Most restaurants are missing out on a golden opportunity to retain their customers' details and get them to come back.
The restaurant trade is, traditionally at least, terrible at marketing. The majority of restaurateurs do little more than put up a sign, hit the lights and open the door. Pizza Express, the UK’s longest established and arguably most successful corporate restaurant chain, did practically no marketing before 2001. While this is certainly not the case now – its parent company, Gondola, spearheaded the use of 2-for-1 vouchers as the recession started to bite – it does highlight the fact that even the most astute restaurant operators are reluctant to invest in marketing.
In the private sector, too, the majority of operators do little to none, relying on that most venerated of communicative tools, word of mouth. But increasingly this is not enough. Standards are high, the customers savvy. Few restaurateurs can afford to rely on word of mouth alone. “The restaurant trade is among the worst sectors in the economy when it comes to marketing,” says Nigel Botterill, founder of Explosive Marketing, a complete direct marketing service for restaurants. “For restaurateurs the issue is time. They don’t sit around in an office wondering what to do with their day — they’ve got a restaurant to run.
"If you run a restaurant you absolutely must know birthdays and wedding anniversaries. They're incredibly important - people in this country will celebrate these dates with a meal out. It's amazing how few restaurants capture this information" Nigel Botterill, Explosive Marketing
Marketing can be split into two categories, indirect and direct. Indirect is a passive strategy, taking in public relations, brand advertising, community events, articles written for publication, public speaking and posting blogs. Your message is transmitted through intervening media. Direct marketing – on the other hand – is a more exact science. Customers are contacted directly with a call to action. It should go without saying that in the restaurant trade this means getting the public to come to your restaurant. Advertising, direct mail and cold calling all fall under direct marketing.
It's all in the details
With the exception of advertising, to market directly you need your customers’ details. And the more the better – YO! Sushi has a much coveted database of over 250,000 people. There are many ways to get details, including comment cards, prize draws, loyalty cards or even as you take a booking.
It's important to remember that customers need an incentive to give up their details - they don't like giving them away for nothing. Twenty per cent off a bill as a one off hit is well worth it for a full set of a customers details. It is possible to buy email databases, but Paul West, managing director at Ignite Hospitality Consultants, a full-service marketing agency and hospitality consultant, says this is not an effective strategy. "You're better off building it up yourself. They need to be your customers. Online booking agents are another very good way of capturing data," he says.
But what do you ask? Nigel Botterill believes the vast majority of operators aren’t asking the right questions. “Obviously, you need names, emails, addresses and numbers,” he explains. "But if you run a restaurant you absolutely must know birthdays and wedding anniversaries. They're incredibly important - people in this country will celebrate these dates with a meal out. It's amazing how few restaurants capture this information."
Olivia Fitzgerald, general manager for Livebookings in the UK and Ireland, says that it's a case of striking a balance. "You don't want to ask too much or you'll put people off. A name and email address is essential, along with an opt-in for marketing," she says. Live Bookings, an online marketing and reservations service, works with partner sites to provide a realtime booking service. Customers that book are added to a database, and restaurateurs can use this data to send out emails.
"Restaurants have an amazing opportunity to do direct marketing - it's comparatively easy to get data from customers," says Sokratis Papafloratos, co-founder and CEO of TrustedPlaces. "They have people coming through their doors, they can do data capture in interesting ways. They've got information on when people came, what they ate, what they drank and what they like."
Transmitting your message
Now you have a list of customers it’s time to decide how to reach them. The consensus in the restaurant marketing world is that digital, email in particular, is the most effective communication method. The popular 2-for-1 deals that have driven business for big chains over the past year have been almost completely email based. “Email really is the method of choice at the moment,” says Olivia Fitzgerald. “And it’s likely to stay that way for some time. It’s cheap, reliable and very flexible."
Nigel Botterill believes the most important part of an email is the subject line, as this, more often than not, determines if consumers actually open the email. “It needs to be tempting,” he says. “In an ideal world you’d test what happens to opening rates and redemptions with different subject lines. Keep it short and make it clear what’s on offer.”
