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.
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.
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
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.
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 successful database
marketing promotion has 6 major components.
1. The person to whom
it is sent.
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:
2. The offer you make
to this selected audience
- Your current
customer is your best possible source for immediate and profitable
- 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.
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
3. The special event
You can make a special
event out of almost anything. Valentines Day. Mothers Day. Flag Day. Back
to School. And countless other opportunities.
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.
4. The creative process
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
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.
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.
5. Communication inside
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
6. Track the results.
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.