If you want to attract and retain more customers, you need to have a marketing strategy that works. But how do you market your business if you don’t know what your customers want? Veronica Johnston canvasses the marketing opportunities on offer and finds nothing beats talking to your customers first.
It’s not every day one decides to buy, grow and sell a restaurant within three years. But that’s exactly what business coach James O’Connell and his wife decided to do back in 2007. They wanted to learn as much as they could about the industry so they could share this with others.
So in April 2008, they bought a suburban restaurant in Christchurch, which had yet to hit its peak in sales but clearly had more growth potential. The restaurant/bar was located in an area that needed a local place with a consistent and solid identity.
The couple spent four weeks prior to opening, focussing on creating systems, brand development and researching marketing strategies that would attract the locals to their business – and bring them back. As the restaurant was suburban, they decided to target the customer-base within a three-kilometre radius of the restaurant first thinking the rest would probably follow.
The new Elevate Bar and Restaurant opened in May 2008 – but they weren’t prepared for the scale of interest. It felt like everyone in Christchurch was checking them out. The systems were all new and the results and feedback were inconsistent.
Knowing you only get one chance to make a good impression, James and his wife made a big effort to ask their customers what they liked and didn’t like about the new place. “The feedback was invaluable and gave us some amazing groundwork to consider what we had done right, and also what we hadn’t,” says James. “It was instrumental in getting the next step right – planning for our stage two development to refine our product.”
The locals, who had become their core customer base, said they wanted a warm, cosy pub in winter and an open, fresh bar and restaurant in summer. They also wanted the place to feel homely and welcoming – somewhere they could call their own and requested two rooms adjoining the bar be used for their parties and meetings. This customer feedback became the cornerstone for reinventing the business.
In August 2009, 15 months after they had first opened, and after an extensive makeover, the couple opened the new and improved Elevate Bar and Function Centre. The success was immediate. Sales doubled almost overnight as the business was now based on what their core customers said they wanted.
A newly-developed loyalty programme proved to be one of their most successful marketing strategies. The couple emailed an active database of around 3000 members weekly with information on events, promotions and specials. They treated their customers like friends and invited them to visit, and they kept coming back, bringing more friends with them each time.
Another critical ingredient to their success was the support they gave the close knit community. They started fundraising quiz nights which they ran at no cost. Their customers sold the tickets and kept 100 per cent of the takings, while James and his wife had a guaranteed number of extra customers in their bar on a Sunday or Monday night.
Newly designated function rooms also proved a winning stroke because they meant the couple could plan and budget with confidence knowing guaranteed numbers would turn up to parties and celebrations every weekend, even in the middle of winter.
“Having listened to our customers and created two distinct spaces meant we didn’t need to close the main bar for private functions,” says James. “Private party-goers could celebrate while locals could continue to enjoy the space that had become their home turf. With the lack of inclination to book for a table these days, we could now not only predict the ‘walk-ins’ but also use the certainty of booked functions to predict turnover.”
They also established systems to ensure that no matter who was (or wasn’t) on duty at any one time, things were done in the same way. “Customers need to know what to expect and they don’t like surprises,” says James.
The hard work paid off – James says he recently sold the business for “significantly” more than it was purchased for.
The couple identified marketing as being a key to the success of the business from day one. They sought valuable information from their core customers then used the feedback to better tailor their marketing activities to continue to attract and retain them.
“It’s about getting bums on seats,” says Steve Mackenzie of the Restaurant Association, “and really in order to do that, it requires a different mindset and a business to take risks.”
That different mindset could simply mean switching from focussing on keeping your costs down during these recessionary times, to rebuilding your business infrastructure. There’s no point ramping up your marketing activities without also ramping up your staffing levels for example.
That’s because “you’re only going to get one chance at it,” says Mackenzie. “People nowadays are not tolerating poor service or poor quality – they’re not giving people the second chances that they used to. So yes, it’s important to look at marketing and promoting your business, if you do that – and you do it well – then you’re going to get people coming back in. But be prepared – have the resources there in terms of your staff.”
Bruce Robertson of the Hospitality Association says people haven’t stopped going out. “What’s changed is that the cost of getting it wrong is much higher.” In other words, we can’t afford to let the basics slip anymore – we need to get everything right.
So as well as re-examining your staffing levels, you could be making sure the place is always clean, investing in training, updating your systems and painting over any scratches on the furniture. “When people walk in, they’re looking at these sorts of things,” says Mackenzie, “and they’re all combining and contributing to that overall experience.”
The feedback James and his wife received from their customers forced them to almost start the business from scratch again, but it also made them take a long, hard look at the basics.
Once these are under control, use the following marketing basics to get more bums on seats.
More marketing tips:
Social media tools
Social media is here to stay whether you like it or not – as Robertson rightly points out. “The new market if you like is increasingly using those tools to decide where they’re going to go. People want to be communicated with, they want to know what’s on and if they know what’s on, they’re more likely to come.”
Joining Facebook and Twitter can help grow a business, if you use them correctly. It’s all about building relationships with your followers and not falling into the sales trap of only communicating discounts and specials. You’ll get more of response if you write about things that relate to the lives of the people who follow you and involve them in conversations.
Word-of mouth
There is no doubt that word-of-mouth remains important, “but with social media it’s now word-of-mouth on steroids,” says Robertson. “So you really have to actually make sure you’re delivering consistently.”