Jeff Scott, a consultant at www.sign-up.to, an email marketing service used by Prezzo, says capitals will get a bad result and words like ‘free’ and ‘discount’ will get spam filters excited.
There are two types of email, simple text (sometimes refereed to ASCII) and HTML. Simple text means what it says and HTML allows for a more involved layout with images. Simple text, though plainer, is more likely to get past filters – HTML emails are sometimes blocked.
Traditional mail is also popular. Marketing specialists like the idea of a consumer physically holding marketing material, and Mark Creaser, sales and marketing director at Explosive Marketing, believes they’re less likely to be ignored. “It’s on the doormat, it’s colourful. Most of our mail goes out as postcards so the recipient doesn’t have to open them. Direct mail is more expensive than email. When you send lots of letters print costs come down, but it’s important to remember that postage costs are generally fixed.”
SMS is another option. “Texts are a powerful tool,” says Paul West. “It’s most effective used last minute. If you have the right software, you could send out a message on a quiet weekday evening offering people a discount or free cocktail.”
What do you Say?
Your message needs to give customers a reason to come to your restaurant. For most operators this means discounts or a freebie. Nigel Botterill says that offers needs to be useful and relevant for customers but, as importantly, need to work for the restaurant. “Some operators sacrifice margin to get people in. That’s not a good business strategy
He uses the example of a Chinese restaurant that wanted to raise its spend per head from £27 to £30 on takeaway orders. It introduced an offer giving customers a free Coke and wontons when they
But for some operators, particularly fine dining restaurants and groups, discounts and freebies aren’t right for the market. Olivia Fitzgerald suggests promoting a new seasonal menu or special event. “You can do pretty much anything as long as it’s a specific call for action. From our point of view an offer is something that has restricted availability, it doesn’t have to be a reduced price."
Paul West agrees that upmarket restaurants need to be creative and think about their premium credentials. “You don’t want to discount. Offer a special course, a visit from the chef, or even a glass of Champagne on arrival. Instead of cheapening it, you’re making the offer more upmarket.”
Another important decision is how long the offer runs for. Nigel Botterill says offers need to be expiring in the fairly near future, typically within a month. Fine dining restaurant group D&D London does offers through lastminute.com with just a 48-hour window for redemption. “Once you start going beyond a month you start diluting your response rate, and we’ve got lots of evidence to back that up. People intend to use offers, but they put them down, forget about it and don’t come in. Furthermore, if you run offers for long periods customers stop believing in your actual prices, and you could damage your brand,” Botterill explains.
If you send too many offers out you’ll undermine the profitability of your business – people will only come when you’ve got an offer on. Olivia Fitzgerald says the ideal frequency of offers will vary from restaurant to restaurant. “It depends what sort of business you are and who your clientele are. I’d say no more than once a week or you’ll be in danger of annoying people. A company we work with analysed when people unsubscribe to emails. It found unsubscribe rates jump if you don’t email regularly, people forget you. They recommend once a month as the ideal for email alerts.”
How do I monitor my success?
The key benefit of direct marketing is that it allows operators to clearly monitor how successful a campaign has been. “Direct marketing is trackable and accountable,” says Nigel Botterill. “You know what return you’re getting for every pound that is spent – if you’re doing it properly. Direct marketing always has a tangible impact on the bottom line.”
Paul West says you can’t monitor marketing effectiveness without a key business objective, like ‘I want to fill my restaurant on Monday evenings’ or ‘I want to get people in for business lunches’.“Marketing must be there to solve a business problem,” he says. “Direct marketing is perfectly measurable. It’s imperative that the staff buy into the whole procedure, without them on board it won’t work. Motivate and incentivise them.”
Track return on investment. Set up a system and train your staff to monitor your return on marketing spend. If you do a promotion that works really well, you need to know so that you can do it all over again.
This article appears in the August 2009 edition of Restaurant magazine. Out now.