Restaurant Marketing Formula

Restaurant marketing is simple. Not easy — just simple.

Yet it may not always seem that way. Flipping through the pages of an industry magazine or listening to some “guru” talk about all the things you need to do every day — on top all the other stuff you’re already doing — can be frustrating.

There is no end to marketing and business management approaches, tricks, and techniques. The worst part is that oftentimes the new trick you learn will conflict with another one that has been working for you just fine. And when that happens, the big question is, where do you start? And most importantly, what actions will give you the biggest bang for the buck?

The answer to these questions is easy to find if you know the Restaurant Marketing Formula:

F + R + M = $$

Anything you do or will ever do to generate more profits in your restaurant business can be described by this simple formula.

F is your first-time guests.

R is your repeat or returning guests.

M is your profit margin.

That’s all there is to it:

F + R + M = $$

Let’s now look at each element in the formula in greater detail.

F: First-Time Guests

Many marketing books and seminars will get you focused on the “F” in the formula. Buying Yellow Pages ads, doing Val-Pack coupons or Internet marketing — all these methods address the “F” in The Formula. While it’s important to keep doing things that help the “F,” this is the hardest point to improve and typically the most expensive one to deal with.

You may make very little profit — or no profit at all — off your first-time guests. And that is okay, as long as you’ve got the other parts of The Formula right.

If you’ve been in business for a little while, chances are you’re getting enough first-time guests coming through your door to build a sustainable business.

R: Returning Guests

These are the people who dine at your restaurant regularly. Getting your existing customers to come more often is a lot easier and far more profitable than trying to find new guests. If you are like most restaurant owners, you have yet to realize the full potential of the R in The Formula. Creating a VIP Club, a membership program or a newsletter are great ways to dramatically improve the “R.”

Here’s the big issue with the “F” and the “R” in The Formula: Before you work on them, you need to get the basic business economics of your restaurant right. Otherwise, increasing the “F” and the “R” will only suck out your profits faster. If you’re losing money on every check, you just can’t “make it up in volume.”

M: Profit Margin

In the restaurant business, profit margins are thin and fragile. Any unwise marketing or business decision can completely wipe out your profits. A small shift in your staffing or food costs can significantly impact the amount of money you make from every check.

“M” is always the right place to start. You need to measure and manage the profit margin of your restaurant business, and you need to do that consistently and regularly.

Here at RestaurantCommando.com, we will provide a lot of tips, ideas, and tools to help you improve your restaurant’s bottom line. We’ll review this formula many times, and show you how to apply it to your business to create more bottom-line restaurant profits.

READY TO TAKE YOUR RESTAURANT BUSINESS SERIOUSLY?

Say "enough's enough" to half-empty dining rooms, humdrum shifts, and wondering which half of your marketing budget was wasted.

73% of teenagers and adults are walking around with a smartphone (iPhone, Android, or Blackberry) in their back pocket. They use is for everything: Playing games, checking emails, texting their friends and ... googling your restaurant's website. If your website is not mobile ready, you're missing out on a lot of walk-ins. Download our Restaurant Commando's Mobile Readiness Checklist.

Watch this quick video about how to set up a Birthday Club that practically runs on an auto-pilot. This is going to be the easiest, fastest money you will ever create in you restaurant business.

About Chief Commando

Well, actually, Chief Commando is two people, Troy Authement and Alex Makarski. Troy and Alex combined their knowledge and experience to help independent restaurant owners and emerging chains create more growth and more profits in their businesses. Together, they provide a unique blend of expertise not available anywhere else in the industry.

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9 Responses to Restaurant Marketing Formula

  1. Joe July 8, 2008 at 9:16 PM #

    We find your website informative… we have just closed our restaurant after 1 1/2 years… we have been told that we are much to ‘safisticated’ for the area that we are in. we are told that the area is a ;meat and potato area and we should accomadate what the people in the area want. not sure what we are going to do… we would like perhaps re organize and re open to what the people want… or maybe we are just ‘grabbing for straws’… we are out of finance’s… so to reorganize..we need cash flow… tough times…..do we listen to the public? maybe we should move on?…. confused and frustrated. Joe

  2. Jacuzzi Suites March 31, 2011 at 8:48 AM #

    There is no easy business..

  3. Alex Makarski April 18, 2011 at 1:11 PM #

    So true…

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