Some say that if you’re doing a good job, the marketing will take care of itself and that it’s better to invest in staff training and ensure the product is delivered well than increase your marketing spend. “Your customers, if you get it right, will actually do the marketing for you,” as Robertson puts it. But since we all need to lift our game now more than ever, and social media can make things go viral in an instant, you might say there’s an even greater need now to get it right in terms of cleanliness, pricing, customer service and food and beverage quality.
Hooks to draw people in
Hooks are designed to bring more people through the doors, whether they’re written on a sandwich board outside your business or flashing on your website. People love a good bargain. It satisfies our deeply conditioned tendency to sometimes overlook value for cheapness. Having a budget offering is a marketing strategy that works, says Robertson. “What we’re seeing is that customers need to see a budget item on the menu to get them in the door – it doesn’t necessarily mean they’ll have it when they get in the door.”
Target the local market
If offering discounts and social networking isn’t your thing, then just take a look around you. Many forget they’ve got hundreds of people working and living near their business. So Mackenzie suggests targeting these people by dropping flyers and offering to cater for any special events for example. His message is simple: “Look local and get out and see people. The number of times I’ve walked past a place that’s empty and the owners are just standing in there waiting – go out and pull them in.”
Get in on promotions
Every little thing helps. With the promise of large numbers of international and domestic visitors during the Rugby World Cup coming up, now is the time to look for sources that will get your name in front of people.
The Restaurant Association has just helped develop a new restaurant gift card for its members, which allows consumers to buy credit to redeem in any restaurant across the country. The card will soon be available at places like The Warehouse. The association is also involved in an official Rubgy World Cup travel guide that will be distributed free to overseas visitors coming to New Zealand. The travel guide highlights each region, indicating where some great activities are and where you should be drinking and eating. The guide rolls out early next year but Mackenzie says there is still limited space available.
Get online
Many people go online to find places to eat nowadays, so it’s vital to have an online presence. But websites need to be well designed, usable and functional, says Steve Wilson of Social Eyes Consultancy. “Online marketing techniques incorporating search engine marketing, content production, social media tools, and engaging with customers are strategies that are producing tangible results for many hospitality operators.”
And if you’d rather not fork out for a website just now, you can always list your business with an online restaurant review and dining guide like Menumania for free.
Invest in better technology
Many businesses now have access to tools that streamline operations, reduce operating costs and increase productivity and bottom line profits, which were simply unaffordable in the past, thanks to the rise of cloud computing. Wilson suggests investing in customer relationship management (CRM) software such as Salesforce, email marketing through a range of online providers including Mailchimp and Vertical Response, online accounting packages which integrate with existing systems and Google applications that enable businesses to upgrade to the latest versions of productivity tools, including databases, presentation viewers and word processors – as they are all available for nominal monthly fees. “These ‘cloud’ based solutions” Wilson says, “provide an affordable and effective range of tools for all businesses to access the latest productivity and revenue generating tools, without any requirements to invest in expensive hardware (computer) upgrades.”
According to Andrew McClurg from Menumate, one of the key methods for getting ‘bums on seats’ is improving customer service and experiences and creating a loyal customer base, while at the same time implementing technology that will improve the bottom line profits of the business. “Point of sale systems and mobile handhelds are quickly becoming critical components of a successful hospitality operation because of the productivity gains and the improvement in the guest experience they enable.
The key components of ROI for most hospitality operations are the increased covers, additional increases in sales per customer and reduction in labour and stock costs. “Implementing a proven point of sale system can provide tangible business results and improved profits within a few months of deployment of the new system,” says McClurg.
With rising food and labour costs in a highly competitive industry, hospitality operators are increasingly demanding the implementation of smart technology that can improve service levels, reduce operating costs, increase efficiency and bottom line profits. Point of sale systems is one such example of this effective use of technology.
However, to get the most out of the investment, sufficient knowledge is required. With the deployment of any new technology in the business environment, it is essential that you receive the best levels of support and training. McClurg from Menumate advises ensuring you “utilise a point of sale company that has experience in successfully implementing these systems into hospitality operations, which have the ability to provide nationwide support as this will be the difference between success and failure of the POS system producing bottom line profit results for the business in question”.
Analyse the results
Whatever concepts or strategies you develop and implement within your hospitality business, it is essential that you set targets, measure and evaluate them,” says Wilson. Having access to your investment return is helpful to work out whether a marketing initiative was successful and whether it should be continued into the future. If it isn’t, that’s great as well, says Wilson. “At least you know and will able to dedicate your monetary and time investment into something that does produce tangible results for the business. The best business decisions are made based on timely and accurate data. This should never be underestimated.”
More tips for marketing success:
→ Do your research – ask the people who you want as customers what they want then give it to them.
→ Befriend your customers, have their contact details on a database and invite them to your place regularly. Twenty per cent of your customers bring 80 per cent of your business.
→ Build predictable and consistent systems to increase efficiency and profitability. Spend at least 50 per cent of your time working on the business, not just in it.
→ Forecast sales and aim high with high but realistic sales targets and share them with your team – ask for their help.
Share your marketing tips here
What works for your business?
Email us at veronicaj@tplmedia.co.nz or tweet us: @Hospitality_NZ.