Three Simple Steps to Improve Your Restaurant Marketing

OK, ready? Here we go…

So sit down, pour yourself a cup of coffee or tea, and before you go over your records and make an inventory of all your monthly restaurant marketing expenses. You may want to create your computer or write down on a piece of paper a table with the following columns:

If you have some restaurant marketing investments where you pay quarterly (or yearly), allocate the proportional part to the month.

For example, let’s say that you send a restaurant coupon every quarter and you pay $3,000 each time that the coupon company mails your coupons. You are spending $1,000 a month in restaurant coupons, so write that down.

Make sure that you cover all the expenses. Include also free restaurant marketing that you may be doing now. Just enter 0 as the Monthly Amount.

Based on the monthly amount, you will calculate two totals:

If, however, you don’t like computers too much, you can still do this exercise by hand.

For each investment, you must ask yourself the following question:

Can you track the results of this restaurant marketing investment?

If the answer is YES, then you can proceed to Step Three.

If the answer is NO, then there are only two things that you can do:

1.- Make it trackable if you can.

2.- Cancel it if you can’t.

That’s it. It’s that simple.

So how can you make a restaurant marketing investment trackable?

You can make it measurable by adding a component to your restaurant marketing that your prospects need to bring to your restaurant to get a reward.

For example, let’s assume that you spend $1000 a month in magazine ads promoting your restaurant. However, you really don’t know how many people come to your restaurant because of these ads in the magazine. What can you do?

You can change your ads and include a restaurant coupon with a discount or a freebie (a free dessert, a free glass of the house wine, etc.). Then tell your servers to track and keep all the coupons that come in this way. After this, you can proceed to Step Three.

Never place an ad that you can’t track. It is just a waste of money. For the same reason, if you are investing in a restaurant marketing campaign that you can’t track in any way, just cancel it. It is not worth it.

Now, we can proceed to the final step.

You must look at the restaurant marketing investments and answer the following question:

Is this restaurant marketing investment profitable?

Do you make more money from this restaurant marketing investment than you spend on it?

This is easy to calculate. You know how much money you are spending a month in this campaign. You also know how many people the campaign brings you a month, because you are tracking the results. Now you just need to do some easy math:

PROFIT = TOTAL SALES – TOTAL COST

Let’s assume you paid $1000 dollars for a monthly ad in a local newspaper. For this ad, you’ve collected 20 restaurant coupons in one month. You have to take into consideration that 20 coupons would probably bring you more than 20 people.

Let’s assume that the average party size per coupon was 2 people so these 20 restaurant coupons brought you 40 customers.

Also let’s assume that your average sale per person is $30 (including food and beverages), and that you are giving a 10% discount of the total bill in your coupon. The cost of your food and beverage is one third of your total, so for this sale of $30 is $10.

So here you have the formula again:

PROFIT = TOTAL SALES – TOTAL COST

Calculating the Total Sales can be very easy or more thorough.

If your servers staple the restaurant coupons with your customer’s tickets (and by the way, you should ask them to do this if you are not doing it now), you can just add the totals.

If you just want a rough number, you can simply multiply the number of people that came because of your restaurant marketing campaign by the average sale per person.

In our example, the Total Sales would be: 40 customers x $30 = $1,200

Now let’s calculate the Total Cost.

TOTAL COST = MARKETING COST + DISCOUNTS + COST OF GOODS

In our example, the MARKETING COST = $1,000 (that we paid to the newspaper).

If you track your results, you could go to the detail level and see exactly how much discount you gave to each party who brought a restaurant coupon. However, you don’t need to be so specific. You can just simplify this operation by averaging.

In our example, we are discounting 10% from an average sale of $30; this means you are discounting $3 per person. Since we brought 40 customers, we discounted a total of $120.

So, our DISCOUNTS = $120

Don’t forget that you still need to add the cost of your food and beverages. You can also get an average for this number. In our example, the average cost of goods per client was $10.

Our COST OF GOODS = 40 x $10 = $400

Our TOTAL COST would be now: $1000 + $120 +$400 = $1,520

As you can see, the cost of this campaign is quite expensive. The question is: Are you making any money?

We are ready to calculate if you made a profit. Remember the formula?

PROFIT = TOTAL SALES – TOTAL COST

In our example, PROFIT = $1200 - $1520 which is the negative number -$320

As you can see, we would be losing money in this example, but you need to run your own numbers to obtain your own PROFIT.

1.- If this number is positive, congratulations, you are making a profit from your restaurant marketing investment.

Keep on doing this restaurant marketing investment.

2.- If the number is almost zero or with a very small loss, you may still consider to keep this restaurant marketing investment since these customers could become regular (we’ll call them clients) and bring you more profit in the future.

3.- If this number is negative (as in our example), cut down your losses.

Stop wasting your money in this restaurant marketing campaign immediately.

Do this exercise with each of your current restaurant marketing expenses. Very soon, you will end up with ONLY restaurant marketing investments that bring you a profit. Even if you just break even, this is good because it means that you are bringing to your restaurant new customers that you can convert into clients.

I hope you enjoyed this article. In my Restaurant Marketing Strategies book I explain many techniques like this one to help you increase your marketing results exponentially while still saving money. You can get the printed version from Amazon.com or Barnes & Noble or the Electronic version (PDF format) by clicking on the links below.

*If you are still undecided you can find more information about my Restaurant Marketing Strategies book and check the complete Table of Contents by clicking on this link:*

Restaurant Marketing Strategies Table Of Contents