During a recent RestaurantOwner.com teleseminar, Jim Laube discussed one of the most important skills any independent operator should have today: marketing. Some of you may think that marketing is a black art best left to consultants and MBAs, and there are times to bring in a trained specialist (particularly when you don't have the time to do it yourself).
Customer loyalty programs improve business, report finds. Customer loyalty is a key driver of restaurant business, according to research from National Restaurant Association.
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Nevertheless, if you are willing to apply some creativity, and set aside time to involve your staff and measure your results, you can create a grass roots marketing program that will reap tremendous rewards. In this article, Jim talks to three restaurateurs who have taken marketing into their own hands. They are Kyle Agha, owner/operator of the New Town Bistro in Winston-Salem, North Carolina; Jimmy Bornamann, who just recently sold the London Grill Restaurants in Kalamazoo, Michigan, and Edmund Woo, owner/operator of Saskatoon Restaurant in Greenville, South Carolina. The following is an excerpt of what they shared with Jim.
JL: If you could only do one marketing activity and you had to cease and desist of everything else that you do, which one would you keep doing?
Kyle: I would probably keep up my "VIP Club" or my birthdays or anniversaries because I think I've gotten more goodwill and more positive word of mouth from those two marketing pieces than anything. And I think mostly because people are so shocked that you remember their birthday, their anniversary. They're your existing customers anyway and it builds so much goodwill and, you know, I could spend $500 putting an ad in the newspaper or I could give away a lot of dinners for $500.
Edmund: I'd say it would be the database management. [It's] about building your herd and increasing your herd and working your herd so the ability to be able to segment that herd, which ones spend the most money, which ones come the most often, what types of offerings excite which segment. We "touch" our people probably every four or five weeks; with the database we're hitting them with something -- offers and promotions and new dishes. It may be wild salmon that's in season or lobster or sometimes combination specials. Of course birthdays and anniversaries are a big part of that.
JL: If somebody's starting out or hasn't done a lot of marketing in the past and they're realizing they need to start doing it, where would you recommend that they start?
Kyle: Well, for me I'd collect and reward your existing customers and keep giving them reasons to come to your place and keep reminding them to come to your place. I don't think you have to do discounts but I would start with your existing customers. Even if you don't know what to do with those names yet, start collecting them because you need them. There are forms on your [RestaurantOwner.com] Web site you can download, a VIP form that you can load, and it's very easy to do. I didn't know this when I started so you make it easy for people to do. [For example, we did] a quick promotion that [coincided] with school starting back. We did small gift certificates for the teachers for the schools to hand out. You can become involved with the schools and build a lot of goodwill and word of mouth.
Jimmy: I would say that any event that you're doing, like the teacher promotion or working with the chamber of commerce, you're pretty much trying to drive it to your restaurant. Well, once they get in the building that's where you need to agree to collect as much data as you can. You'll only get to talk to them once. So push them in your restaurant, collect the data, and then you can start communicating to build relationships and then have people back. But if you invite them into your restaurant and then you don't collect any data, you're just giving away product. It's the one-time shot, you know, it's just almost a waste.
Edmund: The one thing I would add to it is that you always have to keep a fresh eye on your concept. Make sure it stays fresh, make sure you're tweaking it, make sure that you're doing exciting things because it's still about the food and the service, and marketing all of that together.
JL: Let's get into some of the offers you guys use to get people to come in and celebrate their anniversaries and birthdays.
Kyle: Well if they're our existing VIP guest we give away a $13 entrée, I track how much they spend, how much we discount, and how many people this program brings in, and then we put it on a spreadsheet.
I have some small business card-size coupons that offer $5 off or a free dessert. I carry those around in my pocket. I might meet someone at a catering, for example, and I give them out. You can get 5,000 for a hundred dollars so they're costing about two cents each, full-color, and two-sided printing. On the backside I have my VIP form. If I'm going to give something away, when they turn that card in I want it filled out on the back, name, address, birthday, anniversary, e-mail. I'm going to get that information.
And I was just looking, those little cards -- the $5 off or free dessert -- they cost us about two cents each and on this last run we spent about $1,000 including food costs, and it's brought in $15,000 in gross revenue just from those cards. The average return is $47.36 per card.
JL: Are you marketing that to your database?
Edmund: Well, I say that the main marketing focus is to the database but we have our four-walls stuff that just might be something on the tabletop talking about it. [For example] the banner that we put up on our building a couple of weeks prior to [Valentine's Day] that talks about the romance night, inquire within. Also, in our telephone messages, when somebody calls, part of that message talks about romance night. So somebody who might not be a VIP member would still hear about it. But the bulk of the marketing is to the VIP members.
Kyle: This summer we're doing a rib night, but basically we create a promotion that lasts for a month or either all summer and on slower nights. Typically we use Tuesday night because it's during the beginning of the week and we try to get extra people out. We send out a small e-mail and then we advertise it in house through our table tents and fliers.
[We have a] "Lobster Night," and I created a story that I have a friend in Boston who would fly me down fresh lobsters every Tuesday, and I'd go pick them up from the airport. And there's been a complete lobster dinner, whole lobster with potatoes as a side, and you can get it for $24.99 a person. So we really weren't discounting anything; we were just promoting it and I think what people really liked was the story behind it.
Edmund: I think that's one thing that's really important -- what Kyle just said -- it's the story.
I think one of the tenets of the model for the independent restaurateur is that the type of people who come to your place are there for things besides just the great food and the great service. [They come because] they know the owner and they know the family and they want to be said "hi" to and shake hands, and that stuff. So your marketing sometimes needs to [include your] story. I think that's very, very important.
JL: Now, does the story need to be true?
Kyle: It's partly true. I knew a guy in Boston.
Edmund: Well, you know, it's the story. I mean everybody loves a story.
JL: How many in a typical party in an average party will come in and celebrate a birthday?
Kyle: About 2.6 [covers]. I can send you one of these cards that say bring this in and celebrate with us and you get a free entrée up to $13, and it [also] says there's a bonus: Receive a free baked artichoke dip with a party of six or more. And there's a little [message] on there that says it's much better to celebrate with friends. I'm trying to encourage people to come in with people. We have an expiration date of usually 30 days on everything but if someone brings it in, I'm going to take it.
JL: On average, how many times per year does a regular customer eat at your restaurant?
Kyle: Some customers, of course, they come to our bar and sit there four to five nights a week, and then I have regular customers who will come in and eat twice a week, pretty much. I think you really need a loyalty program to really track everything.
Jimmy: And then I get a customer who only comes in once a month. He only goes out to dinner twice a month and it's my place 50 percent of the time. Do you spend all your money on the five people at the bar and you forget about that guy? That's a tough question.
Edmund: I would say it depends a lot on your type of concept, for example.
Typically for us, somebody who comes in once a month here is a pretty good customer but, you know, we have some corporate customers who only come in once every two or three months, but every time they come in they drop a grand or two. That's still pretty steady for me and I'm working that guy pretty hard, too.
Restaurant Startup & Growth Marketing Successes: Operators Reveal How They Grow Sales & Profit In Their Restaurants By Jim Laube with Kyle Agha, Jimmy Bornamann and Edmund Woo…. To read the entire article go to www.restaurantowner.com your resource to turn your good restaurant into a great business.