There are 2 factors I look at here to tell the story:

1st – Redemption %

2nd – Acquisition Cost

3rd – Review Rating

Review Rating

Let’s start with #3, the review ratings.  These are private reviews the customers leave after they visit.  It’s a quick survey in Messenger that is simply meant to identify bad experiences and get that to a manager, or deliver a link to Google for people with 4 and 5-star ratings.  This is important to me because the success of all marketing depends on the products you serve.  You’d think this is known by all, but we’ve had clients with 3.5-star ratings through our system and wonder why their redemption % is low.   I’m like seriously!  If these customers are giving you bad reviews, that means others have many times as well, and that in turn means the word on the street is your restaurant sucks.  So, how good, or bad you deliver your product will affect results. 

Redemption % 

#1 is the redemption percentage and this is a funny topic to talk about.  Direct mail companies have always talked about success being a 2-5% redemption rate and that was accepted by all of you.  Meanwhile, I get restaurants upset with a 10% redemption percentage.  This number is reflective of how you are viewed in your region.  It’s 100% a product of the amount of “know, like & trust” you have with the community.  

We aim to get all clients to a 30% to 35% redemption percentage. BUT, that might take 2-3 years for some restaurants.  I can tell you with absolute certainty that if you reach a consumer in your neighborhood who looks like your other customers and you give them a high-value offer, say a free burger, and they don’t take you up on it, YOU HAVE A BRANDING ISSUE!  

But not all is lost.  This isn’t a huge deal, it’s just a sign that you need to keep putting irresistible offers in front of the people around your restaurant and retargeting them with other content that pushes them over the hump.  I’ve personally had offers for businesses around me that I’ve not used for 12 months.  The timing isn’t right, I forget, I’m not sold yet, etc.  There are many reasons people don’t take you up on your offer, but the #1 reason is typically that you’ve not made a compelling sales pitch for them to.  You might have given me a free pizza, but am I going to drive past my regular spot to give you a try?

Acquisition cost

Now let’s talk about how much it’s going to cost to acquire customers and why this number is typically much lower than customers realize. I say this number is much lower because of the lifetime value of customers.  

Now I’m not going to get into profit from this SINGLE visit by your customers, because that’s not how you look at this.  But it’s pretty damn easy to see that you just funded next month’s ad costs with the profit from this $2,170, it’s a freaking no-brainer.

The VALUE with these 100 customers is their future visits. Here’s how I see that going for most restaurants

– 30 will be one and done, they won’t come back anytime soon

– 50 will become occasional customers, visiting 5 times per year over the next 3 years: 15 visits x 50 customers = 750 visits

– 20 will become hard-core customers, visiting 15 times per year over the next 3 years:  45 visits x 20 customers = 900 visits

So this restaurant stands to gain 1.650 visits at $21.70, which is $17,175 in sales.  

So you just gave out $500 in free food (your cost) and spent $344 and got close to $20,000 in sales with the first visit and the following 3 years.

How it WORLD are none of you freaking doing this?  I just don’t get it. 

BUT WAIT THERE’S MORE

 

IN CLOSING

All three of these restaurants have a story of their own and every restaurant’s marketing journey will be different.  

Restaurant #3 has solid results due to it being a heritage restaurant in their community, but weak everywhere else.  They also have new owners who are starting to do more, and if they stick with that, this 20% could be 40% within a few years. 

 The #2 and #3 are strong brands, but they are just now laying their foundation.  They are newer brands that the masses don’t know about.  The word-of-mouth marketing hasn’t had time to take hold and they’ve not advertised enough to build their following.

As I’ve said, acquisition marketing is 100% a product of their brand strength in the community and it’s just not there yet.  So it’s all about taking a strategy like this and sticking with it along with what we’ll talk about in tomorrow’s blog. 

Tomorrow we discuss the funnel these customers are, or should be put into, so they follow a very specific marketing path catered to their journey with the restaurant.  

MP OUT