Wednesday

Restaurant Marketing - Celebrity Endorsements

Michael Phelps says he'd love to endorse a fast food company. But it got me to thinking about why companies solicit celebrity endorsements at all. Obviously it's because they want to show that they identify with their target audience - an endorsement says "they care about what I care about, and if you like me you'll care about them."

OK, not exactly like that, but pretty close.

So why can't local restaurants do this same thing, only with people who are not as well known? A HS football coach serves as a food runner for a fundraising night brings in around 100 players and their families. Plus, you get the benefit of showing you support what they support, so they should support you. How is this any different than getting a local DJ to say nice things about your food?

What about a local pastor handing out samples, or a local HS band playing out front for recognition of an award? The Chamber president serving as guest bartender for charity?

Being the Mayor of your village isn't about how pretty your ads are, it's about how well you know your community. Michael Phelps doesn't know diddly about Brunswick, GA or Ukiah, CA - but if that's where your restaurant is, you do.

Tuesday

Go, Speed Racer!

I was watching Speed Racer with my little boy (the original series, not the movie) and one of the episodes made me chuckle.

Speed's dad opened an auto repair store and business was slow. Speed came in with this advice: "Why don't you give away the first repair for free? Then that person will tell of his friends how great you are, and what a good job you do. Then you'll have so much business you won't know what to do."

His dad took him up on the advice and soon had so much Model T business he couldn't handle it all. Got me to thinking about a couple of things:

- Doing something nice for someone usually creates a stronger relationship with customers than simply advertising.

- Especially for restaurant marketing, giving away a sample at an event (or better yet, giving someone a free sandwich/app/dessert so that they have to find your location) has always been a great way to show your product in action.

- This type of marketing was the norm back in the day. What makes you think it doesn't work now? Because we're more sophisticated and can reach 100,000 people in one message? Try that, let me know how it works for you.

- Word of mouth spreads faster in small groups (in this case, Model T owners - then do it for Corvette owners, then for Cadillac owners, and so on). Maybe the objective of your marketing should be to spread word of mouth, instead of create awareness.

- "But if I give it away, I'll have too much business and people will be mad." For the love of Pete, would you listen to yourself? First you don't have enough business, then you have too much. Be smart about it and this is never a concern. If you can't handle it, you should probably return to middle management.

- "But if I give it away, it will cheapen my product." Hogwash. Plain and simple. $1 off and BOGO w/purchase of a drink cheapen your product. Give someone free food, or support their event with discounted catering, and chances are they'll be grateful instead of taking you for granted.

All of this from a leisurely evening with my seven year old. Some things were just easier back in the day. You go, Speed Racer.

Thursday

Who have you WOWed today?

When customers have been WOWed they are more likely to express their delight (read: word of mouth).

They're more likely to come back to your restaurant more often in the hopes of being WOWed again (hint: make the WOW special, it needs to be out of the ordinary, not expected).

They're likely to bring friends with them ("I know the owner. He's a great guy, you'll love him.").

And, over the course of a year or their lifetime (as a local resident or someone who works in the area), they're likely to spend more money with you because they are loyal to you and you have a higher share of wallet.

WOW one person per day, you have 365 WOWed customers per year. Sadly, most of us are too busy managing from the back door to the front door to notice. We're like prairie chickens, pecking in the dirt for scraps, instead of like eagles, flying overhead looking for opportunity.

So I ask you: Who have you WOWed today? Tell us at the restaurant marketing forum, The CommonMan Group.

It's the Frequency, stupid

I've heard it so many times this year I almost started believing it myself. "I need more customers! How do I get more customers?!"

Sales people have jumped on that bandwagon. Many aren't telling you what you need, they're telling you what you want to hear. "We reach 50,000 people ready to buy. We'll get you more customers."

