Monthly Archives: April 2008
Marketing is maybe the most important function of running a restaurant. It is also the function that most restaurateurs have the least skill at. That’s why I consider having “no marketing skill” one of the biggest mistakes restaurants make. You can read about the others here: The biggest mistakes restaurants make, and why they have a high failure rate .
In the spirit of helping restaurant and food services owners and managers build their business, I’m going to start a series of posts with marketing tips for restaurants.
My first marketing tip, trick, gimmick, offer, or whatever else you want to call it, involves bounce back offers to new customers. As you may have read in my other posts, collecting customer contact information is the single most important marketing practice you can undertake. Marketing to people who have already been to your restaurant gives you a better return per marketing dollar than any other practice. I bring this up because the marketing tip I’m going to share requires you to collect and store contact information for your existing customers to work.
New customers represent a huge opportunity for growth for your restaurant. These customers now know what your food is like, what type of value you offer, and where you are located. They have demonstrated that getting to your restaurant is not such a huge hassle that they won’t bother coming, and hopefully you’ve done a good job giving them good food and service at a price they feel comfortable with.
By collecting these new customer’s contact information, you are presented with the opportunity to turn them into regular customers, the back bone of every good food concept. Gaining one new regular customer could mean a $1000 per year or more sales increase for you, depending on your concept. If it’s a couple, or they have children or friends they dine with on a regular basis, it’s exponentially more. Since these are all new sales, turning this new customer into a regular customer means growth for you.
The marketing tip I’m about to share with you explains one way to try and get these new customers back into your restaurant, with friends. Here’s a couple reasons why this tactic helps turn these new customers into regulars.
- Bringing someone back as soon as possible increases your chances of making a permanent impression. They are more likely to remember the server that helped them, how great the food was, and how good a value you offer.
- Getting them to bring friends makes them feel more at ease and comfortable. People are more likely to make a restaurant their “hangout” if their friends are there too. By encouraging these new customers to bring guests, you help build the environment necessary to make them comfortable.
Here’s the tip:
Send out direct mail “bounce back” offers to new customers. Give them a reason to come back as soon as possible, with friends. An offer I recommend is to give away a free appetizer, dessert or speciality beverage to each guest they bring with them. Use the mail piece as an opportunity to say “thank you”, and to entice them back with as many people as you can get them to bring.
Don’t offer just any old appetizer or dessert. Offer a particular one so you can use it’s name or description to make the offer sound more enticing. A “free Chocolate Avalance dessert” sounds a lot better than a “free dessert from our menu”. Use this opportunity to promote your signature items. If you don’t have signature items, get some. People need a reason to come to you instead of your competition. A signature item should be something in a particular category, dessert for example, that you make in-house, that is better than the other items in that category. This item should cost more, and contribute more gross profit dollars than your other items, while still being priced low for the incredible quality of the product. This is easily achieved, as your competition probably overcharges for their expensive items because they are worried about “cost percentages” instead of “gross profit dollars”. This presents a great opportunity for you to be the best value on the highest quality product. By using this product in your offer, it not only seems like a more impressive offer, but you are also promoting your highest gross profit menu item in that category. You’re killing two birds with one stone!
Use this type of a product, and the following verbage to create an attractive bounce back offer for your new customers:
Thank you for visiting our restaurant! We’re so happy to have made some new friends and patrons!
We’d love to be introduced to your other friends too! If you come back with this card before May 31st, we’ll buy you and your friends our delicious Chocolate Avalanche dessert, just for introducing them!
The reflex of the average restaurateur is to start asking, “How should I limit the offer?”, “Should there be a maximum number of desserts I give away?”, or “Shouldn’t I have a minimum purchase?”.
The answer to all those questions is “NO”! The only limitation you should have on a promotional offer is the expiration date, because it is there to build urgency and make people ‘act now’ (unless that particular offer is specifically designed to build non-peak time sales). If you have a good offer that allows you to make money and the customer to experience a good value, then you should want as many people as possible to take advantage of it. If you’re just giving stuff away and not making money, it’s not a good offer. The more people your new customers bring with them, the more new customers you have to try and turn into regular customers. Even if they bring existing customers with them, they’re likely getting those people into your restaurant more than they would have come in on their own, and the more friends that come to the restaurant, the more likely they will become regulars.
