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How to Boost Restaurant Sales and Increase Customer Loyalty
As a restaurateur, your greatest expense is not your staff or your rent or your food bills – it’s the big number of consistently empty seats that are going to bleed you dry. So more than anything, your top priority as a restaurateur is to keep those seats warmed up.
While profit margins in the catering business is relatively big, running a profitable restaurant doesn’t just involve serving good food. In fact, it’s been demonstrated that you can serve mediocre food and still reap massive success if only you have a brilliant marketing strategy – just look at McDonald’s.
Sadly, many restaurateurs go into business thinking about everything else but the marketing plan. They fret over the food supplies, the kitchen appliances, the interior design, the staff, but they don’t spend enough time on strategizing how exactly they are going to consistently attract (and keep!) customers.
What You'll Learn from this Article
Because you’re reading this, I’m assuming you’re a restaurant owner/manager looking for ways to increase sales. I'm going to give many tips and ideas about how to exactly do this in a series of hubs, but in this article I'm going to give you just one powerful, simple, ridiculously cheap way to:
- Boost your sales consistently
- Keep your phone ringing off the hook
- Be the FIRST restaurant to come to mind when your customers think of eating out
- Give your customers compelling reasons to keep coming back
- Turn your customers into loyal customers and your very own army of salespeople
- Be the talk of the town on a regular basis
That’s right, all of these are achievable just by doing one simple thing. In fact, it’s so simple it's hardly believable why there are still very few restaurants that practice this. But first, I want to briefly go through one of the most common mistakes that you should NOT be doing.
The Problem with Advertising
When restaurants struggle to fill empty seats through word of mouth alone, what do they do? They advertise. They advertise without planning, and without a clear strategy. Their ad campaigns end up being a desperate, shortsighted attempt to inject cash in the business.
But it never works like that.
Advertising has its advantages when executed as part of a sound, well-thought out marketing plan. The problem is that it's rarely used properly by restaurateurs:
- Advertising has to be used as part of a bigger marketing plan. The problem is that it’s almost always used as the sole method of attracting customers. It’s just like trying to walk by using one leg alone - it’s ineffective and pointless.
- When restaurants advertise, they usually do it by running print adverts on local magazines and newspapers, buying expensive radio airtime, hiring workers to hand out leaflets to random passers-by outside the restaurant, etc. The main problem with this happens when the effectiveness is not measured at all, so restaurateurs rarely have solid figures showing actual return on investment (ROI) from these campaigns. If you don’t know how much sale each campaign produced, then how do you know which campaigns are worth doing again, and which ones are worth ditching?
- When restaurateurs buy advertising space in a magazine, the ads are usually done without clear sales targets and goals. If you haven't been doing anything else that had won your target audience's trust over time, do you think they will pay attention when they see your name in an advert?
- Many print ads are haphazardly put together by someone from the restaurant who has no idea about sales and copywriting.
If you’re guilty of the above mistakes, you’re not alone. Far too many restaurateurs do these practices, which, if you think about it, are rather insane.
Understand that there are three factors that affect the bottom line of your restaurant:
- The number of customers coming to the restaurant
- The frequency of the customers’ visits
- The amount of money customers spend per visit
So in order to increase sales, you need to:
- Acquire new customers regularly
- Ensure existing customers come back as often as possible
- Upsell to people already eating in the restaurant.
Therefore you must focus on implementing campaigns that affect one or more of these three factors. The method I am going to discuss with you here affect all three.
Here’s the step-by-step action plan:
Step 1. Build Your List
From now on, you must endeavour to gather the following information about every customer you come in contact with:
- Full name
- Postal address
- Email address
- Occupation(do they own a business?)
- Special dates like Birthdays, anniversary dates, etc. (very important)
It will later become clear WHY, but for now I’d like to discuss the many ways how to build your list:
a. Produce Incentives
People nowadays are very reluctant to give their details so they need compelling reasons to do so. You can easily get round this problem is by offering incentives in exchange for their details. But before you do so, find out first what appeals most to your customers by asking them.
Common offers are “2for1 on Main Meals”, “Get a Free Appetizer” “Free Dessert”, etc. If your target audience are families, giving away “Kids under 6 Eat for Free” vouchers could motivate them to take the family out to dinner.
Now, if you really don’t want to give away free stuff, there’s another way to offer your customers attractive incentives without costing you a penny. But first, because you object to giving away free meals, there are a few things you need to understand before we can proceed any further. (If you are perfectly fine with giving away free meals, just skip this section and proceed to the next section, “Joint Ventures”)
If you object to giving away free meals as incentive to your customers because you think this is a costly price to pay just for the sake of obtaining their personal details, you need to understand that:
- When a customer redeems a gift voucher for a free meal, they usually come with at least one other person, so you’ll still make profits from the drinks, desserts, and meals from that table. So there is more chance of earning money than losing money by doing this.
