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.