Tag Archives | Restaurant Business

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.

 

Key Numbers To Watch In Your Restaurant Business

restaurant-businessTo build and maintain a successful restaurant business, you need to constantly keep your thumb on its pulse and know how fast its heart is beating. You need to be checking the key numbers.

Obviously, your cash registers and your accounting system will provide you with some very important information. That’s the good news. The bad news is, knowing how you did last week or last month may not be a very good indicator of where your restaurant sales will be next week or next month.

Any type of financial data that you can get from the accounting system is known as “lagging” indicators. These indicators tell you what happened. They won’t tell you much about what is about to happen. However, they are still important.

Here are the most important numbers you need to monitor:

  • Weekly sales, total per week/day and also by the hour (you can then create a simple Excel chart and see weekly and daily peaks and valley and also be able to identify over-staffing & capacity issues)
  • Weekly profit (Many restaurant owners mistaken “gross” for “net” and assume that the more gross you have the more money you make. Well, as the song goes, “it ain’t necessarily so.”)
  • Weekly payroll
  • Product group contributions (the percentages of your total sales attributed to drinks, entrees, appetizers, and desserts)

If you manage your restaurant business by relying just on the lagging indicators, you could be looking for trouble. It’s akin to driving a car by looking in the rear mirror all the time.

If you want to have a way of predicting how your restaurant business is going to do in the near future, you need to implement and track a few “leading” indicators.

  • The total number of VIP Club members
  • The number of new VIP Club members added to the list over the last period
  • The number of Birthday Club members on the list
  • The number of catering sales calls made (if you do catering)

Some of the leading indicators are much harder to measure. They tend to be “soft” and qualitative, rather than “hard” and quantitative like the lagging indicators. After all, how do you measure the morale of your staff and how much they enjoy working at your restaurant? How can you confidently know that this week they were greeting guests more cheerfully than a week ago?

Well, these are certainly harder but not impossible to measure:

  • You can use comment cards and evaluation forms that customers fill out at the request of your staff.
  • You can hire a mystery shopping company or — better yet — turn you best customers into mystery shoppers.
  • You can talk to the staff regularly and fill out a simple form at the end of the day, and then tabulate the results weekly and monthly.

There you have it.

Now, let’s get to work and start keeping track of the important things in your business.

The list of indicators above is very short. However, if you implement just half of these indicators in your restaurant business and consistently track them, you will be in the top 5% of the most successful restaurants.

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?

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.

Higher Menu Prices and Congruency

Menu Prices and IncogruencyA fresh restaurant marketing story for you with a wee bit of a moral in the end.

In order to be able to set and maintain higher menu prices than those of your competition, you need to carefully “choreograph” all elements of your customer’s experience. And in that, no detail is too small.

Onwards to a story.

We just had a nice dinner in San Simeon, California. A tiny village halfway between LA and San Francisco with a population of 400, it consists of a gift shop and maybe a dozen of hotels and restaurants on both sides of Hwy 1.

Given the geographic location (middle of nowhere), we didn’t expect much from the seafood restaurant attached to the hotel where we stayed for the night. Least of all did we expect their menu to demand a more-than-respectable $21+ average per entree.

Yet that’s exactly what it did.

A family with 2 kids at the table next to us, not able to cope with the sticker shock, got up noisily and hurried out the door in search of a more affordable option. (Kudos to the Maitre D’ who was prompt, vocal, and sincere in thanking them for coming and making it appear to the other guests as if he was parting with his best friends.)

We stayed. Part too lazy to move our buns, part curious to see how the kitchen would live up to a relatively high bar they’d set for themselves.

The restaurant was about half-full. The day being Monday, and many of the kids being back at school, that looked like a good night.

The waiter did his part well all the way, from offering the drinks to suggesting the specials, to becoming invisible when we didn’t need him, to re-appearing when we did. The food was worth every dollar the menu demanded for it, and possibly more.

Looks like we had a winner.

Except for one small but nagging detail.

Which was the busgirl (the person making the least money of all the people at the store that night) who answered every “thank you” with a dewy-eyed “uhuh”.

Now, since when does “uhuh” mean “you’re welcome”?

I found myself thinking about how well everything that night was orchestrated to make my experience congruent with the menu and to make me happy to part with the money.

And also thinking about how every lumpish “uhuh” thrown at me negated everything good that had happened to that point, and reminded of how far away from the city we were.

That is called incongruency and it is your biggest obstacle to your ability to increase and maintain higher check averages.

When it comes to restaurant marketing, little things aren’t little anymore. They are everything.

Three questions for you to ponder (your restaurant business will soar once you find answers to these):

  • How should you “choreograph” your customers’ experience?
  • How do you train your waitstaff now and how should you really train them?
  • How can you ensure they don’t bring their hapless social habits into your restaurant?