as a potential Tony’s customer:

  • Since there is no phone number mentioned on the banner, how am I to call them and place an order?
  • There is no indication of where this place is located either. An address would be very helpful, or better yet, a small map to tell me if that pizzeria is on my way home. None of that is present.
  • How about the business hours? Some hockey practices extend into a very late evening. I wouldn’t want to veer away far from my route and come to the place only to see the “Closed” sign on the door.
  • And, oh, wouldn’t it be nice to know about the delivery option? After all, what can be better than calling the pizza while your kid is changing up and pulling into your drive way just as your pizza has arrived?
  • And last (which should probably be first), why should I order from Tony and not some other national and heavily-advertised pizza brand whose jingle and the phone number are engraved on every kid’s brain? (Nope, sorry, being in business since 1961 — or even 438 B.C. is not it. Nor is the claim of being “famous”.)

If you spend any money on restaurant marketing, make sure you give this marketing a chance to pay you back in new and repeat business.

Restaurant owners like to complain about all the things that they have tried and that didn’t work. If you listen to that chorus, nothing ever works. Advertising doesn’t work. Rink sponsorships don’t work. Newspaper ads don’t, and radio doesn’t either, to say nothing of the Yellow Pages. This doesn’t work, that doesn’t work.

And almost invariably, when you take a closer look, you see a poorly executed ad that is a variation of Tony’s Pizza banner, committing all the same restaurant marketing mistakes.

I’m sure Tony (or his successors) are totally convinced by now that local sports sponsorships don’t work. Yet this problem is of their own making. Their business is going to suffer. They will probably withdraw their backing next season. And everyone is going to lose:

  1. Tony’s because they’ll have fewer customers.
  2. The rink because they will lose a sponsor.
  3. Parents who will have to cook now on a night when it’s the last thing they’d rather do.
  4. The kids who’d rather have a pizza.

It’s time to get serious about your restaurant marketing. Almost any advertising media can be made to work. Just like any advertising media can lose you a lot of money if used recklessly.

Review your restaurant advertising and put yourself into your customers’ shoes. Are you making it too hard for them to give you their money?

Recession-Proof Restaurant Marketing Plan (Musings On How To Drive Restaurant Sales When Food Is A Little Hard To Sell)

restaurant-ownerWhenever you talk to a restaurant owner these days, it’s almost invariably a story of how hard it is to be in the restaurant business. And after a while, it may seem like restaurateurs have been dealt the worst possible deal.

Yet I’m here to say (and this may offend some restaurant owners reading this) that us the foodservice folks had it relatively easy when it comes to restaurant marketing, in comparison to many other industries.

(Please read on before you get all pissy with me; I promise to give you something very profound today, a restaurant marketing approach nobody ever shared with you.)

Let’s do a little experiment. (You can do it in your head. Or you’re welcome to try it out in real life.)

Imagine: You’re at a party and someone is asking what you do. You have to scream the answer to be heard over the loud music. And as you open your mouth, the band suddenly stops playing and everybody gets to hear it as you yell out:

“I SELL IN-SU-RANCE!”

Whoops… You probably have never seen the room clear so fast.

A very similar reaction could be expected if you decided to pose as a used car salesperson, realtor, mortgage broker, or lawyer.

Now, what if your answer was, “I run a restaurant”?

People would react to this a lot more favorably. Some would actually approach you to introduce themselves and ask about the type of cuisine you offer, the hours of operation, and the location of your restaurant.

What does this all have to do with restaurant marketing?

See, many professionals had a very hard time selling their services even in a good economy. Your food has suddenly become harder to sell. Well, wouldn’t it make sense to:

Learn from the best who know how to sell what’s hard to sell!

If you observe the most successful insurance agents, used car salespeople, realtors, mortgage brokers and lawyers, you’ll notice that all of them do the following three things:

  1. They hustle to get new business;
  2. They invest in the relationships with their clients and prospects;
  3. They implement formal and deliberate referral systems.

New times require new approaches. And the biggest breakthroughs are going to come from “stealing” successful marketing methods from outside the restaurant business.

You could be saying now, “But most restaurants don’t do this type of marketing!”

Heck, yeah!

That’s the point.

Little Johnny, Restaurant Marketing, and Fed Bailout Package

Little Johnny, Restaurant Marketing, and Fed BailoutOur educational system does a poor job of preparing Little Johnny to become a successful restaurant owner.

Little Johnny gets a good mark every time he gives a memorized answer (the only possible “correct” answer) to the teacher’s question.

Little Johnny doesn’t get a good mark for asking the right question in the first place. The kind of question that may have more than one correct answer. Or the kind that cannot be answered today (but it’s essential that you keep asking it because if you do, the answer will one day find you — and that will be the day of a major breakthrough in your business).

Henry from Nova Scotia is asking,

“How am I going to compete in this economy?”

This is a very good question.

Because the question that most other restaurant owners are asking right now is, “How is my restaurant going to survive in this economy?”

