An overview of restaurant marketing

The first of two articles on the subject of restaurant marketing. It examines the purpose of marketing, the difference between marketing and selling and explores some of the mathematics that reveal the costs and potential gains.

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How do you market your business? Only a small percentage of restaurants or catering companies have the turnover necessary to support specialist staff or to retain a consultant to take care of their marketing for them. The majority of business owners have to do it themselves.

One of the basic objectives of marketing is to attract new customers and repeat trade up to the point where the business reaches its operational capacity. Often there are times where trade is insufficient to justify the expense of opening; you are then faced with a difficult decision — do you spend and build trade in the problem time, or do you close?

If you decide to build up your trade there are some matters which should be addressed before you begin. First, is your present customer service of a high enough standard for you to gain new customers by word of mouth? If not, there is little point in spending money to attracting new trade until you are sure you are going to retain it. Otherwise you are just throwing your money away.

Second, are you and your staff properly equipped to make the most of sales opportunities when new customers do come to you? It is one thing getting new customers, it is another matter entirely getting them to spend their disposable money. How much money do you think exits your business intact in wallets and purses, that people would have left there if someone had made the right noises?

There are two effective ways to boost your income; you can either increase customer numbers by marketing, or you can increase the average amount you take from each customer by selling. In addition you can increase your prices, but this is not a very viable option for most of you.

Consider this: Imagine it costs you $10 to buy each new customer (you spend $2000 on marketing and get 20 new customers), and you make an average profit of $5 from each, you are not going to make a bean out of your first transaction, or your second for that matter. It is only on the third and subsequent visits that you have a chance to make a profit. If they don’t come back after the first visit, you have just lost $5!

If your business is not growing and you are spending money on marketing, you must be losing customers as fast as you are gaining them (or faster, if your business is declining). You may be working hard serving people you do not profit from. Astute business owners sort out internal standards before they spend on marketing.

Food and beverage quality, above average service, absolute consistency and the perception of value for money — that’s what its all about. Then growth becomes automatic.

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