Marketing 101

On How Happiness And Money Are Related

Dan Gilbert presents research and data from his exploration of happiness — sharing some surprising tests and experiments that you can also try on yourself. Watch through to the end for a sparkling Q&A with some familiar TED faces. Dan’s talk also will help you understand a few pricing strategies I have been trying to insert into your thinking. Namely, why discounting doesn’t work, why you should give catering clients multiple package offers, etc…Great stuff!

Dan Gilbert’s Bio.

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Strategic Thinking for Tomorrow’s Restaurant Business Operators Today

We can disagree about when things started to go wrong, but the one thing we can all agree on is that the way you perceive and think about your business, needs to change if you are to either start, or continue to build success long term. The days of “you build it and they will come” have gone – if they were ever really here to begin with (another debate for later).

What is necessary now in operating a food service business today is the need to think, plan and act more strategically than you ever have before. To ask more complex questions and find deeper, more long term answers than you have probably ever done or felt the need to do.

So based on this notion and the work I have been doing with my most successful clients through this economic tumult, I would like to propose some areas with which to start.

1. Realize that you have to think long term continually and not short term constantly. You have to begin to take a long hard look at your business and determine if there are parts of it you need to let go. Is your catering business really giving you’re the ROI you need or was it just something that you thought could compliment your dine-in success but really hasn’t? Do you really need to hire a GM in order for you to focus enough on having the conversations and doing the work necessary to drive your future success? Is it time to get some help with your marketing or to fine tune your concept to help guests (and yourself) really understand who you are (in your guests perception not yours) and what it is you need to offer (versus what you want)? And to whom you need to offer it? Do you have that business plan (marketing plan?) that helps guide you on a daily basis or is it just something gathering dust on the shelf? Are you just flying by the seat of your pants, reacting to things that happen to you?
2. Prepare to do battle. People’s fears over the economy and for some, the realistic need to cut back on spending isn’t going to subside tomorrow. What do you need to do today, tomorrow and the next day, to not just deal with it but to take advantage of it by reconfiguring your business to succeed in spite of it? How can you decrease your breakeven point instead of just cutting costs on a shift-by-shift basis as you encounter things you can do without? How do you configure your service and pricing models to add value to the guest experience in a more creative and innovative way that guest’s respond positively to, without further decreasing margins or diluting your brand? How can you heal the damage already done so that it doesn’t become a weak spot moving forward? What hiring, retention and coaching processes need to be begun, changed or done away with entirely in order to be able to change your culture as deep and fast as necessary in order to achieve long term success?
3. Start to look at what your market will look like in 6 months – a year – two years from now. How will you fit into it? Will you? What do you need to do now to make sure you succeed in such a market? Are you keeping track of trends? How can you get better at it? Can you improve your networking with the right business minds in your community and market to be able to pick up on unmet needs or opportunities that you need to take advantage of? If you were to open your restaurant 6-12 months from now, would it be the same one you have now? What would you change? Why? Why not now? Will your competitors be the same or will you encounter others? Do you have a plan to constantly and holistically reevaluate your business in order to keep ahead of everyone else? What do you need to do to take the next step and become the trend setter yourself?
4. Develop your game plan now. Stop looking at labor, food, rent and training as costs and start to look at them as investments in your success. Measure them as diligently as you do your financial returns and scrutinize not their need but their effectiveness and begin to demand more accountability out of yourself and your staff in reaching your goals. Create a marketing plan that allows you to be able to measure results more efficiently and effectively and that creates the seamlessness and momentum, necessary to make 2+2=5, or 6, or even 7. What can you attack structurally, that can yield you better returns? Shouldn’t you revisit that lease to make sure it reflects true market rents given the economy and occupancy rates today? Can you afford to still pay prices from years ago? Have you kept up with demographic shifts in your market? Do you need to move your business to better reflect your proximity to your target market? Do you need to revamp your pricing, menu, production or service processes to be able to add more value to the guest experience you offer?
5. Be more calculating in your risk taking, but don’t become risk averse. Are you making smart purchases that reflect true market pricing or are you still paying for someone else’s mistakes? Are you renegotiating your vendor agreements to take advantage of lower prices?  Are you rebidding those agreements? When is the last time you reengineered your menu? Is now the time to open that next location in order to consolidate and expand your marketshare? Or to take advantage of your competitors misfortune? Are you capitalizing on your past success by leveraging your credit levels and terms? Is there any investment you can make to leverage your knowledge of your market or your streamlined operations and gain market share external to your existing business? Is it time to open that BBQ business to capture an altogether different market than your upscale full service venue?
6. Prepare yourself to change with your change. Are you keeping up on industry trends and best practices? Are you devoting enough time to growing yourself in order to be the best you can be in order to help those around you be the best they can be? Are you investing in your “A” players enough so that they continue to see you as the only place they would ever want to be? Are you trimming the “C” and “D” level talent form your ranks in order to improve not only your operations but your effectiveness as a leader? Are you raising standards instead of lowering them? Have you purged your business of any “just getting by” or “just surviving” thinking and actions? Or are you continuing to subsidize million dollar mediocrities?

