Marketing strategy

Restaurant and Hotel marketing is art not a science. There are several components of successful strategic restaurant marketing. While not an all inclusive list, the following represents a helpful overview:

Restaurant Branding
Restaurant & Hotel branding is what customers, employees (Internal Customers), vendors, the media and all other key constituents come to expect in dealing with your restaurant. Brand-building is sealing the space between what the brand promise and the brand execution. A strong brand has clear alignment between the promise and execution. Restaurant branding has its own world, however it is essentially the alignment between your name, identity and then the consistent delivery of your overall product.

Restaurant & Hotel Positioning
Positioning is often an under leveraged component when marketing a restaurant or marketing a hotel. Positioning is where a brand ‘positions itself’ within its market and relative to the competition (the cheaper choice, the higher quality choice, etcetera). Effective positioning involves incorporation of the brand’s Unique Selling Proposition (U.S.P.). The USP is the one thing that only the brand can claim. It’s a point of differentiation that the competition either cannot, or does not claim. Possibly the most well documented example is Burger King versus McDonald’s. If Burger King can convince you that a flame-broiled burger tastes better than a fried burger, they’ve won the war because McDonald’s will never go into all 14,000 stores and rip out fryers to install char-grilling pits. Other positioning statements may include “never beaten on price’ or ‘freshness guaranteed’.

Test the market (or Due Diligence)
Success when marketing your restaurant or hotel rarely happens immediately. Effective restaurant marketing should be created on a foundation of fact and knowledge about the market, the competitors, customer base, Internal Customers, financial history, marketing history, the industry, food trends, outside forces that will impact your business. Most importantly you need to understand your own business, its levers and its crutches!

Restaurant & Hotel Marketing:

Menu Mix
As specialist Restaurant Marketing Consultants, we recommend that every six to twelve months, clients conduct an analysis of their menu. This will include profitability analysis and a competitive restaurant menu analysis. To keep your menu fresh, relevant, and profitable. Clients must know specifically how each item on the menu is performing and also how it stacks up next to the competition. Consider each item on the menu as a tenant leasing space and it has to earn its right to the space it rents.

Restaurant Training
Restaurant marketing, human resources, operations and training are inextricably connected. It has been said that great restaurant marketing will kill a bad operation faster. That’s simply because if you drive customers to visit your restaurant, and then they have a bad experience, they will feel cheated, and are less likely to return than if they came out of their own doing, not to mention that more customers are being subjected to an unfavorable brand experience. Training is a vital component of restaurant marketing for this reason. Training is ongoing and certainly is not just a quick show around and review of the restaurant menu. A robust ongoing training program is required that constantly improves and evolves your staff competencies. We always recommend to include a restaurant marketing component in training programs so that the staff become ambassadors to help build sales.

Key strategies to increase revenue for your restaurant or hotel:
Restaurant & Hotel Marketing: New Guests
These are first-time customers buying from you for the first time. They will establish their opinion of your brand and offer during this first purchase and decide what percentage mindshare to award you in the future. Encouraging first time use is most expensive of the four sales-builders as acquisition costs are typically 7-10 more costly to execute than the other sales builders. However, it is impossible to increase frequency, check average or party size without customers to start with.

Restaurant & Hotel Marketing: Regularity of Visits
Regularity is generated by developing enduring relationships and loyalty among customers. While it is rare to disagree that regularity is important, an alarming number of businesses fail to appropriate the needed mindshare and resources to developing successful programs. Consider that the average Starbucks loyalist purchases a coffee 5 days a week. If Starbucks can get this group to purchase just one more coffee in a week, they’d add 20% to their sales.

Restaurant & Hotel Marketing: Check Average
In this instance we are referring to per person check average – the amount each guest or customer spends at purchase. Check averages can be built through price increases, suggestive selling programs, effective internal merchandizing, and through add-ons or upgrades to name but a few techniques. Caution needs to be added when deciding on a cohesive strategy in this area, as alignment with the brand’s positioning must be kept in mind – for example a high end steakhouse should not be offering a Buy One Get One Free promotion!

Restaurant Marketing:
Party Size As the name would suggest, Party Size refers to the number of people in each party. Do customers primarily visit alone, in groups of 2, groups of 5 or more? Whatever the number, it is key to devise programs that encourage customers to bring more of their friends with them for each visit. Examples of programs include: Kids eat free, birthday clubs and refer-a-friend tactics. Encouraging party size turns customers into advocates and enlists them as another tentacle in the brand’s sales-building team.

How much to spend on Restaurant & Hotel marketing?
Typically a restaurant or hotel should allocate 3% - 6% of sales to restaurant marketing. It’s also wise to allocate this money proportionally to your sales volume. For example; if August is the busiest month, the proportionate amount on the business marketing budget in that month. It is not uncommon for companies to look at slow periods and think that’s where the marketing dollars should be spent, so a large chunk of cash is spent trying to build say a happy hour business and forgo building on the busy periods. Fact is, there is a reason people aren’t coming in from 4:00 PM – 6:00 PM and valuable marketing dollars will be lost trying to build this period. There are nearly one million restaurants in the United States and probably only 2% of them are busy from 4:00 PM – 6:00 PM. Restaurant marketing can’t change behavior; it can only influence existing behaviors.

Local Store Marketing and Neighborhood Marketing – does it work?
This is the marketing philosophy that seeks to build competitor proof relationships with customers without a reliance on mass media advertising. Panera Bread and Starbucks have both built their business utilizing this marketing strategy.

The Next Idea is a huge advocate of this type of marketing, as it focuses on relationship building within the community, which affords both loyalty and recognition.

Differentiation
Differentiation is the singular component that can add enormous marketing value to any business. The term ‘Differentiation’ is just that; the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as one's own product offerings. It is plain to see who wins in this area – no one has matched Coca Cola’s Coke product, neither has anyone matched Apple’s computer technology. These brands have succeeded through careful differentiation, (and clever positioning).

The fact that restaurant marketing is not easy is part its competitive advantage

Effective restaurant marketing isn’t easy. It takes a lot of careful research, analysis and testing. It’s also ever evolving, which makes it even more difficult to master. The most difficult part is that restaurant owners are in the restaurant business, not professional marketers. But don’t be discouraged. It’s not all gloom. The fact that effective restaurant marketing is difficult to master is what can give you the competitive advantage. Resist the temptation to change everything at once or to go it all alone. You can start small and build your marketing competencies over time. In the beginning, do simple programs so you can execute them well and measure the results. And if you’re not sure if your current marketing is working, save your money until you can prove the dollars invested persuade customers to buy more and buy more often.