Monday

A New Take On Restaurant Demographics

Two questions:

1. Who is your target audience?
2. Does target audience really matter at all?

The answer to the second question depends on whether you plan to use mass media. If you do, target audience is important in choosing your media. If you do not plan to use mass media, then I suggest definition of target audience different than the traditional definition.

My definition: Anyone who likes your category of food and is willing to dine out at your price point is your target audience. Male, female; old, young; rich, poor; they're all your audience as long as they have money to spend.

Wait a minute. You can't fool us. We know from our marketing classes and years of experience that we want to attract certain demographics.

True. To a point. You see demographics are good for determining where to open your location, what your interior should look like, what menu items you offer, what your price point is, and a whole range of decisions.

But if you're reading this, those decisions have been made already and your restaurant is open. So your new target audience is anyone living or working within a 5 minute drive who likes barbecue (or salads or burritos or pizza).

If you can't get locals to visit, good luck getting someone who fits your demographics to a T to drive 15 minutes in heavy traffic and pass countless other, similar restaurants just because they like you better. It rarely happens. You wouldn't do it, why would they?

Plus, if you're the Mayor of Your Village, shaking hands, kissing babies, then your efforts are more about salesmanship than marketing. Marketing is a message sent to the masses, but local store marketing is about crafting a message for a particular group in the community. Love me, love my product. You are the brand.

Ok, Ok. Demographics aren't completely useless after you're open. They can help you figure out who your heavy users are, what's important to them, and how you can get them to bring their friends.

Demographics matter, but once you've signed the lease they're secondary. Now it's all about convincing those who are near you to frequent you.

Tuesday

Word of Mouth: Let your customers do the talking

[Note: if your customer service and overall customer experience aren't perfect, please disregard this post.]

We all know that word of mouth is the best form of advertising, yet few of us consciously do anything to spread word of mouth. It's like we take it for granted - if customers enjoyed my restaurant, they'll tell their friends.

Maybe, but why not encourage it? Below are some tips to help increase positive word of mouth, instead of simply waiting for it to happen:

1. Ask for it. At one restaurant I know the owners and managers walk the tables with the standard conversation of "How was everything?" - with one major difference. If the answer is "great" then the follow up question is "Good enough for you to tell your friends?"

2. Complementary audiences. PR works so well because we target thought leaders, usually media people such as DJ's and food critics, who have credibility. At the local store level, why not target ministers, principals, event chairs, and charity heads?

3. Make it special. Few people offer their thoughts on merely adequate experiences. If the dinner was 'fine' and not 'great', don't expect much play. Go out of your way to make an experience special for someone. That might mean anticipating the need for a high chair for a frazzled mom, providing dessert for a group of kids, or soliciting the opinions of a group of lunching business women. Make a personal contact, look for ways to exceed expectations.

4. Small groups work best. Word of mouth spreads faster within small groups than the world at large. Target your audiences, identify the key influencers, and solicit their goodwill. Don't leave an audience until you've won them over, then go after the next audience.

One estimate I heard recently is that half of your business can come from word of mouth within 3 years, all of it within 5 years. WOM is slower than some media because of its personal nature, but its effectiveness and the loyalty it generates can't be denied.

Monday

Encourage Word of Mouth Advertising

In my marketing training classes, I always ask the question: "What is the best form of advertising?" The answer, nearly always from class to class, is word of mouth.

So the next question is: "What types of things engender positive word of mouth?" Here we get everything from great customer service to making guests feel special to creative promotions and events.

Finally, I ask: "Why the disconnect?" If we know that positive word of mouth is the best form of marketing and advertising, and we know that giving an outstanding customer experience, having fun with guests and treating them special lead to positive word of mouth...why do we spend our marketing and advertising dollars on print and broadcast media?

What was the last radio commercial you heard? What is your favorite newspaper ad, one that you and your friends all agree is really effective as you're discussing it over a beer or two?