Simply reacting to your circumstances may have allowed you to keep up so far. This isn’t true anymore. The competition on the other side of this purging will be fierce; any decision to maintain the status quo will only end in disaster for you and your business. Be proactive by developing your strategic thinking skills and put them into action to help you build a better business and a better life for yourself. You deserve it.

If you are going through this change and need help, give me a call.

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Driving Guest Loyalty In An Economic Downturn

Yeah, yeah, another article about the same stuff to do in a down economy. Not really. I’m as fed up with them as you are - trust me, probably a lot more since they really don’t address anything that really matters. But this time I was reading, “The Importance of the Customer Experience in a Down Economy” and could not get past the introduction without my brain kicking into overdrive with references for our business.

Hopefully most of you have already completed your budgeting for next year. If you have - or have not - ask yourself this question. “Is every single line item in our budget guest focused?” Are your goals for the FOH and BOH guest focused? Does every single conversation you have in your operation all day, every day, have someone asking, “How does this impact our guest experience?” before the final decision is made, or tactic executed? Are your line checks, pre & post shift meetings, interviews, vendor conversations, etc., guest focused?

Unless everything that goes on and/or is talked about in your business does not have you asking “How does this impact the guest?” you can’t be successful long term.

This has to be more than lip service. You have to develop the “guest focused” culture in your business so ingrained in the minds of your front line staff, that taking care of the guest is first nature - that the notion of being guest focused is the only thing they think about. And so much so, that they can make any decision about a guest experience because they have the vision of what it means to provide it, vividly in the front of their thinking.

How do you do this? Where do you start?

You start by taking the “Outside In” approach. By looking at everything you do though the eyes of your guests. Start arriving, leaving walking and talking as if you were a guest and not the operator. What do you see? Hear? Smell? Think? Feel? as you move through your business?

