My friend, former chef and now financial adviser to chefs Aaron Koo, says a restaurant can have a winning strategy one day yet still close down the next month.
George Moen, former president of Blenz, now co-owner of Rapid Time Networks, points out that when things inevitably get tough, there are two types of restaurant owners: those who cut costs and those who focus on sales.
If you own a restaurant, plan on tough things happening at some point, given that the hospitality industry is
- seasonal, with peaks and valleys in patronage throughout the year;
- trendy, as every restaurant wants to be the go-to destination spot in the city. (As this unofficial designation changes year to year, even month to month, however, you're better off planning for consistency); and
- price sensitive, whether it's your customers closely watching their budgets or the city pinching as many pennies as it can get, restaurants have to mind their cash flow and ensure there is more flowing in than flowing out.
Ironically, for an industry that is almost entirely customer driven (B2C), the majority of restaurants don't do marketing, don't budget enough for marketing (marketing should make up 5% to 15% of your gross revenue) and don't like thinking about marketing. They end up treating it either as an afterthought or avoiding it like Uncle Ted at the family reunion.
That's understandable of course, since many businesses, and not just restaurants, find marketing to be both bewildering and intimidating.
With the technology involved and extensive know-how required, many business owners are left scratching their heads and wondering how to market themselves. They don't know how to get their word out to the masses and create a following, even if they want to market.
It's true that new technology has been a driving force behind how marketing has changed today. Consumers' buying behavior has changed over the past three years as people are now selectively choosing to consume only information that is relevant to them at that time and ignoring everything else.
Thus, your print ads, emails, postcards, etc., are not working as effectively as they once were; there is too much competition for your customer's attention. You probably already know this.
What you may not know is that the solution to this marketing challenge can be summed up in three words: inbound (content) marketing.
Today more than ever, the two most important elements of your restaurant's marketing are your brand – why people choose you above everything elseand your website – the central hub around your brand that you can control.
When you start planning your marketing, spare no time, energy, nor expense in making sure both are done right.
After you create your brand and website, then you want to drive customers to your restaurant using any means possible and have them coming back for more. Currently, social media (Facebook, Twitter, Pinterest) is good for this, and video is becoming increasingly popular and mobile marketing is just on the horizon.
Some advice: you can (and probably should) drive customers through your door concurrently to your website being created or updated. The moment you open your doors, you already have a brand. Whether you have the best brand, however, may be a different story.
Where inbound marketing comes into play is you need to ensure that you create and publish enough content about your restaurant, through articles, press, photos, video, tweets and posts, so that you are found, either online or by word of mouth, the moment your customers are looking for you, with several touch points where your customers can engage and interact with you.
Make it a priority to continue creating content and building your brand, both on and offline, to drive new and existing customers into your restaurant.
At some point, your marketing effort will tip and everyone will know about your restaurant and want to give you a try. Congratulations, you are now a destination spot. The caveat to this is, it's difficult to predict when this may happen, if ever.
Start your marketing early.
Ronald Lee is a restaurant and small business marketer in the Vancouver area. He can be reached via his website at www.eatmarketing.com.