- Gift vouchers motivate your customers to pay you a visit even when they don’t really have immediate plans to dine out. When this happens, they are going to create reasons to convince their friends or family to go dine out with them, thus acting as salespeople for you.
- When they convince friends, relatives and family members to go with them, chances are some of these people haven’t been to your restaurant before. If you do a great job of impressing these new customers, you just bagged yourself new, (and potentially loyal) customers.
So you see, when evaluating whether or not a marketing investment is worth doing or not, looking at the potential return on investment over the long term is more relevant than looking at the short-term marketing expense.
b. Joint Ventures
Another way you can obtain free gift vouchers is by doing joint ventures with other businesses that offer goods complementary to yours. For example, let’s say your restaurant attracts young, trendy professionals. You can get a local trendy salon (because they are targeting the sort of people who eat at your restaurant) to produce gift certificates offering say, “free cut and blow dry for every colour treatment” or “free manicure and pedicure for every cut and blow dry”. You can give away these gift vouchers to your customers to incentivise your customers to give their details to you, and at the same time you help the salon obtain highly targeted, new customers.
You can see how this arrangement is WIN-WIN-WIN: the salon is happy because you just helped them gather new customers for free; Your customers are happy because you got them a deal that they find absolutely useful; You’re happy because you're growing your list and in the eyes of your customers they get way more value from you compared to the other restaurants!
You can also use Joint Ventures to get the salon to distribute your gift vouchers to their customers. When these customers redeem the vouchers, get their details. This way, you're instantly tapping into the big customers base of another business, with very little effort or risk!
c. Your Website
If you have a restaurant website and it doesn’t have an opt-in section somewhere, you are underutilizing your website by not employing online marketing strategies. Rather than having a mere "brochure website", transform your website into a lean mean list-building and marketing machine. Your website must be a part of your overall marketing strategy.
Use your website to compel people to go to your restaurant. Offer incentives that are attractive enough for your customers to want to give you their personal details, and then email them regular updates.
d. Train Your Staff to Ask
Train your staff on how to give away the gift vouchers and get your customers to fill out the forms with their information. Do this as much as possible.
e. Say it with Words
One way to make this really easy is to produce a one-page printed leaflet that says something like, “Would you like to receive exclusive offers and FREE gifts and discounts? Sign up for our mailing list. Just fill in the details....”
When the customer asks for the bill, just stick this leaflet over the bill so the customer doesn’t miss seeing it. When the waiter comes over to give the bill to the customer, they can sweetly coax them into filling out the form by enthusiastically elaborating what sort of wonderful offers the customers can look forward to if they join the list.
Another way is to print a message on the receipt itself. TGI Friday is doing this. Allocate a portion of the receipt for a noticeable message that says, “Log on to www.ourrestaurant.com within the next 7 days and claim your free gift!” Again, when the staff hands the receipt over, they must make a point of drawing the customer’s attention to the message.
Yet another way is to have a prominent sign communicating the same message. Place your message where customers are most likely to see them, like on posters in the bathroom, on a restaurant board, on paper placemats, on napkin holders, at the reception area, or right where the cash register is.
Step 2. Manage your Customer Data
The best way to handle your mailing list is to use a tool called an Autoresponder. There are many you can choose from. An autoresponder will allow you easily and safely manage and store your customer’s details without having to worry about backing up your files or worrying about losing your customer data.
Step 3. Send Love to your List
Now that you have got your list, you can now communicate with your customers whenever you want (but don’t contact them too often and using hypey language or they will unsubscribe). Ideally you have gathered at least 2500 customer names within 4 to 8 weeks, but any number is better than nada.
Now here’s the money-making part. Here are some fantastic ways to generate more sales by using your customer list:
Here’s how you can make someone’s birthday a happy day for you both. Every week, check your list and watch out for upcoming birthdays. One to two weeks before someone’s birthday, send them a special printed postcard via email or the post, greeting them a big warm “Happy Birthday!”, giving them a FREE GIFT which they can redeem at your restaurant. Of course, invite them to book their birthday party at your place.
If they haven’t booked within 7 days, give them a courtesy phone call or email or text message to personally greet them a happy Birthday (and follow up about the birthday party booking).
On the day of their birthday, send them another message.
By the way, make sure the birthday postcard has three things:
- Subtly branded, well-designed and conveys the right image
- Contains a heartfelt and sincere birthday message from you and/or your entire team, and
- A Birthday GIFT
Make sure the gift you offer fulfills three requirements:
- It's absolutely, positively, irresistibly enticing. Make it very difficult for your customer to refuse. If you’re just planning to offer them a free appetizer, forget it.
- It encourages the customer to book their birthday party at your restaurant, and it encourages them to book a huge party.