1. Map each and every guest touchpoint and try to create value added components with greater emotional appeal.
2. Be sincere.
3. Use the season for inspiration.
4. Ask your guests how they feel then kick it up a notch above that.
5. Forget about upselling and scripts, actually listen to your guest. Have an honest-to-goodness real conversation for a change! And don’t talk to me about not having the time, or that it takes too much time to talk to your guests because YOU are busy!
6. Dedicate yourself to walking the floor every shift to touch every single person you can - staff and guest alike.
7. Don’t forget that your staff are guests too!
8. Use the talented and vibrant personalities on your staff to help others who are not as animated, develop a better sense of experience creation at the table.
9. Do something unexpected on a consistent basis. Surprise yourself!
10. Do “random acts of gratitude” for guests who you see in your dining rooms or in your drive-thus on a consistent basis but forget to even recognize and just take for granted that they’re there every day.
11. Do #9 for your staff too!
12. Forget the “frequency schemes” and do something for each guest that is relative to their LTV (lifetime value). One of my clients has a guest that orders from him 2-3 times a week - every week and never stops talking to people about how great he thinks my client is. So for a “reward” we bought him a an authentic NFL leather team jacket of his beloved team ($150) and put a card in the inside pocket, signed by every staff and manager thanking him for his support - and we included a $25 gift certificate. What do you think his reaction was? Do you think he is going to use some coupon he gets to some other business?
13. Listen to your guests more. Improve you and your staff’s level of communication. I can’t begin to tell you how often I see and hear staff and managers talk rudely to guests. They interrupt their sentences. They talk over them. They reach in front of them. They walk in front of them ( the guest always has the right of way - even if you have a tray full of food or dishes!). They use bad language or the improper use of language in their monologues. Make eye contact when you address a guest. Never make them make the first move to acknowledge you!  Why have 3-4 “hosts” at the door and not one can seem to open a door for a guest? Or invite them back in a personal and meaningful way? This list could go on for pages but you get my meaning. We have to start talking above a 5th grade level to people and act like we were taught some basic manners!

This level of guest focus leads to innovative guest experience strategies and tactics > which creates loyal guests > while differentiating yourself in your market > and ultimately building a more successful business.

This process leads to the “value added”.

If you want to do this and get stuck, call me, I’ll help you.

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Reader’s Questions

QUESTION: Our company has opened frozen and read to eat meat products in various parts of the town. Please advice how to increase the sales, we are doing local store marketing by distributing menu flyer in the shopping mall and to the surrounding area. We have ace quality products……………I am training my staff to upsell……………..how should I boost sales in my area…..please advise something amazing.

MY ANSWER: Need more information here.

1. You have opened stores? Or you are selling your products through other businesses?
2. What are you doing to market your products right now?
3. How long have you been selling your products?
4. What kind of products?
5. Who buys your products? The consumer or other businesses?
6. Do you do direct sales through salespeople? Or do customers shop, browse and buy in your stores?
7. If you have stores open, what kind? Stand alone? Kiosk? Inline mall?

———- FOLLOW-UP ———-

QUESTION:
1) we have products from our own kitchen and own slaughter house.
2)We have done one month ad campaign with Local FM Radio and a couple of ad/banners at bus stands. Distributing menu’s at busy markets by hand to people and delivering menu to the close locality in their mailbox.
3)4 months
4)raw chicken, boneless chicken , cold cuts(salami, ham, bacon, mortedella etc),semi cooked snacks, marinated meat products.
5) consumers. end users, local people , household clientele ,working people. Restaurants/caterers do not buy from us as they buy it at very cheap from local butchers.
6) yes we do direct sale through sales people who have trained for their jobs with enough product knowledge and upselling skills. We  have a display freezer , people see ,select / we suggest and then we pack and give them.
Few of our products are ready to eat, so we have oven/microwave installed at our outlet and we heat them and give them as required by the customer. People who buy product once from us do come back as we have ace quality products…………getting new customers/capturing the market is a problem as our prices are a little higher than other shops but we have the best quality and best customer service………….u can say 5 to 10 cents more than other shops.
7) stand alone 3 stores at different parts in the town.

Please suggest a strategy that should do wonders to our business in terms of sales.

My Answer: You don’t come up with a strategy without having intimate knowledge of the products, the market, the business, the competition and the talent involved. There is no “Marketing Strategy For Dummies” book that you can pull off the shelf and open to page 16 to find out what you can do. You do not appear to understand marketing and how your business can achieve the necessary points of differentiation in the minds of your customers.

