As the number of restaurants continue to increase, and alternate sources for prepared food multiply, food service industry saturation has become a serious problem for restaurants.

Over the last 25 years people have been eating out more frequently than their parents or grandparents did. The population has been growing...the number of places available for dining has been growing even more rapidly.

In 1970 there were 17,231 people per fast food outlet; in 1985 there were 8,432 per outlet.

In the mid-1980s there were 845 people per full service restaurant. By 1990 that number had gone down to 685...today it is approaching 600. Lots of competition!

The same implications are applicable for other retailers as they are for food service. To grow, most restaurants have to identify their niche. And then use marketing to obtain customers and retain them.

They are increasing their market share mainly at the expense of their competitors - competitors who are not doing customer relationship marketing.

Customer Relationship Marketing - or DataBase Marketing - is a rather recent innovation for retailers generally and restaurants specifically. Until just a few years ago restaurants appealed to a mass market. And were marketed in that manner.

As more and more places to eat out have become available, full-service dining has become specialized. Restaurants appeal to specific and particular groups of diners. That, and the high cost of mass media, have created a change in restaurant marketing strategy from mass marketing to very specific target marketing.

Full-service restaurant chains who know who their customers are and learn from them what they want are successful. They increase market share by building databases of their customers... and then talking to them as customers.

They don't spend money up front getting them in the first time...and then spend money again getting them in the second time. They already know their customer. They invite them back again and again at a much lower cost. And, at a much higher profit!

The vice president of marketing of a national full-service restaurant said the demographics and lifestyles of his customers are similar regardless of the geographic location. That very well may be so. At the same time, as a restaurant ages its customers will age, too.

The winning restaurant (and other retailers as well!) will invest in the future by finding ways to bring in new customers. And work to keep the average age of the customer about the same.

This automatically means their overall customer base grows. And, their total volume grows, which allows them the opportunity to be more profitable.

Marketing is certainly more than advertising and promotion. Marketing is hospitality and salesmanship and service and making the customer feel good. Making the customer feel this is "my place". It's a place where I like to come and I like to bring my friends and family.

Marketing and customer service are inner-related. Just as frequency and loyalty are inner-related.

During the last decade and a half marketing promotions have become a major part of restaurant promotions. The mix of advertising to gain awareness and marketing to build a database and keep the customer is now "accepted".

Even those organizations who are not using what direct marketing calls a database, recognize the power marketing and Customer Relationship Marketing have when you do build a database.

A successful database marketing promotion has 6 major components.

The person to whom the promotion offer is directed must be the right person. They must be the person most likely to respond. The promotion must be directed to the correct person at the correct address...and if possible, personally addressed.

The best mailing list any organization has is its own customers. Because they are most likely to read and respond to any promotional offer you make.

A customer list also gives you the opportunity to identify key characteristics of those customers. And to be able to clone them by selecting other individual and specific names, according to that criteria.

An interesting additional benefit of Customer Relationship Marketing is that it allows you to use what you know about current customers to find new customers.

What we are saying here is that:

1. Your current customer is your best possible source for immediate and profitable business, and
2. those most likely to become new customers are those who are most like your current customers.

The offer is what motivates customers to respond. A promotion will be more successful if you offer something the recipient wants or needs rather than what you may wish to sell.

People know what they want and need. In making an offer do not try to change their habits. The objective should be to get as many responses as possible by fulfilling the customers needs.

An offer directed to your current customers can be weaker than an offer directed to prospective customers. Less incentive is needed to motivate a repeat visit than is necessary to motivate a trial visit.

Generally, promotions should be redeemable over several weeks. Don't make it too short...or you'll lose. On the other hand don't make it too long...or there will be no incentive to respond.

Most promotions should offer an added value. Such as a bottle of wine, desert, a sweepstakes...some incentive to stay with you. Some incentive to return to you. Some incentive to try you.

Our experience in the restaurant business is that these incentives do not decrease the perceived value of your product. They do not decrease the average guest check. In fact, in most cases the guest check average remains the same or increases... and the average number of guests per visit increases.

Experience with our major clients over the last dozen years shows that multiple mailings to your audience (at least 4 times a year and as many as 8 times within 12 months) does NOT cheapen your image. Or in any way degrade your position in the marketplace. Quite the opposite happens...your customers appreciate the fact that you recognize who they are and specifically invite them back.

You can make a special event out of almost anything. Valentines Day. Mothers Day. Flag Day. Back to School. And countless other opportunities.

Customers birthdays and anniversaries are personal and unique to that customer. They work because they are personal. In most cases birthday offers out draw any other offer made. Why? Because more people go out to eat on their birthday than any other single day of the year.

Other offers that you might include are anything "new". If it's a restaurant it might be a new menu. Or a new manager. Or an anniversary for the restaurant. Or anything that gives you a reason to let your customers know you would like to have them visit you again.

It is obviously essential that you get your recipient's attention. As in all direct response marketing the creative process is an art . . . not a science.

For most retail sales and specifically for restaurants, the message needs to be clear and simple and easy and brief. It encourages action and it does it quickly.

The graphics should be clear and to the point. Support the restaurant. Support the theme. Support the idea. The graphics should make the copy and the offer blatantly clear.

We live in a visual world. And we live in a color visual world. Anybody under the age of 40 has grown up in a color marketplace. And anybody over 40 is so use to it that everybody expects it. Use graphics and visuals that gain attention and help maximize the understanding of your message. Of your offer.

People buy benefits - not features. People buy What's In It For Me. Make sure your offer is clear and quickly communicated. People need to know why you are sending this message to me and what I'm suppose to do with it. And how I'm going to be better for doing it.

Obviously, personalization is more likely to be noticed than not. Because you are building a database and know the names of your customers you should be personalizing your message to them. If it's reasonable, it should even be signed by the sender.

Since you are going to be going to your audience on a frequent bases, you might consider a "series" of contacts over the year. That have a theme. That are color coordinated. That are the same size or shape. In other words, you need to think your creative through from the beginning.

We have all experienced having heard or read or seen an advertising message. And gone to the retailer to take advantage of the offer. And come upon a group of people who had no idea what we were talking about. This is not good.

Everyone who has any contact with the customer needs to know about any special event and any promotion that is going on at any time.

You need to make sure all of the team who have contact with your customers know what you are doing. You need to get them involved.

You need to communicate to overcome any problems that might occur in service or sales. You must make sure these people who are communicating and touching and being involved with your customers know everything there is to know about your promotion.

Our experience has been that employees can relate to promotions. And the more they know about it the prouder they are of it. The more they will participate with it. The more successful they will be. And, the happier your customers will be. The more likely they will be to return because they've enjoyed a pleasant experience.

It is absolutely imperative to know what happened. You need to have all the numbers. And relate all the numbers to money. Not just costs...but also profit!

In addition to accounting, marketing must aid in tracking and tracing results. This means the local retail outlet must coordinate and cooperate. If you are on-line it will be easy to do. There may be some hand work. It really doesn't matter...what matters is that you know what works. Because when you know what works - then you also know what does not work. You repeat what works and you eliminate what does not work. You learn from the process.

I'll close this article with a bit of philosophy. I really don't believe in failure. I don't think there is such a thing as a marketing or promotional failure. Because I believe that every program teaches us something. There is no such thing as failure...there are only lessons.