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

What's the difference between retail and restaurants?

Many new owners think that running a restaurant will be easy if they’ve worked in the retail world. While all their retail skills do help, there are major differences between owning and operating a retail shop, and operating a restaurant.

These include:

In the food biz, you are also the warehouse and manufacturer of the product you are selling, which together both make up more work and require much more managing than a business that just sells the product. This is the major difference.

In the food biz, your product is perishable. After it is manufactured, it has to make it to the customer within a few short minutes in order to be satisfactory. A retail stores product isn’t worthless 5 minutes after it goes on the shelf.

In the food biz, you are also managing a distribution system. Whether it’s only coming from the kitchen to a tray on the counter, or all the way to a table, or even all the way to their home, you have to have a system for getting a highly volatile product to your customers before it’s ruined. They aren’t just plucking something off the shelf and bringing it to your register to pay.

There are a LOT more expenses involved in a restaurant compared to retail. The line items of things you must manage in a restaurant dwarf that of a retail shop.

Inventory procedures and control are much more complicated for a restaurant than a retail shop. While both types of businesses require you to track your cost of goods sold, the process in a restaurant is MUCH more complicated, as you will likely have more items on your inventory in more various stages of prep that all have to be counted, tracked, and ordered more often. These items are also much easier to waste and steal than in most retail settings.

Managing a food business and managing a retail business just aren’t the same thing. Not even close. While managing a food business requires all the skills used in managing a retail business, those skills are only a fraction of the skills you need.

The most difficult transition isn’t going from retail to food, not if you have worked production in the food business, it’s going from employee to owner. Managing in a business and owning a business are not the same thing. Not to say that people don’t successfully make that transition because some do. Most need experience running a business with someone else’s money first though, in a structure with support and mentors to teach you what you don’t know.

I would suggest reading a couple books to give you some insight on being an owner that you may not have considered. Any book on opening and operating a restaurant will help. One that I think is good is “The Everything Guide to Starting and Running a Restaurant” by Ronald Lee, a guy who owns and operates restaurants. I would also suggest “The E-Myth Revisited” by Michel Gerber, and any and all books by Al & Laura Ries or Dan Kennedy. They are real world marketing gurus.

While you can’t realize it until you open your business, the toughest part of the restaurant business isn’t making and serving great food. Doing that is relatively easy. The toughest part is creating a concept that speaks to people, and creating a system of marketing to get people into your business.

The biggest mistake new restaurant owners makes is thinking that all they have to do is “build it and they will come”. They believe their food is so good, or their idea so revolutionary that people will flock to them. They talk about building their business by “word of mouth” instead of having a real marketing plan, and more often than not, they fall flat on their faces. Don’t make these mistakes. If you do nothing else, study restaurant marketing. I think everyone who owns a restaurant will tell you they greatly underestimated how important marketing is. Remember, word of mouth marketing can’t work if no one knows who you are.

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