Multiple channels, iPods, CDs, DVDs, the Internet, Tivo, pay-per-view, Netflix, cell phones, and the good old fashioned radio dial all contribute to a consumer's ability to avoid your ad. Yet we continue to spend money on "awareness" advertising for our restaurants, instead of moving money from the advertising budget to the promotional budget for things like key chains, free beverages, free appetizers, etc.

In other words, the things that will create a bond and promote word of mouth.

Knowing what you want to accomplish is critical before spending money to promote your restaurant. Ask yourself how much word of mouth your newspaper ad will generate, then act accordingly.

Friday

Trial, Frequency, Ticket Average - Not Just for Restaurants

For those still in doubt as the wisdom of narrowing your marketing objective to one (and only one at a time) of three choices, here are a couple of examples of how common the strategy is for nearly any kind of business.

Credit Cards
- Drive Trial: "0% interest for 6 months!"; "0% interest on all balance transfers!"
- Increase Frequency: "Register to win a million dollars every time you use your card in the month of May!"; "Earn double rewards points with every purchase!"; "Get cash back/free gasoline with every purchase!"
- Increase Ticket Average: "Free lost-baggage insurance"; "Get a rental car/hotel room upgrade when you purchase both on our card"; "Revolving credit on any single purchase over $200"

Cell Phones- Drive Trial: "Get a Free phone!"
- Increase Frequency: "1,000 weekend minutes!"; "First 10 text messages are free!" (note that free texting drives Trial of a different service, which leads to increased usage, which leads to increased ticket average); of course, frequency is also built in with the contract
- Increase Ticket Average: Text messages, ringtones

Now consider how Procter & Gamble moves consumers from Trial to Frequency to Ticket Average for Crest toothpaste:

- Customer receives free sample in the mail along with coupon off first purchase
- Customer receives buy one/get one free coupon (Mom and Dad use it, now it will be in the kids' bathroom too)
- Packaging states "20% more for free!" - consumers become accustomed to purchasing the larger size (and getting two of them)
- 20% promotion is pulled away, leaving consumers happy purchasing two larger tubes.

Restaurants are no different, and no one tactic can achieve all of the goals. You need more than a laundry list of "creative" tactics (but those are fun, and they will work if used properly). You need a little discipline from the advertising world to make all those ideas work.

Thursday

What makes for a great LSM idea?

I've had several people ask lately: "What are some great marketing ideas for my restaurant." I have to admit, I'm generally stumped. The question is similar to "How much does it cost to buy a car?"

I don't mean to be vague here, but we really need more information. It doesn't matter so much what type of restaurant you have, but more what you want to accomplish and when. "We need more customers anytime" isn't enough to go on.

Certain tactics work well for driving trial (which leads to new customers if the experience is WOW!), but are foolish for existing customers. Likewise, doing a really creative promotion with the local high school, no matter how well received, won't improve your breakfast daypart.

First, what do you want to do (pick only one of the three choices):
1. Get more customers? (And for this you need to be sure that you really do need more customers - most restaurants are already leaving enough on the table without any new customers.)

2. Get existing customers to visit more often? This is an easier prospect and generally reveals the fastest results.

3. Get customers to spend more money? It might be that your current offers actually drive down your ticket average. It might also be that current customers don't have a full appreciation for your entire menu - internal promotion can be a powerful thing.

Note: You probably want all three of these things. Be patient - you can only choose one at a time because, as you'll see below, each of these objectives probably has a different audience.

Next, when do you want to achieve these objectives ("now" isn't the answer I'm looking for)?

- Drive trial during lunch?
- Increase frequency of current dinner guests?
- Increase ticket average during the evenings and weekends?

This is where you determine your audience. You wouldn't market to a church or school if your lunch traffic was slow. Likewise, if you want to sell carry-out and increase your evening ticket average, marketing to office buildings won't help much.