- It’s redeemable within a narrow period of time.
You can apply the same principle to Businesses in your area. Send businesses regular messages that will entice them to use your restaurant for every event or meeting they organize.
Get creative! Send businesses lunch menus. To liven up your quiet Monday evenings, send them a "Happy Monday" postcard (i just made that one up) - where you encourage them to go straight to your restaurant after work on a Monday evening, and you have something cool going on like a live Jazz band (whatever it is, be sure it suits your audience).
You can apply the same principle for other occasions like wedding anniversaries, business anniversaries, Mother's Day, Father's Day, Thanksgiving, Christmas, etc.
So let’s say that out of the 2500 names in your list, there are 250 people celebrating their birthday for the next month. This mailing cost you $250 or 1 buck per postcard including postage.
You send a postcard to all these people offering them a free 2 or 3 course meal as a gift if they book their birthday party at your place. Let’s say this gift is going to cost you $10. Your total cost so far per taker is going to be $11.
Now, if only 5% to 15% of the 250 took your offer, that’d be between 12 to 37 celebrants booking their birthday party at your restaurant per month. That'd be an extra 3 to 9 birthday parties per week that you'd generate from this campaign alone.
Let’s say that each of those celebrants only had 4 other people with them in their birthday party, and each of these parties only amounted to $150 per table.
If you do the Maths, you'd see that:
If 5% took your offer = 12 x $150 = $1800 per month
If 10% took your offer = 25 x $150 = $3750 per month
If 15% took your offer = 37 x $150 = $5550 per month
You can easily generate an extra $1800 to well over $5500 per month, every month - from birthday bookings alone.
Take note that these are conservative figures as our projection didn’t take into account the potential big group bookings and the repeat business that will come out of each booking. We also haven’t factored in the sales that will be generated from the Wedding or Business Anniversary campaigns, which you could run simultaneously with the Birthday campaign.
Plus, imagine the pleasant feelings your surprise gift will generate in your customers. Do you think they will mention your nice surprise to other people? Absolutely.
And what do you think their friends and relatives will think of your restaurant? Do you think they will be impressed? You bet!
Be a Hero
When someone books a party in your restaurant, offer to help them. Organizing the logistics for a party is such a cumbersome task for many people. Be a hero and offer to take the weight off their shoulders.
Do they need a project manager to organize it for them? Do they need invitation printed out and sent to their friends and family? Do they need to find a magician or superheroes for Little Donny’s 6th birthday party? Do they need clowns and balloons and toys? Or for Christine’s 15th birthday maybe it’s a live band she’s after?
You can make this into an extra income stream by referring your customers to the services they are already looking for, like invitation card suppliers, magicians and entertainers. Make advanced arrangements with trustworthy entertainers and agree to refer them to your customers in exchange for a fair commission. If you do this, also offer to give commissions to all the entertainers you know. Tell them you’re willing to pay them an equally good commission is they persuade their customers to book their gigs at your place!
Goodbye Quiet Days
When you have built your list, you can easily conjure offers and then get the word out immediately to the appropriate subscribers. Run a campaign once a month designed to address specific customer profiles. Solve quiet Mondays and Tuesday evenings by creating Special Meal Deals or events on these evenings.
For example, why not run a Singles Evening every first Friday, a Couples Evening every second Tuesday, or a Family Evening every first Monday. Run these events with the appropriate attractions. Have a Jazz Night during the couples and singles evening, have a quiz and games show during the family evening.
The possibilities are endless and the beauty of it is that you can get as creative as you like and you can get the word out instantly to the target audience!
If you think that doing all the work recommended here sound complicated, difficult, and time-consuming for you, outsourcing these tasks could prove to be a wise move.
Outsourcing has many benefits if you hire the right people. It will save you time; it will save you money; you produce the best results because you're leveraging your resources; you focus on things that you do best while you let the marketing experts do what they do best. Just contact me if you want to discuss more customized ideas so that you could apply these tactics to the unique needs of your restaurant.
To reiterate, building your list is absolutely crucial to the success of your business because it allows you to:
- Be the FIRST restaurant to come to mind when your customers think of dining out, and most especially when they are celebrating their birthdays, anniversaries, business functions, and other special occasions
- Give your customers compelling reasons to keep coming back
- Turn your customers into loyal customers and your very own army of salespeople
- Be the talk of the town on a regular basis as people spread the word about your briliant service, thoughtfulness and generosity
Again, the tool I recommended for listbulding is AWeber, and if you still don't have a compelling website, go to Easisell.com
What it really is all about is learning how to leverage your existing resources so you get maximum results from minimum effort. Outsourcing some of the functions you are not particularly skilled to do could benefit you more than if you tried to do these things yourself.
Did you find this hub useful? You can read more articles about online marketing strategies by Marj Galangco by visiting her Easisell website.