The only caveate I would throw in, would be to warn against using discounts as your promotional offer. There is nothing special about a discount. The only thing a discount serves to do, is to skew your customers perception of your value. It’s easy for them to see what type of value they would have gotten if they paid the same and didn’t receive the free dessert or appetizer, but allowing them to pay less with a percentage or dollar discount gives them bad information to make a value judgment on. This type of promotion also tends to attract “coupon clippers”, people that only go out to eat where they have a coupon. This type of diner isn’t likely to come back to your restaurant until the next coupon comes out. You can’t build your business on couponing unless you are pricing a “20%” discount into every menu item, like pizza chains do.
Armed with this marketing tip, I think you’ll find not only that your ability to turn new customers into regular customers increases, but that you’ll gain more new customers without having to do the searching yourself. Let your customers be your best sales people. Offer them something for bringing in their friends. Promote items that make you more money. Get more customers, and make more profit from each of them!
My name is Brandon O’Dell and I’m an independent food service consultant. I own O’Dell Restaurant Consulting and offer email, telephone and on-site consultations for $75 per hour. To receive 30 minutes of free consulting time with me, Brandon O’Dell, email or telephone me at my contacts found on my “About Us” page.
Listen to learn, not to defend!
by Andy Swingley
Thomas & King
One of the skills we should all take time to be better at everyday is listening. Many opportunities pass us by each day when we don’t engage in “active” listening. There is a positive benefit to be gained from everyone you interact with on a daily business especially in your career or business. In the competitive world of business, people occasionally view listening, learning, and changing as a vulnerable or weak value. Some would say, well if I don’t stand up for my position or prove my point, I will get walked on or miss the next big chance. Every person you engage with achieved the level of their current position with an attribute or skill that is worthy of understanding!
So slow down, look the person in the face and listen. Close your mouth and open your ears. Slow your mind down and really try to understand the message that is being given to you. Set aside proving the idea that is coming out of the other person’s mind is wrong or needs corrective coaching from you. When engaged in active listening, practice these mental behaviors:
What is the outcome of this conversation? Are you here to learn something, be sympathetic to a plight, or help solve a problem – ask the person talking to you which one it is – this will give you a better foundation to listen from
What is the topic?
Why does the subject mean this much to the person delivering it?
How can I better listen to understand what this person means?
Validate points back in the conversation – what I hear you saying is….. Then the person talking to you can determine if you are getting it and agree or reframe the discussion to present it better for you
Ask for specifics when the discussion gets off course or “tangents” away from the outcome you discussed at the beginning
And, if you just can’t keep your mouth shut…..take pen in hand, scratch pad and take notes about what the person is saying. This will force you to hear and capture the message.
So………listen to learn and not to defend
When you become a truly great listener, you develop a “mentor” quality that attracts people to you.
When you become a truly great listener your relationships, both personal and professional, become deeper and more satisfying.
When you become a truly great listener, your quality of life improves.
When you become a truly great listener, you learn from others, and this is where the best ideas come from!
This is one of my favorite quotes. Maybe because I’m the one who made it up.
It could also be that I love this quote because it deals with another major reason for failure in the restaurant world, and really, in every industry. Most managers don’t know how to delegate. That is a simple, but true, observation from years of seeing managers and owners struggle to scratch out a profit (or more commonly not make a profit), while losing their personal lives to their businesses.
I messed up by not listing this as one of the biggest reasons restaurants fail in one of my best posts, The biggest mistakes restaurants make, and why they have a high failure rate. Yep, big oversight on my part.
I’m sure you’ve heard horror stories about 60, 80 or even 120 hour weeks restaurant owners are forced to work. They’re married to their businesses, and have to be there from open to close. They have to make sacrifices if they want to succeed, they can’t have hobbies or spend time with families. Their restaurants wreck their marriages and ruin their lives.