1. Service does not set you apart. I guarantee you that your service isn’t better.
2. Quality is in the eye of the beholder. If you’re the only one saying so, then it doesn’t matter unless the market has enough customers who think you do. Your job is to define specifically what that quality difference is and communicate that to your market to the point of getting them to buy from you.
3. Stop the ad/banners. They won’t work. Is that really the place that people will think about buying your product? And will it be a banner that sells them? People buy because someone they trust recommended you to them. Work on getting better word-of-mouth first - building loyal customers who will talk about you endlessly.
4. You sell commodity products. You have to define what the value added is to buying your product over going to a grocer or butcher or a dozen places that sell the same thing you do for less.
5. You need to sell to restaurants if no one else is. You have to come up with a value added method of both production and sales to convince them it would be in their best interest to buy from you. This could be your quality story that could translate for them into higher menu prices and margins.
6. Upselling is not an avenue that produces the results you need. That’s yesterday’s news. No one wants to be sold, they want to buy. You have to give the customer a better reason to buy from you.
7. 5 - 10 cents is not enough difference to be losing business on. Find ways to innovate your processes and sell at least at the same price or better and add the value added component to help drive share and sales.
8. I would not have chosen the stand-alone model. There is way too much overhead and if your lease’s total occupancy costs or debt payments are not below 8%, you will have a tough time making any money no matter what you do. Given that you may not be able to move, I would suggest you look for ways to reduce both.
9. You need to look for venues to sell your product that most people wouldn’t think about. Holiday gift baskets, businesses, cafeterias, fairs and exhibitions, caterers, professional Chefs, internet sales (do you even have a website?) perhaps even a broadline vendor such as Sysco, or US Foodservice, etc…through branding of your own line of products.
10. Lastly, you need a professional to help you develop your unique marketing strategy - or at least help you define your basics (demographic and psycho-graphic data). Throwing a bunch of bad tactics after others when they have no relationship to one another or to an overall strategy won’t cut it.

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Is Restaurant Marketing Broken?

A colleague asked this question in one of our forums recently and it has been haunting me ever since. So I must get this out.

Is restaurant marketing broken? - Yes
What exactly is it that’s broken?

1. The understanding of what works and what doesn’t work for restaurants. Retail strategies do not work. Most of everything I read from “restaurant marketing gurus” is based on some notion that:

a. you must discount in order to either maintain your market position or to simply survive,

b. you have to use their product/service in order to take advantage getting in on the cutting edge of    some great marketing revolution/revelation which really isn’t.

c. value is the same thing as price.

d. relationships are not as important in building loyalty or that loyalty is defined by the dollar amount of what you offer in some frequency scheme.

e. the only way you drive trial is by giving away your margins and your market positioning.

2. That chains set the example for everything. Independent make up the bulk of all food service operations in the U.S.. Chain strategies are based on increasing short-term transactions. Independent strategies must be based on increasing long term relationships.

3. Independent operators usually do not have the experience, resources or the expertise to successfully market their business.

4. Most operators suffer from some type of coupon/discount addiction.

5. Most marketing problems are based within the businesses operational weaknesses - and those stem from a lack of strategic thinking.

6. The ability to differentiate yourself and build guest relationships lessens the more you utilize a technology based marketing strategy. Social relevance is what’s important.

7. Operators still have not grasped the extremely important idea that you must know who your guest is and what they value in their relationship with the business.

8. Most operators believe it is somehow noble to go down with the ship than to ask for professional help.

9. That past success is a high indicator of future success.

10. That change = innovation. Most of the change I see can simply defined as substituting one bad tactic for another.

11. Fear still rules more than excited opportunism.

12. Most operators still have not grasped the concept of Branding.

13. Tactics without a comprehensive marketing strategy never work. Or the wrong tactics with the right strategy doesn’t work or the wrong strategy with the right tactics won’t work.

14. That people will pay for value - even now - and do not necessarily want a lower price.

15. That the recession is the reason to blame for a lack of success. All the recession has done is purge our ranks of bad operations and bad operators.

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More Effective Restaurant Marketing

Yes there is a silver lining to every cloud!