And it is my utter hope that the question Henry is really asking is, “What can I do today to win in this economy?”

You see, much as a sports team that plays “not to lose” has absolutely no chance of winning, a restaurant that is just trying to survive is certain to go under.

You gotta play to win!

The restaurants that are going to win are the ones that demonstrate the following traits:

  • They work on the basics every day and, no matter how slightly, they consistently outdo their competition.
  • They treat their regular customers as kings and queens, create good reasons for them to come back, and have a process in place of turning first-time guests into regulars.
  • They have created several reliable and measurable ways of attracting new restaurant customers.

And since we’re talking economy here, it’s important to understand what this whole Fed Bailout deal really means to you as a restaurant owner.

Here’s the skinny:

There are issues in the economy that have not been created overnight and it’s going to take time to get them undone. Most likely, we are yet to see the worst of it. What the Bailout Package did was prevented the really bad things from happening to us really fast. It gave us more time to fix our businesses so as we could come out on top, no matter what the future holds for us.

Here’s what Napoleon Hill wrote in the 1930’s:

THE “depression” was a blessing in disguise. It reduced the whole world to a new starting point that gives every one a new opportunity.

And this could be your new opportunity.

Little Johnny asks straight questions that everyone else finds awkward or is afraid to ask. Maybe it’s time you did a Little Johnny on your restaurant business:

  • “How can this crisis be an opportunity for me and my restaurant business?”
  • “What can I do right now to insulate my restaurant business and customers from the competition?”
  • “How can I make my restaurant truly unique and special?”

See how this works?

Next time, I am going to explain why you don’t have to be 54 times better than the next restaurant to make 54 times the money they do.

Don’t Be A Restaurant Owner

Restaurant Owner vs Strategic Business OwnerSteve in Florida is writing…

Hello, I am based in Miami and have been following the <type of concept> that seems prevalent in CA and almost non-existent here in South FL. I am a business person who is seeking to open such an establishment … I do not have experience in the food industry but would be “passionate” about starting this kind of concept here in FL. With this said, would you happen to have any advice in starting things up (other than the usual stuff such as money, etc.)… I’m looking for investors yet but more importantly… looking for some “wisdom” from veterans of the biz who have been in the “trenches”.

Thanks,

Steve

Okay, Steve. Congratulations on having a dream that is big and a passion for the restaurant business that is contagious.

As for the restaurant business “wisdom” piece, here’s a little something I want you to take to heart. (And it applies equally to those who are just starting out and to those who have been running a restaurant for decades.)

Here it is:

Don’t be a restaurant owner.

Be a Strategic Business Owner.

I could — and one day I will — write an entire book on this subject. Until then, here’s the “skinny” for you, the 9 traits that make your restaurant success more probable (those in the right column):

Restaurant Owner Strategic Business Owner
Tactical Strategic
Spends most of the time working “in” the business Spends most of the time working “on” the business
Assumes better food and service will cause customers to beat a path to his door Has a marketing plan in place and creates special reasons for customers to come back
Thinks “everyone” needs his food and “everybody” should want it Has a clear picture of “ideal customer” and knows exactly what these people want and don’t want
Considers the equipment in the kitchen, the furniture in the dining room, and the building the restaurant is in the biggest assets his restaurant has Knows that the customer list is his business’ biggest asset, is a freak about adding more customers to it all the time, and follows up with them relentlessly
Can’t see any other way to make more profits in his restaurant other than sell more food His mind is open to creative ways of adding more value-added goods and services that customers happily and eagerly buy
Is focused on building a “transactional” income Is focused on building a “relationship” income
Tries to win in the marketing game all by himself Is always on a lookout for profitable joint venture opportunities with other local businesses
Owns a job Owns a real business

Some of these may appear cryptic. Many may seem to fly in the face of the “restaurant marketing” common sense.

So they are and so they do.

We’ll expand on these in our future newsletters. Until then, print out this list and post it in a place where you’ll see it often. The more you read these, the more sense they will make to you. And the better you understand them, the greater your chances will be of creating a successful and profitable restaurant business.

Marketing A Restaurant In A Slow Economy (part deux)

kid-thinkingThis is the second article in the series on how to market a restaurant during the economic slow-down and what a successful concept like Olive Garden does to grow when almost everybody else is shrinking. Loosely based on the information revealed in their Q1 2009 conference call.

4. Expand into new markets.

Olive Garden has seen a lot of response from their Hispanic ads targeted at the new, fast-growing, and dynamic market. This endeavor also includes Hispanic menus, and (since there was no mentioning of that in the conference call, I’m extrapolating) Hispanic staff, effectively positioning Olive Garden to Hispanic clientele as “their” place to eat out.

There could be at least two possible takeaways for you, related to restaurant marketing:

a) The Hispanic market is less saturated by other advertisers but is as hungry as any other. You may get a better bang for your marketing dollars by expanding into it.

b) Too many businesses in general, and restaurants in particular, are too stubborn to try to find a new market. The correct approach is to tackle one market at a time. Once you have won over one market, regroup and stage a crusade on another one. Examples of markets include particular occupations, age groups, hobbyists and enthusiasts. For instance, if you’ve built a successful VIP Club for golfers, you can create an additional VIP Club for children who take up golf.

