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.
While I agree that frequent couponing is ill advised, an occasional loyalty discount or one time special deal does not skew anyone’s perceived value. Instead, it gets consumers excited to try or re-visit a place. And email marketing is far less expensive than direct mailing postcards! If you’re going to suggest direct mail, at least recommend collaborating with neighboring businesses to manage costs…
All good points. Offering loyalty rewards and other promotions are not the same as “discounting” though. I’ve never told anyone that they shouldn’t promote their products. What I have told them is not to do it with a discount, like offering “x” dollars off or “x” percentage. Those types of offers hurt your value perception in the eyes of the customer. They also attract coupon clippers who tip less, spend less and drive down profits. There are other offers that restaurants can make that won’t lower their average ticket or hurt their gross profit that are even more attractive to customers than discounts.
On direct mail, it is only one part of a well designed marketing plan. I have time and again touted email marketing which is also just a part of a well designed marketing plan. See this thread: https://blog.bodellconsulting.com/2008/01/15/you-do-have-a-customer-database-dont-you/. Some customers respond to direct mail, some respond to email. Each are likely in a separate demographic from the other.