Local store marketing is a great tool and is invaluable to countless restaurant and retail merchants. Anyone who knows me knows that I'm passionate about its potential and a true evangelist of its tactics.

But tactics alone won't cut it. A long list of great ideas, without adding a framework to it, will only disappoint in the end. If you want results, you need to carefully consider your objective and audience. These will determine your media and tactics, not the other way around.

Wednesday

How to Get Frequency of Message

I've had several posts and newsletters about frequency of message, so now might be a good time to discuss how to achieve that frequency.

Frequency of message is the number of times someone sees your message as opposed to how many people see your message, which is reach. The number of impressions it takes to get someone to remember your name and purchase your product is called effective frequency.

Repetition is good for recall and frequency aids repetition. Therefore, frequency of message = good.

You can get a high message frequency from straight advertising. In fact, many companies with large budgets do just that. They even buy out some of the ad clutter, making them even more effective. I'll assume that, if you're reading this, you are more likely to have a shoestring marketing budget (though if you're a big company, drop me a line, I'll guarantee your cost per customer gained will drop like a stone).

If you have a small budget, and you rely on advertising, you're probably purchasing a single ad, or saving your money for TV, and are losing out on frequency (ie: you're going for reach).

Local store marketing tactics are preferable for frequency because the cost of each tactic is lower than purchasing media. More bang for the buck.

A note of caution: If you decide to go with local store marketing you must employ frequency of message. To do only one or two messages, a la advertising, you will get the same poor results as with advertising, but at a lower cost.

Frequency of message can be obtained by using a diverse marketing mix. You must employ more than one of these tactics at a time and you must consistently and persistently apply them. Here are some pieces to the puzzle, in no particular order:

The usual suspects:

  • car wrap
  • signage
  • print and broadcast advertising
  • word of mouth (does your advertising generate word of mouth, or is it the customer experience?)
  • billboards


The 7 Core Competencies:

  • Sampling
  • Catering (as marketing)
  • Event sponsorship / participation
  • Email
  • Fishbowls
  • In-store signage and merchandising
  • Bounce-back coupons


Promotional Items:

  • cups
  • frisbees
  • key chains
  • pens
  • calendars
  • t-shirts
  • hats
  • kid stickers / tattoos
  • coloring sheets


You get the point. Frequency of message doesn't have to cost a lot of money, but it does need to happen frequently (as the name would imply). To paraphrase Morris Hite: More money is wasted on underspending for advertising that overspending. Advertising doesn't work if you don't put enough resources behind it. Neither does local store marketing.

Tuesday

Good Marketing = Message Frequency

A marketing manager called me today and asked for 10 "creative, outside the box ideas" that have worked for other restaurant concepts. I started to rattle off some ideas but I stopped myself and started with a caveat instead: Most ideas are good, if you do them correctly and consistently.

Getting new local store marketing TACTICS is the easy part. But understanding the STRATEGY behind them is often the difference between success and failure.

The strategy behind local store marketing, or any other good marketing for that matter, is frequency of message. Local store marketing makes this easier than advertising because frequency can be achieved for less money.

When tactics fail, it's almost always because there was no strategy behind it. "I tried that once and it didn't work." Nope, probably not. Because sending a message one time rarely finds its mark. Even if it does, people won't remember it. Repeating a tactic, or using multiple tactics (with the same message) for the same audience, works. And LSM makes that a reachable goal.

And therein lies the fallacy. Many owners, and franchisors, are attracted to local store marketing because it can be fun and creative. Its effectiveness, however, is determined by a consistent and persistent message in the marketplace.

For a restaurant franchise, the result of no strategy is a toolbox of tactics that no one uses, ineffective store owners, franchisees who continually need new and increasingly specialized "tools", and a business consultant who needs new ideas (they've become disposable).

For a single-unit operator, the result of no strategy is frustration, followed by eroded profitability, followed by decreased customer base. Wasting money on marketing is the same whether you do it inexpensively (LSM) or expensively (advertising).