5. When consumers tighten their purse strings, they go to fewer restaurants but frequent their favorite place almost as often as before.

This is a very important pattern to observe and is a direct result of the “winner takes it all” rule in action. In other words, you don’t have to win by a mile — you just have to win.

A restaurant that provides a slightly better food, a slightly better service, and does a slightly better job of staying in touch with their customers will do disproportionately better than their competition. And given that most restaurants don’t bother to revamp their boring food, never get around to properly train their staff, and have no concept of investing into a relationship with their customers, you just need to do a few things right (not perfect, just a teeny weenie bit better than the next guy) to do well while your competition is crashing and burning.

6. (I know I promised 5 “secrets”. This one is a bonus lesson in restaurant marketing, so stop complaining.) Here it is: Be ready to capture more customers when your competition throws in the towel and turns off the lights.

Well, this particular observation didn’t come from the conference call per se. Clarence Otis (Darden’s CEO) appeared on Jim Cramer’s “Mad Money” the night before the conference call and referenced the shutdowns of Bennigan’s.

Turns out, several of the Olive Garden stores are located next to the now-defunct Bennigan’s and saw a “pick up” of consumer traffic.

When a restaurant closes in your locale, be ready to meet new customers. By “be ready,” I mean “have the tools and processes in place to turn these first-timers into regulars, and regulars into raving fans.” Otherwise your euphoria will be extremely short-lived.

Marketing A Restaurant During The Economic Slow-Down: 5 Surprising Restaurant Marketing Lessons From Olive Garden (Darden Restaurants)

Restaurant Marketing Bootcamp

A quick story today with a critical take-away for your restaurant business, and an important announcement at the end.

Onwards to a story…

Last week I decided to pop in on the Darden Restaurants shareholder conference call. When a company like this is sharing what they do and why, and what they see going on in the market place, I sit up and listen. Nobody gets to be a 170,000-employee company by sheer luck. There is always a reason and a method.

Apparently, I wasn’t the only one listening to that call (manufactured laughter goes here). The next morning food-service & restaurant publications were super-prompt to announce that Darden was “finally” experiencing a slowdown because of the state of the economy (big deal).

And they entirely missed the point that I found the most important.

Yes, pretty much all of Darden’s concepts were down by about 3.7%, which is on par with the overall foodservice industry index. But… Olive Garden (one of Darden’s concepts) was doing extremely well.

Olive Garden grew 5% compared to the same quarter last year!

Not a single analyst noted this very remarkable fact — Olive Garden is doing well. In fact, so well compared to the rest of the industry, it deserves a look to understand what specifically they do and how they get to be so successful.

So here’s a list of 5 things that you should do in your restaurant to replicate the success they are experiencing (loosely based on the information of that conference call, with my interpretation):

1. When the economy is slow, step up your marketing.

When the cold winds of the economic slowdown come to the city, most businesses respond by canceling their advertising. They crawl into the shell and try to wait it out, hoping for a miracle.

Smart restaurant owners do the reverse. They ramp up their marketing: It’s so much easier to get heard in the market when everybody else is hiding. Smart restaurant owners also know better than to equate marketing to advertising: There are marketing methods that are more effective and less costly than advertising.

2. Stay on their minds.

Olive Garden uses creative advertising to remind their customers they are still here. They manage to stay at the forefront of their customers’ minds via TV ads.

As much as this approach could be good for a large company like Darden, however, such a stunt could be suicidal for a small restaurant: Running image ads on TV is a costly and arguably the least effective way to advertise. It is called “branding,” or more specifically, “macro-branding.”

The other, less expensive, and more targeted way to stay on your customers’ minds is called “micro-branding.” This includes a variety of ways to “touch” them, via email newsletters, event announcements, greeting cards, phone messages, and printed newsletters. Many of these tools are either free or inexpensive. And they are relatively easy to track. There is no excuse not to use them.

3. Create reasons for them to come in again and again.

Olive Garden keeps coming up with new items and specials, and they synchronize promotions with the release of the new menu item. You can do the same. And it’s easy to inform your list about new menu items. That is, if you have a list (see strategy #2 above).

Also, you can create many more reasons for your customers to come back — many of which may have nothing to do with the food (e.g. special events and “happenings”).

I’ll cover two more lessons in a separate post, tomorrow.

Now, the announcement.

We are running a 2-day intensive Restaurant Profit Bootcamp in Austin, Texas, on October 6 & 7 — see www.RestaurantProfitBootcamp.com. We can only accommodate 28 people (that’s 30, as allowed by the fire code, minus the two instructors), and 6 seats are gone as I’m writing this.

If you’re serious about becoming a true Restaurant Commando and receive a complete arsenal of tools to deal with any hostile market situation, you can’t afford to miss The Bootcamp.