Well, I’m here to tell you that it doesn’t have to be that way. While I freely admit that long hours and no free time are the norm for independent restaurant owners, I also maintain that this scenario usually does not yield a successful, profitable restaurant. Profitable restaurants are run by owners and managers that know how to delegate. If it were mandatory for owners to be in their restaurants all the time to make them successful, multi-store chains wouldn’t exist. In reality, they thrive. Every one of those multi-store chains started out as one restaurant. Every single one of them. The difference between them, and the majority of restaurants out there, is that the people who owned them realized that they couldn’t do everything themselves if they wanted to be successful. They needed to create systems to make sure the work got done, and got done the same way every time, whether it was by them or by someone they paid to do it. Only by freeing themselves from the everyday rigors of running a restaurant were these entrepreneurs able to grow.
If you’re a restaurant owner, or a future restaurant owner, I want you to ask yourself a few questions.
- “If I am washing dishes, who is watching the till?”
- “If I’m cooking the food, who is building relationships with my customers?”
- “If I am filling in for servers, who is spreading the story of my restaurant?”
You can’t spend your time performing tasks you can pay other people to do, and still have time to build your business. As an owner, marketing is the most important job you have. You have to have your time cleared to build relationships with your customers whether it’s by shaking hands, or by designing new service techniques that reinforce your unique selling point. Your time needs to be spent concentrating on ways to build communication and emotional bonds with your customers, not making the family’s “secret tomato sauce”.
If you are spending your time performing everyday tasks in your restaurant that other people could be trained to do, you are likely in the group of struggling restaurateurs that work long hours, have no social life, and are barely making a profit.
Learn to delegate. Build systems to do the things you do, so you can concentrate on the one thing that actually makes you money in your business, marketing.
Anything worth doing, is worth paying someone else to do.
As a consultant, and someone who talks to business owners on a daily basis, some who are clients and many more who are not, I’ve heard an incredible number of reasons why restaurant owner’s businesses are struggling or failing. 99 out of 100 times, that “reason” really isn’t a reason at all, it’s an “excuse”. There’s a big difference, and I’ll tell you what it is.
A “reason” is an explanation for why something is the way it is, with everyone involved taking accountability for their part in a situation. An excuse is an explanation for why something is the way it is, that always involves the blame being put on someone or something that isn’t involved in the conversation, and not able to share their side of the story. What’s the difference? The accountability.
Let me give you some examples. Common excuses for why restaurants, or other businesses, fail include:
Our employees were stealing from us
Our purveyors were cheating us
Our concept was too progressive for the market
The market didn’t appreciate good food
Our landlord was unreasonable
The list is endless. There are as many excuses for failure as there are failed businesses. If a person were to take accountability for their decisions and their actions, those excuses could be seen as the real reasons for failure, and they would look more like this:
We didn’t have a reliable system for evaluating good help, and we didn’t supervise our employees as effectively as we could have, so we lost a lot of money from theft
We didn’t know anything about negotiating purchasing, and ended up paying prices we couldn’t afford to pay
We didn’t research our market well enough to find out what the market wanted, so we ended up giving them what OUR idea of good food was, not theirs
We failed to communicate what made us special compared to the competion, and the market didn’t respond – or – We didn’t realize that our market doesn’t have the same ability to notice quality that we have, and we were really banking on them realizing our food was better
We didn’t negotiate a good lease
You probably notice a trend here. For every excuse that an owner can give for a business failing, there is a real reason that points back to something THEY did or didn’t do.
I’m sharing this information not to make anyone feel bad about their struggles or failure, but to help owners and managers realize that they are the only person that controls the destiny of their business. For every mistake someone else makes that affects your business, there is a procedure or a system you could have had in place to increase your chances of avoiding it.
Accountability. Until you learn to take it, you’ll be doomed to repeat the same mistakes over and over. Don’t be afraid to make mistakes, everyone does, but only those that admit their responsibility in the mistake learn from it. Those are the people that can keep trying and eventually taste success. Those that only want to blame someone else for their failures are dooming themselves to a life full of them.