Here are the facts:

  • The average American is dining out 4 fewer times per year
  • Depending on the type of restaurant you have, you probably have around 4,000-6,000 unique customers
  • 4 fewer visits per year x 4,000 customers = 16,000 fewer visits x $10 ticket average


Not all of your customers have taken all of their four visits from you, but maybe you lost 1.5 of those (times 4,000 = 6,000 x $10 ticket = $60,000). Sound familiar? Is this about how much you're down?

Now your ticket average is probably higher now than last year. Why? Because the customers who remain are your loyal ones, and loyal customers spend more and bring friends. So if you normally have a $10 ticket average, but now it's up to $11 or $12, you're missing your not-so-loyal (but very profitable) $8-$9 customers.

You need to focus on getting them back, focus on getting customer counts up.

New customers will come, but they cost more to get and take longer. Former customers, not visiting because of the market, are easier to get back more often (email, bounce-backs, promotions, LTO). Solidify your base.

Catering sales: Match your product to your audience

I recently reviewed some things from an ice cream concept. They are pushing cake sales and catering opportunities and have a program for going out to offices and other prospects.

The program is pretty good, but it misses a basic ingredient: if you want to sell higher ticket items (catering, for example) it's easier to sell to existing, loyal, and vocal customers than it is to someone in a sales pitch.

An example (we'll use a BBQ restaurant, but the principles are identical): what are the odds you sell a $300 catering to a group when no one has tried your product? What is the cost of that sale? You visit, you invite them in for lunch, you follow up, you leave materials. Then you have to wait until they have an occasion to buy and either hope they remember you or try to stay in front of them (more cost).

Contrast that to aggressively marketing catering to existing customers: send monthly emails that talk about catering; offer bounce-back offers for catering; draw fish bowl names for free "mini-catering" to their offices. Advantages: lower cost to a group you know has enjoyed your food.

Stick with selling higher ticket items to existing customers: it costs less and you'll sell more. So how do you get new customers to become (eventual) large ticket purchasers? Give them the small stuff and turn them into loyal customers. Remove all barriers to trial of your product and use Frequency tactics to keep them.

Tuesday

Restaurant Market Share

Chipotle's doing it. Buffalo Wild Wing is doing it. So are Brueger's Bagels and BJ's Restaurants. They're planning to aggressively open new stores this year. This from the June 30, 2008 edition of Nation's Restaurant News.

And they're doing it even as consumer confidence slides. Even as people dine out less. Even though new store openings have outstripped demand every year since 2003 (there is one restaurant for every 662 people in the U.S., according to the NRA).

Why?! Two reasons: 1) because they can (good cash positions and limited debt) and 2) because it makes sense - grab market share now, cash in when the market rebounds.

Those who advertise now, who aggressively market, who open new units, have a great chance to grab market share, increase profits during the downturn, and come out far ahead of the pack after the recovery. So says nearly every study of every economic downturn since WW II. If you're waiting it out, you might be in trouble.

So...what to do? Here are some suggestions from those in the know:
- Cut costs, but don't skimp. Customers who perceive you're giving smaller portions without lowering prices, or charging for items that used to be free, will make you pay for it by giving your share to someone else.

- Invest in the culture. Nearly half of all lunch and dinner diners say that excellent atmosphere and customer service would help them forgive rising menu prices. Even if your prices aren't rising, you've gained goodwill (and loyalty).

- New menu items. Limited time offers and new menu items give existing customers more reasons to visit more often.

- New offerings and dayparts. Late night meals, breakfast, mid-afternoon specials, carry-out, delivery, catering - make it easy to purchase from you.

- Share, not profit. Profits matter, you'll never hear me say they don't. But you can't take percentages to the bank. Do what it takes to get butts in seats, but be careful not to addict your customers to discounts. Offer an exchange of value: apps for 4 when you buy them for 2; free dessert with purchase of salad and entree; free upsize before 11:30am (start lunch earlier).

Head count, butts in seats, are more important now than percentages. The more mouths you have in your restaurant (and the better you take care of them), the more mouths there are to spread the word.