Monday

Word of Mouth - Again

I've seen a lot of businesses, and some restaurants, talking about how much better life would be if only they had a facebook page, or how to get their web site more traffic.

Everyone who knows me knows I'm a big fan of electronic marketing. Blogs, web sites, disucssion boards, SEO, SEM - you name it.

But no so much for restaurants.

Sure, they're important. Sure, they can help convince someone who has already heard of you that your restaurant is better than another. But let's be clear: the vast majority of people eat at a restaurant for one of three reasons:

1) you have a great location and are convenient
2) people have heard great things about you (word of mouth)
3) customers have tried your food and liked it

They might check out your web site after they've heard of you, and before they try you, but the web is still secondary to word of mouth.

So if word of mouth is so important, why do we spend disproportionate time on the little things? Or money on advertising that doesn't generate word of mouth? When was the last time you and your friends got into a great philosophical debate over a newspaper ad? When was the last time you tried a new restaurant based on a newspaper, television, or radio ad (unless you saw/heard it at lunch time and happened to be sitting in front of that restaurant?

Americans see more than 2,000 messages per day. Advertising the old way is out. The web is measurable, and levels the playing field, but what percentage of new customers come because they first heard about you online?

Here's food for thought - the "hot new marketing medium" isn't electronic, broadcast, or print. It's on the sidelines of a soccer field, in the pediatrician's office, at the water cooler, and PTA meetings.

Folks, if your marketing doesn't promote word of mouth, and give those mouths the words to say, you're chasing fads. Nothing is more effective. And because most restaurants aren't any good at it, therein lies great opportunities for yours.

Thursday

LSM for Blogs

I'm trying out some SEO (and LSM) techniques for blogs. Some work, some don't. But we keep trying new things (and also continue the things that work, no?).

Excuse this post for a day or so...

Technorati Profile

Tuesday

Cause and Effect

The media tells us nearly every day that the restaurant industry's sky is falling. There is one restaurant for every 662 people in the U.S., and 662 unique customers isn't enough to sustain any one of them (unless they have outrageously low rents).

So, competition is stiffer. Apparently, according to Technomic, it's getting even stiffer. Retail meal solutions threaten to cut into market share even more by offering convenient, nutritious meals at an affordable family price-point (discuss restaurant competition at The CommonMan Group).

All this at a time when labor and food costs are rising and higher menu pricing is a looming reality. A menu and price elasticity study by Technomic for American Express provides some solid strategies for raising menu prices, how much, and at what dayparts.
(Discuss raising menu prices and customer satisfaction levels at The CommonMan Group.)

What is interesting to note about these two items - increased competition and rising costs - is a potential solution. When asked about the factors that would cause them to accept higher menu prices, consumers indicated atmosphere/ambience, cleanliness, and friendly staff would make it OK to spend the higher prices.

These are all things within the control of the operator, not external, "woe is me" factors. In all reality, this market is a shake out that will force restaurant owners to provide a dining experience, not just convenient food.

Friday's has implemented a new customer appreciation plan that has some pretty interesting elements to it. Take a look, and then tell us what you think and how you're dealing with the short- and long-term challenges facing the restaurant industry at The CommonMan Group.

Thursday

Getting started with local store marketing

Every now and then I look back at posts to see how the conversation has evolved. I sometimes see that I get longer over time, writing articles instead of posts (I'm passionate, what can I say?).

I also notice that there's a wide mix of readers here. Some are old hats looking to tweak their game, others are just getting started.

So here are the basics of local store marketing for restaurants, just to get the ball rolling:

1. People choose restaurants based on word of mouth, not advertising
2. The other reason people choose restaurants is convenience - if your location is great, great. If not, you need to market.
3. Given the choice, consumers purchase from someone they know and like
4. Given the choice, people will support businesses that support their community
5. The lifetime value of a customer is more important than the one-time profit
6. Word of mouth is the best form of advertising, your marketing should encourage it
7. If your product is good, and the experience is memorable, people will talk about you and come back
8. You should remove all barriers to trial of your product
9. They're called guests for a reason, don't treat the transaction as a transaction
10. Community involvement is good business

That should get you started. Local store marketing is how it was done in the old days. Now that customers have to pass dozens of restaurants to get to your location (usually when they're hungry), owners are starting to realize that 90% of their business comes from the 3-5 mile radius surrounding their stores.

Successful local store marketers try to meet as many people within that radius as possible.

If you'd like more ideas, have ideas to share, or just want to discuss local store marketing with others in your shoes, visit The CommonMan Group: http://forum.commonmangroup.com. It's like an ad agency for the little guys.

Marketing for Franchised Brands

Franchisors are often at odds with franchisees about how to market their units. Franchisees, very often, want TV or radio spots, customizable for their area, whereas Franchisors know that those media aren't as effective as others - especially in an area where the brand has little or no awareness (an 'outlying' store).

Say you're a potential Franchisee in Columbus, OH, and you buy into a pizza concept with good store density in the southeast. Your marketing expenses will be higher because of lack of awareness and no economies of scale.

Most of us know this intuitively, but you'd be surprised at how far apart Franchisors are from Franchisees on this issue. Here, we look at why it happens.