1. Everyone is cutting back on their advertising (most think falsely that advertising is marketing).
2. Because there is a lack of advertisers, the cost of advertising, across all channels, is rapidly falling.
3. If you have a marketing message that is relevant (something more than the next, great value deal!) there is much less noise to crowd it out of the minds of your guests (think mindshare) and therefore it should be easier to communicate to them more effectively and efficiently.
4. Research shows that businesses that continue to market themselves (or even increase their marketing) even during recessions perform better in the long run. In a McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which either maintained or increased their levels of marketing during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that marketed themselves more aggressively during the recession had sales 256% higher than those that did not.
5. Price is only a factor if your core marketing strategy is based on consistently low prices, i.e. Wal-Mart.
6. Messages that address the value of your guest experience over others who concentrate on commodity pricing consistently win both margin and share.
7. Continuing to add to the level of consumer fear in your marketing just so you can talk about how your “deal” is what’s best for your guest’s pocketbook, makes no sense. Keep the message positive and focused on the value added.
8. You cannot continue to try and differentiate yourself from your competitors and then send out the next batch of coupons, BOGO’s and 2-for-1’s.
9. If you can feel the price sensitivity in your guests, does it honestly make sense to continue to use your marketing to justify your pricing strategy? Or should you choose a different message?
10. If you’re in a higher end market, you should be emphasizing the emotional appeal of your experience to your guests.
11. Don’t dilute your hard won brand equity by “going cheap” or decreasing in any way the value your guests feel for their experiences with you. Just the opposite. You should be looking to increase the value of the guest experience at every touchpoint.
12. Just as it is more expensive to go after new guests rather than taking care of the ones who make up your core business, so it is with “mindshare”. No longer talking to your market because you have cut back on your advertising is like excusing yourself from the conversation and letting your competition do all the talking. Guess who your guests will remember when the downturn is over? Guess how much more expensive it will be for you to try and recapture their interest? Why wouldn’t you want to be on the other side of that equation?
13. Don’t forget that your best marketing strategy involves running a great operation. Never forget the basics.
14. Positioning is a tremendous opportunity right now. If you can position yourself in your guests mind that you have their best interests in mind, you will win. Hint: you can’t do this by decreasing your experience value.
15. Segment your guests and stop sending out the same piece to everyone. Not all guests are the same so why do you market to them as if they were?. Aren’t you really growing the seeds of your guests resentment of you?
16. Have you looked at what channels your guests are utilizing to receive their information and communicate with each other? Is it still direct mail? How many of your guests are on LinkedIn? Facebook? MySpace? Twitter? Are you really trying to build your email database and capture their social media preferences as well?

To find out how RCS can help you develop a more effective marketing plan, call us for a free consultation at 877-535-2324.

For more on marketing your restaurant visit our Marketing page here and join us and dozens of other operators over at RestaurantMarketing101.com.

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Restaurant Marketing In A Downturn

My last post dealt with an very broad approach to your business overall during a downturn. Now let’s talk about a few things that address marketing your business in a bad economy.

1. Know your guest. Who is your core guest in your target market?  Is this who you truly want? Need? Should you be targeting a different market? How price sensitive are they? What is selling and what is not? High margin items or low? Why? If you can’t answer these questions, you are in for a much rougher ride.
2. Put the focus back on families. If your business includes a family component then realize that families pool resources and hunker down together so specifically targeting them with offers and products that hold superior value compared to your competition, will get you more business. If you do not have a family focus, maybe you should have?
3. Roll out new menus and items. This is the perfect time to revamp and renew your menu offerings to create buzz and keep your concept fresh in the minds of your guests. It’s also the most cost effective way of innovating your business to help sustain momentum. Don’t forget to look at signature items, daily specials, limited time offers, etc… to drive buzz. Also, if you took a menu price increase to offset rising costs - and you should have - do not roll back those price increases, thinking you will drive more business. What if costs go back up? Can you afford to keep your guests on a pricing roller coaster? Accept the new pricing levels and reconfigure your business plan accordingly - your guests have.
4. Look for ways to add value to your large check business guest. Do you have a business credit program for area businesses to charge lunches for its employees or catering and pay for it over time? A gift card/certificate program for them that offers increased value with their purchases? Is it time to start delivering in order to set yourself apart? What are you going to do/offer different for seasonal events or corporate functions? How will you market it?
5. Continue to look for ways to cut the fat out of your operation without cutting into the meat of your concept that can hurt the guest experience. Use this savings to address the opportunities to reward high LTV (lifetime value), loyal guests more.
6. Make sure you are executing the basics on an “every guest, every table, every day” basis. Maintain and stress your core values of service and excellence to ensure great guest experiences. Coach your staff at the point of action to help drive home the appropriate level of urgency and thinking that is necessary to make great decisions and build the best culture in your business.

