A large restaurant company will have a book of rules which is so thick that no one is able to remember page 234 or what is supposed to happen every 89 days on leap years. The restaurateur with one or two locations may not have a rule book which leaves the staff with no direction and no expectations.
you follow these three simple steps, you will be well in your way to
see dramatic improvements in your restaurant marketing. So after reading
this article, I would suggest you to take action and put this in
OK, ready? Here we go...
TRACK ALL YOUR RESTAURANT MARKETING EXPENSES
is often a painful but essential process. It's painful, not only
because it takes some time and energy to do it, but also because you
will soon realize how much money you are really spending (and perhaps
wasting) in your restaurant marketing.
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:
Expense Description: Make sure that you give it a descriptive name so that you can identify the expense by just reading this field.
Vendor: Who does this marketing for you?
Vendor's Phone number: To contact them in case that you want to cancel or change a recurrent expense.
Frequency: One Time Only / Monthly / Quarterly / Yearly
Monthly Amount: We will be tracking all the marketing expenses on a monthly base.
Now fill it out.
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
Make sure that you cover all the expenses. Include also free
restaurant marketing that you may be doing now. Just enter 0 as the
Based on the monthly amount, you will calculate two totals:
Total Monthly Expenses: You will add all the expenses from each vendor, to come up with the average total monthly expenses.
Total Yearly Expenses: Just multiply the average total monthly expenses and you'll get your restaurant marketing yearly expenses.
would recommend you to use Excel or any other spreadsheet application
to track all these restaurant marketing expenses. This will make much
easier to play with the numbers later on. You can also easily change the
size of the tables and modify the fields.
If, however, you don't like computers too much, you can still do this exercise by hand.
TEST YOUR RESTAURANT MARKETING RESULTS
armed with your freshly updated restaurant marketing list, start from
the top, and review each of your restaurant marketing investments.
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.
ANALYZE THE RESULTS AND ELIMINATE THE RESTAURANT MARKETING THAT DOESN'T WORK
So now that all your restaurant marketing efforts are trackable, what can you do?
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.