From the time a prospect contacts a brand, the sales process begins. During the process the sales team trots out in-store POP, marketing manuals, and print collateral, all showcasing the beauty of the brand and the creativity of the team. It's their jobs. It's what they do.

Prospects see the objects of their desire - slick marketing material. They hear how the franchise consultants will help them market their units, how other Franchisees are a knowledge base to tap, and how they'll get their own 90-day marketing plan to hit the ground running.

So far, so good. The problems come in 12 months down the road, when reality sets in. The reality is that, while the materials look great, the store owner has to purchase the media to put them into the community. This isn't a perceived problem prior to opening - we'll buy a couple of radio spots, tell 100,000 people we're here, and then by more spots with our profits.

Chick-fil-A had nearly $800 million in sales before they ever ran their first TV ad. Have you ever seen a TV ad for Starbucks, one that wasn't for a packaged product that also sold in grocery stores? Not likely. Until recently Starbucks was all about billboards and store signage.

The result is a chasm: Franchisors know that local store marketing, getting Franchisees into the community shaking hands and kissing babies, is the best for all stores (that's how they built their first one, in most cases). Franchisees have been led to believe that corporate would be more involved, that materials and tools would do the work for them. Corporate's view is that they'll provide the hammer, but it's up to you to swing it.

Who's right? Usually, the Franchisor. It's their responsibility to provide tools, resources, and guidance. They've seen marketing done both ways - media vs. LSM - and they know when to apply each. Corporate's largest complaint is that owners sit behind the counter, waiting for sales instead of going after them. They bought themselves a $6 an hour job.

The problem is that expectations were not set properly. At the end of the day, success or failure of a location is dependent on the Franchisee. Many lawsuits, however, cite lack of marketing support as the reason for closure.

One solution to this issue is to clearly define expectations and roles at the beginning of the relationship. It would help if Franchise sales teams put more emphasis on the tools instead of looking to impress. It would also help if, during training, franchisees were exposed to the reality - "Here are your tools, and here is how to use them." An entirely new mindset needs to be established, and it can't be done once the store is opened.

Many Franchisees in the restaurant industry come from outside the industry. They come from big companies and only see the collateral, not the sales process. They see Outback and McD's advertising and have an unrealistic perception of its effectiveness. Advertising can be very effective, but it costs a lot of money and can be a treadmill to an under-capitalized unit.

Local store marketing builds customers and relationships and is more effective in both the short and long runs.

Tuesday

Restaurant Marketing Ideas for Summer

Summertime is a great time for some restaurants (seasonal businesses, good locations), but can be frustrating for those who count on schools and families for their marketing ideas. Where do you market when kids are out of school? How do you find families who are still in town? How do you get in with other seasonal businesses to cross-promote?

Families are still around, but they've changed their schedules and routines. Plus, they now get information in different ways. Instead of learning of you through a school newsletter, they now get emails from parent's groups, sports leagues, and summer camps.

Some marketing ideas can be found at this link (and we hope you'll add your own), but here we discuss the theory behind it.

The activities families are involved in are like media. Instead of a DJ, a school has a principal. Instead of a TV star pushing your product, you have church leaders who give you positive word of mouth. Local store marketing is like PR, but in smaller, more local groups.

Families change their "media" throughout the year, and summer is the most obvious. Instead of hearing of new things through the PTA, they now hear about them poolside, or at day-camp drop off. Many businesses need to change their marketing tactics to adapt.

Know, too, that buying decisions change during the summer. During the school year, when kids are involved in organized activities, getting take-out before soccer practice is a balance between convenience and "a lighter meal". Kids are still active in the summer, but often with play dates and camps instead of organized activities. Now the buying decision might be more like a family picnic, or include friends of children. How much food can I get for the dollars spent might be a better message in the summer.

For some, summer means a quiet period ("everyone's on vacation"). For others, it's a chance to find new audiences (been to the library lately?) or promote other menu items. For the smart local store marketer, it's a chance to get reacquainted with your community.

Monday

Introducing The CommonMan Group

[Note: post was edited to give a little more info: We're trying an online version of a marketing roundtable. Visit this site to get ideas and ask questions. If you know answers to others' questions, put in your two cents worth as well.]

forum.commonmangroup.com

Looking for marketing ideas? Like to share some of your own? Have a specific marketing challenge you need to overcome. Visit the marketing discussion boards at The CommonMan Group.

It's just getting started and needs your input. I'll be there too, but this is about community, not me telling you what to do.

Some examples of topics:

Mrs. Winner's summer gas promotion

An example of how NOT to do LSM

How to make customers feel like guests

And more. Don't see a topic that tickles your fancy? Start your own. Just register and login. You can ask questions and give your own two cents' worth to others.

Local Restaurant Sales

I'd like to expand on the poll to the right by asking for a little more information:

Are your sales up or down from this time last year? I'd also be interested to know if you're a fast-casual, fine dining, independent, chain, etc. Tell me a little more about your business.

From cursory research, I'd say that sales are relatively flat in some fast-casual segments - their customer counts down, but ticket averages are higher. Info like that can be the basis for some summer promotions (frequency of visit, higher ticket specials).

For more discussion on the poll, visit the local store marketing discussion group to give (and get) ideas for managing summer sales.