How to increase your restaurant business
Nicolaj 2 January
Nicolaj 2 January
When restaurant owners see a dining room of empty tables and chairs, they do everything possible to fill them. It can seem like they are one good idea, one promotion, away from a flood of customers. They dream up all kinds of promotions and bombard customers with them, hoping to squeeze out more business.
It, more often than not, doesn’t work as planned. Restaurant owners have to grow their business through a comprehensive marketing strategy, which may or may not be made up of promotions and outbound marketing. Its success is born from a sound strategy and not any one particular promotion.
There are marketing responses to slow business, but restaurants are often looking in the wrong places. So before covering our list of the most effective marketing strategies, let’s go over where restaurant owners confront problems.
Normally, a zest for promotions distracts a restaurant owner from a step by step marketing strategy to grow the business from the inside out. They don’t start with the restaurant brand and the Unique Selling Points, but instead chase customers with discounts. Rather than building on strengths, they market to compensate for weaknesses.
Of course, promotions have their place in the restaurant industry. And who can blame a restaurant owner for seeing empty seats on off-days and coming up with promotions to fill them? And sometimes, a promotion can give business a bump. On the other hand, it may make sense to dangle some carrots out just to keep open on slow days and retain your staff.
Most promotions aren’t fixes though. In particular, promoting to alter customers’ natural buying habits can cause owners to waste time and resources. You shouldn’t exert all your marketing paddling upriver when downriver gives you more for less. If you want to take promotional risks, they should be based on what makes your restaurant special.
There is no promotion to make a Tuesday night a Friday night. Almost all of these off-day promotions will not dramatically change the lag in business, and it has little to do with the marketing skill of the owner. Most promotions that do have a substantial effect are also ones that involve steep discounts or stunts, as the promotion has to provide the bulk of motivation for customers. You see the limits of steep discounting with Eatigo and Chope.co.
More conservative stock examples of this are Happy Hour, restricted use of coupons and Lunch deals. These are not bad ideas, and sometimes are defensive against competition, but they may be eating up resources. Frequently, this is throwing more money after less money.
Find the Crowds, Not the Outliers
A restaurant owner, however, should adopt the mindset of movie theaters, directing their marketing to crowds. Movie theaters have dramatic variation for different times on different days of the week (even more than restaurants). Business conditions vary in many businesses on different days of the week. It shows the relative rigidity of customer behavior and how you should not try to overpower it, but harness it for more business.
Movie theaters and restaurants share key marketing characteristics. Both may offer discounts during the week to get some business, but certain days Friday-Sunday will always attract the most business even though they may not have any promotions. People will pay more to eat when it fits their schedule.
Movie theaters spend most of their resources marketing content that will drive even more traffic at the bread and butter times. It is an industry that is constantly deploying resources strategically with employee numbers and inventory fluctuating immensely. People only change their behavior to avoid crowds and a movie at the desired movie time. Restaurants that attract crowds benefit from the same overflow.
Marketing that attempts to shift buying behavior means fighting against the forces of the work week, the school week and primetime television. It is much easier to convince someone to go to one restaurant over another compared to another than convincing someone to go out to a restaurant when they planned on staying home.
You should consider how time affects return on investment when formulating your marketing budget and developing promotions. Take for example if the restaurant is on average at 80% booked at a busy meal on a Saturday but only 40% booked at equivalent time on Tuesday. That extra 20% on Saturday may be cheaper to reach with marketing than having 60% on a Tuesday. On Saturday, you frequently do not even need discounts (unlike Tuesday), only to engage your repeat customers better.
A restaurant should position itself in the market so that it takes advantage of momentum and does not try to create demand when it does not exist. This is especially true because regular customers make a restaurant flourish year in and year out. Regulars often have routines that involve visiting a restaurant at a certain time of the week. Rather than altering your most loyal customers’ routines, focus on making newer customers regulars.
Of course, this focus means you must be confident that your restaurant, both staff and kitchen, handle a full house without any noticeable decline in service. An efficient, effective, trained, and personable staff is central to every restaurant’s success (hence working from inside out), so if you do not feel like you would go into battle with them (so to speak), you have to change your personnel hiring, training and managing approach. The feeling of teamwork is key at the times you need your staff’s loyalty most, when you cut down hours for slow period. To create this environment, you need a management team who are very good at leading personnel.
Restaurant growth is somewhat counter-intuitive. A restaurant owner should first market to fill up the entire restaurant on Friday, Saturday and Sunday (if that is the normal customer traffic pattern). Every seat from 5pm to 9pm should be occupied as if you were a Michelin star restaurant. You want to have to turn customers away and be at full capacity as long as possible.
A key mistake in the conception of promotions is that their main aim is for new customer acquisition. Instead, transforming new diners into repeat diners has a much higher return. Even when a promotion tries to attract new customers, it should be set up in such a way that customers can easily see why they should return without the promotion.
A restaurant should start with the brand based marketing, whether it is a powerful website, upgrading the menu (whether the menu items or menu design) or a freebie. Repeat customers are the engine of restaurants and a steady flow of them enables you to free up your marketing budget for the acquisition of new customers.
There is a place for promotions, especially ones that express the experience the restaurant offers. How are these promotional strategies different than current promotions?
Restaurants have limited resources so dedicate it to areas that can get the best results, not areas that are perceived weaknesses (especially if it is industry wide). It is pretty simple when you look at the most successful independent restaurants. They do not have a free seat on the big days and customers still come back. And ironically, to get a seat in this highly desirable restaurant, they end up going on a Tuesday. The rule holds: if something sells out all weekend long, you just may have to go during the week.
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