I have always wondered why the marketing workshops we run are the hardest of our training courses to sell, given the amount of money I see wasted on inappropriate marketing and advertising in our various media. It seems many hospitality operators think they already know how to market their businesses, when they are really throwing considerable amounts of money away.
Marketing should always start internally in your business, by getting your service, selling skills, product and environment right. If you don’t face reality and objectively measure your customers’ perceptions, you can easily fall into the trap of spending huge amounts of money buying new customers to replace the ones you have lost by not operating your business to a high enough standard.
Start by facing facts: How much have you spent on marketing and what real growth in sales (excluding price rises) has it yielded? If you haven’t grown why are you spending the money? It is particularly important to understand that in a very competitive market, if you are an average business — not delivering an above average customer perception — we classify you as ‘the crème of the crap’ — the best of the worst, in other words. You are not going to woo customer loyalty from other businesses by being average. Our industry is growing faster than its customer base, and the only way you can grow your business is to steal customers from a competitor.
You also need to realise that you are unlikely to make a profit from a new customer because they walk in owing you money. You’ve spent money to get them there and they have to pay this back before you make a profit from them. If they only come once, because they weren’t impressed enough to change loyalties from their usual eateries you have squandered an opportunity.
There is another question you need to consider. If you win new customers are you properly prepared to maximise the opportunity by efficiently selling to them and maximising your customer average spend? How much money is walking out your exit doors that would have been left there if your staff had made the right noises?
These are all issues you need to deal with before external advertising will work for you, and this can take some time. To summarise, first get your product right and then tell people about it.
Moving along, you need to carefully analyse your business trading patterns and be able to identify times when you are trading at a loss. For instance, many hospitality businesses trade poorly on Monday and Tuesdays and this cancels out much of the profit from Wednesday and Thursday, so you only end -up profitable for three days of the week. If you were to advertise these businesses generically, with untargeted advertising (‘Hello we are here’), you would tend to get customers when you don’t really need them, on Fridays and Saturdays. Your first objective is to eliminate loss periods.
Next, you need to find out what your trading radius is — this is the area from where 90% of your customers come. This is very important to establish otherwise you will tend to waste money by communicating to people who are unlikely to come to you because they are too far away. An example of this would be a suburban restaurant with a trading radius of 5 – 7 km advertising in the daily paper, which is charging a great deal to spread you message state wide. Cost effective marketing should be concentrated within the trading radius of a hospitality business. You can establish this by purchasing inexpensive mapping software and asking you customers for their postcode.
Then, following a path of logic the question of ‘What is the most cost effective way of reaching the type of customers I want, within our trading radius?’ There are many choices; you could use direct mail, email, signage, social media, public relations, print, directories, etc. depending on your type of business and the skills available to you.
Finally we come to the message on your advertising. You are probably trying to sell food and beverage — great — but potential customers are unlikely to respond to you entreating them to come and eat. They have entirely different needs to yours; they want to seduce, or conduct business, engage socially, mark a special occasion, relieve the tedium of cooking at home, learn about food or wine, etc. The most effective advertising messages concentrate of the benefits of coming to your establishment, and are not directly aimed at meeting your immediate needs for customers.
Now, I’m glad I got that off my chest . . .