Monthly Archives: October 2008

Quick tips – Update your menu often

You can greatly improve your cash flow by adopting a policy of smaller, more frequent price increases instead of waiting for a year or longer before raising prices a larger increment.

Use this simple example to catch my drift:

Chicken tenders $5.99 from January 2008 – January 2009
Price raised to $6.99 after January 2009
4000 orders of chicken tender sold during whole year
$23,960 in sales for year

Chicken tenders $5.99 from January 2008 – March 2008
Chicken tenders $6.29 from April 2008 – July 2008
Chicken tenders $6.49 from August 2008 – October 2008
Chicken tenders $6.79 from November 2008 – January 2009
Price raised to $6.99 after January 2009
4000 order chicken tender sold during whole year, 1000 order per quarter
$25,569 in sales for year

By not waiting to raise the price, you gain an additional $1,609 in profit for the year off one menu item. You also help mask the price increase by doing it incrementally. Your customers are much less likely to notice $.20-$.25 increases compare to a $1 increase.

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Who is the target market for your restaurant?

This may be the most important question you can answer when designing a restaurant concept. It is definitely the most important question to answer when creating a marketing plan.

One of the biggest mistakes restaurants make is trying to appeal to everyone. If you think that your target market includes everyone, you are setting yourself up to fail. If you want to be successful in any business, especially the restaurant business, then you need to define who it is that is most likely to buy your products, and focus your concept to appeal to that defined market.

First off, let me tell you what a target market or target demographic is and what it isn’t.

A target market IS the portion of the population most likely to buy what you are selling.

A target market ISN’T the portion of the population you want to sell your food to.

Do you see the difference? You must realize that your target market picks you, you don’t pick it.

When creating a plan to market your restaurant, focus on these points.

    1. Realistically define what type of person is most likely to enjoy what you want to offer.
    2. Assess whether that particular demographic works or lives in large enough numbers within 3 miles of your location to support your concept.
    3. Make sure your marketing is communicated in a manner that demographic can understand, and broadcast via a medium that demographic uses.

 

 

Here is how you use those points to build your marketing plan.

Point 1: Realistically define what type of person is most likely to enjoy what you want to offer.

This isn’t the time to be politically correct. You need to examine gender, age, race, religion, income, background, prejudices and sexual orientation among other things if you want to get a clear picture of who you should be marketing to. No matter who you want as a customer, kosher Jews and Muslims aren’t going to eat at your BBQ joint. Lower income Asian families aren’t going to eat at your bistro, and upper income, white yuppies aren’t likely to visit your diner in the hood. If you have a “quiet” atmosphere, don’t expect to attract families of any type. If you have a “noisy” atmosphere, don’t expect seniors.

Until you throw political correctness out the window and truly define exactly who is most likely to eat what you offer, in the atmosphere you are offering it, at the price you are charging for it, you aren’t ready to move on to the next step.

Point 2: Assess whether that particular demographic works or lives in large enough numbers within 3 miles of your location to support your concept.

Once you know who it is that is truly most likely to buy your food, you’ll need to consider whether or not they live or work in large enough numbers in your area to support your business. This is a feasibility exercise. With this point, you are determining whether or not it is even possible for your idea of a restaurant to make it in the location you are considering.

If your concept appeals to low income seniors on a fixed budget, you shouldn’t be putting it in an upscale shopping center surrounded by neighborhoods full of high income families. You also don’t want to open a bistro appealing to high income white people in the ghetto. While these examples seem obvious, I’ve seen many restaurant make the mistake of putting their concept in an area where their target market does not live or work in great numbers.

A good rule of thumb is to only consider the initial 1-mile and 3-miles radius around your restaurant when evaluating the presence of your target market. Whatever the sex, age and income of the persons most likely to eat your food, those persons need to be living or working in great numbers within a 1 to 3 mile radius of your restaurant. The closer the better.

On to the next point.

Point 3: Make sure your marketing is communicated in a manner that demographic can understand, and broadcast via a medium that demographic uses.

Email marketing isn’t going to produce customers for a breakfast diner appealing to seniors. Radio ads on an easy listening radio station aren’t going to bring in 20 and 30 year old hipsters. If you haven’t defined who it is most likely to buy your food, it’s not likely you are using marketing mediums most likely seen/heard by your most likely customers.

In marketing, you must use the language your target market understands. Speak your target market’s language and only create offers that target market values. $10 off a meal isn’t going to attract high income middle aged married couples, but a complimentary bottle of wine with any food ticket over $50 might. While any demographic appreciates a good deal, each demographic has a different set of values. What is valued by middle class high school kids won’t be the same as what is valued by humble German country folk. The language each of these groups understands will also be different.

Communication with your potential customers is just as important as communication with your employees. If you are speaking a language your customers don’t understand, or designing offers your target demographic doesn’t value, then your marketing will be a big waste of money. If your current marketing isn’t working, there is a good chance you’re doing one of these two things.

I hope I’ve driven home the importance of defining your target market. Marketing can be an expensive undertaking, but if you define exactly who it is you should be marketing to, you can greatly reduce the cost involved in reaching the customers most likely to eat at your restaurant. With the right approach, you can not only compete with chain restaurants with big marketing budgets, you can beat them.

Brandon O’Dell
O’Dell Restaurant Consulting
www.bodellconsulting.com
blog.bodellconsulting.com
brandon@bodellconsulting.com
Office: (888) 571-9068

Who's in charge of your restaurant?

Charlie said….. Marla said….. Patrice said…..

He said, she said. It’s a game that gets played in a lot of businesses. Not having a defined “pecking order” that is understood by every person in your organization can lead to a lot of unneccessary headaches. Here’s a quick lesson about avoiding this business pitfall.

Who is in charge when you’re not in your restaurant? Who is your second when you are/aren’t there?

Every good business structure includes a management tree. At the top is the owner(s). Just below, the CEO or General Manager. Underneath may be assistant managers, shift supervisors, trainers, tenured employess and new employees. Any which way the hierarchy of your restaurant shakes out, it’s very important that your entire staff understands who is in charge at any given time.

Not having a set chain of command leads to confusion. To a new employee, any person in your business is someone to be obeyed and learned from. As I’m sure you know, different employees of yours have different methods for doing the same thing. One may be better, one may be worse. Either way, the only way things should be getting done is yours. This is only possible with accountability through creating a chain of command that allows you to police your systems and correct errors within the system.

When creating a system of hierarchy, avoid this one common mistake; do NOT give equal, shared authority to two different employees. Sharing authority equaly creates stalemates and sets you up to lose track of who is accountable when the wrong decisions are made. He said, she said.

Create a management tree. Don’t split authority. Hold your staff accountable.

Brandon O’Dell
O’Dell Restaurant Consulting
www.bodellconsulting.com
blog.bodellconsulting.com
brandon@bodellconsulting.com
Office: (888) 571-9068

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