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A Bad Economy Doesn’t Mean Stick Your Head In The Sand

I’ve been trying not to post a “Top X# of things to do in this bad economy” list because we simply don’t believe you should do anything different than you should have been doing already, i.e., create a sensible marketing strategy that focuses on long term growth and then execute that strategy in terms of present day opportunities and challenges. The economy is just one variable in that equation and should not be given any more weight just because the media makes everything sound like the end of the world as we know it. (If it was a great economy and you suddenly found yourself facing a doubling of the available seating capacity on your market - what’s the difference?). Focus more on what you can do to take control of your own destiny and leave the things you can’t control out of your head.

But the clamoring for it is never ending and I’m now starting to read and hear a lot of crap from people who have no clue, so here goes…

1. Don’t panic! It really isn’t the end of the world so stop acting like it is - laying off staff, focusing on cutting costs to the bone, putting a hold on all marketing activities, etc… Now is the time to work smarter and harder while everyone else is cutting back.
2. Take a look at your marketing plan to see if you can do more of anything that will help you solidify existing guests (It costs 5 times more to get a new one than to take care of an existing one!). Look for ways to add value to what you are currently doing. Can you innovate any of your processes or offerings to add value to your guest experiences and therefore build better and stronger guest relationships? How can you reward loyal guest more or better?
3. Look at re-engineering your menu to ensure you are making money and not losing it. This includes making sure you are not squeezing your margins just to hold the line on prices. People will pay you for a perceived value or they will pay you for a commodity product. Which do you prefer?
4. Absolutely, positively DO NOT DISCOUNT! This is the quickest way to ensure you won’t have a profitable business in the future. Becoming a commodity, screwing your margins and diluting your Brand will not help you in any way. Guests will not understand why you charged so much to begin with and will come to expect lower prices in the future - if you have one.
5. Deliver spectacular experiences in order to build a foundation for creating better and more loyal guest relationships! Service is the defining point of value for every single guest. Coach your staff at the point of action to create a better service culture.
6. If you need help, now is the time to ask for it! Push yourself and your business to do more and take control of your own success instead of simply sticking your head in the sand and hoping it all balances out in the end. I’m in the business of making more money today than I did yesterday. I’m not in the “balancing it out in the end” business.

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Seth On Creating Tribes

Seth Godin on Tribes via Mixergy from Andrew Warner on Vimeo.

Seth on Creating Tribes MP3

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5 Thoughts On Guest Loyalty

1. Loyalty is all about building relationships and the emotional experiences that build and solidify them.
   
   
2. Experiences are built on increasing trust and adding value at each guest touchpoint while at the same time increasing the emotional appeal of that touchpoint and consequently the guest relationship.
   
   
3. You can’t buy loyalty through frequency schemes or discounts - period!
   
   
4. When you embark on a guest loyalty initiative(s) your only competition becomes yourself. This is innovative and differentiating.
   
   
5. Focus on increasing the emotional appeal of your existing touchpoints and then look for ways to add more to more touchpoints by mapping your processes and touchpoints.

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