It’s hard not to ask the question.
It’s hard not to question peoples sanity.
And it’s impossible NOT TO WONDER “where would my sales be every week IF everyone walked in?”
I get it, trust me, I REALLY REALLY get it!. As a company we have 500 or so conversations with restaurant owners every week. About 150 of those owners schedule a meeting. About 100 of those owners SHOW UP (yes 50 of you skip the meeting without notice, the meeting you scheduled). And about 40% of the restaurant owners say YES.
It’s in our nature to wonder WHAT IF all 150 showed and all 150 became clients. It’s our opportunistic side.
So when I say I can relate to you in this matter, I can.
Restaurants that run customer acquisition marketing campaigns know my pain. This past week I was in Virginia Beach meeting with a long time client, Dean of Firebrew Bar & Grill, and the question came up “where are the other 65% Matt ?! ”
Dean is like you, a restaurant owner wanting to drive sales and grow his top line sales and of course net profit. But when he looks at the prior 4 years of working with us he can’t help but think “what if the other 8,000 customers who opted into our marketing program walked into my restaurant for JUST 1 visit. Heck, what if 4,000 of them walked in for 10 to 15 visits. His restaurant would be double, maybe triple the size it is now and his sales problem would be GONE!
So the question comes up, why are those customers engaging in a marketing ad for the restaurant, giving us their contact information and NOT doing business with us?
At a basic level, it’s the rule of 1/3’s.
Meaning, 1/3 of these people will NEVER be your customers, 1/3 are your best opportunity and 1/3 are stuck in the middle.
Below is a link to a podcast I did on the topic that digs deeper into WHY, but in this blog I want to focus on another side of the equation. I want to discuss what makes that main 1/3 easier or harder to get.
It all comes down to 3 factors:
– Type Of Food
– Level Of Service
– Location
In episode 629 of my podcast, Restaurant Marketing Secrets, we dig into this topic a little more, CLICK HERE and have a listen to the other side of this conversation
We’ve run over 100,000 restaurant marketing campaigns around customer acquisition. I’d challenge more than ANYONE ELSE and what I’m about to cover is based on those results.
This example requires to you think a little different about the bullseye. Normally I’d show a bullseye and talk about how we are trying to build a marketing campaign to target our exact customer. But in this example I’m going to talk about how the closer you get to the center the MORE to exclude people and the harder or more expensive it becomes to acquire customers for your restaurant.
First is your type of food. If you’re a burger, chicken or pizza concept then you fit to EVERYONE! If you’re a Thai restaurant, your fit a lot less peoples taste buds. And on top of that, the Thai eater (me) still will eat at the widely accepted food categories on the outside of the bullseye. Think about it in the terms of 100 people:
– 80 to 90 of those people would eat anything in the orange area (burgers, pizza and chicken)
– 60 to 70 of those people would eat anything in the white area (Mexican, hot chicken)
– 30 to 40 of those people would eat in the blue area (Thai, Asian and other ethnic foods)
So if you’re running a marketing campaign for a Thai concept, you’re only relating to a fraction of the audience which leads to less opportunity and lower conversion rates.
Next, let’s dig into the type of service. This also ties into the price of service too. I don’t think we have to go to far into this. Based on the economics, types of service and price point knocks people out. If you’re a fast food joint everyone is a potential client, whereas a fine dining establishment is probably only going to appeal to 10-20% of consumers.
Now let’s look at location. I’ll use two examples here.
First is Shaheen’s restaurants. Shaheen works for me, but before that he was a restaurant owner for 28 years. From 2013 to 2020 when he was a client of ours he had 2 restaurants in downtown Cincinnati. Both restaurants catered to the office workers. In fact one restaurant, Simply Grand Cafe, was on the 1st floor of Great American Insurance’s global HQ. So 95% of his customers were always going to come from that company. His other restaurant was Burrito Joe’s one block away. That business had a broader range of office workers to choose from since his location was more central to other office buildings.
BUT with a location that appeals to only office workers, you lose a lot of people, which is why Shaheen was closed from dinner and on the weekends.
My second example is a former client of ours that had a fast food chicken tender concept off the expressway ramp where consumers live. This location was EASY to get to and was off the exit people take to go home, in fact it was on the right side where you turned to head home, so they had the best of both worlds. And they are located in a place where there’s also a decent amount of commerce and business traffic. PLUS people who didn’t work near the location were passing it twice per day.
Shaheen only has a chance at lunch for his downtown location typically once per week. But the chicken tender spot has a captive audience all week. Here’s the breakdown on 100 people:
– 80 to 90 of those people are around the chicken tender brand every day because they live in the area
– 50 to 60 of those people are around the chicken tender brand 5 days per week because they work there PLUS it’s an easy “take home to the family product for dinner”
– 20 to 30 of those people are around Shaheens downtown spot when he’s open.
SOOOOO with the breakdown out of the way here’s an easy way to wrap a bow around this.
If you are advertising for customers and you are a restaurant with an appealing food type, service/price point and location you are RELATING to 80-90% of those people seeing your ads. Whereas, if you’re a restaurant with a more specific type of food, with a higher price point in an urban area you are only going to appeal to 30-40% of the customers seeing your marketing.
This does two things. First, it costs you more to get the right people since you have waste on your ads. Second, you have lower redemption rates on your offers since people don’t make it to your location as often or don’t dine in that segment as often as others.
