In the past, I have emphasized creating value for customers as the heart of restaurant marketing. Customers makes decisions in much the same way as businesses do, by weighing the expense (normally money and time) against the experience (food, service and atmosphere). Now the phrase “creating” value is a little misleading. No restaurant (by itself) changes what we value. Unlike when we were compelled to eat from the school cafeteria, Americans have options and we try new things because we want to. Therefore, adapting to your customer rather than expecting your customer to adapt to you is the wise course.
You need to assess what your customers already value and provide that to them. At first, it may seem simple. Customers want all the same things: great food, reasonable prices, exemplary service and a pleasing atmosphere. But “great,” “reasonable,” “exemplary” and “pleasing” are words that are vague at best and if you consider the relationship between the four desires, it quickly gets complicated. And they can mean many different things to different customers in different situations. This makes feedback important (checking Yelp at least), but that is not the only way to analyze the situation.
Defining Great Food, Reasonable Prices, Exemplary Service, Pleasing Atmosphere As Best We Can
I’ll cover the basics first, which involve the givens: food, service and atmosphere. Promotions most times deal with price/monetary value in how they capture the customers’ attention and then motivate them. But as returning customers are much more valuable than new customers (who frequently are the target of promotions), unless outside the norm, price does not power a restaurant to steady gains nor losses in business. No matter what you charge, nothing erases a bad first experience.
A Breakdown of What Great Food Is
Here’s a method to analyze and figure out about what your customers’ want. Of course, owners of new restaurants will take this in mind, but every restaurant owner should periodically think about their restaurants head to toe. Otherwise, you will miss new opportunities and insights that influence success.
Let’s start with what does “great” food mean? You have to consider how much does quantity play a role (this is interrelated with price of course). Pay attention to your customers and their appetite. Do all customers finish their meals? Spend a couple days looking over the plates after they are brought back into the kitchen. If say over 80% of your customers ate everything in your restaurant (for a sitdown dinner), you may not be providing enough food. Although it may not determined every customers opinion, they think about the value of the food (quantity and quality) against the price.
Next let’s come to your customers taste buds. What do they cook at home (go to their grocery store)? How ambitious do you think customers are in their home kitchen? How ambitious do they want to be? I’d say successful restaurants fall into to two categories, but different demographics have different preferences. I’ll speak generally about it so we can cover most situations.
Building Your Menu Around Your Customers
In my opinion, customers go to restaurants looking for something comfortable or the exotic, which should be reflected in the branding.
Comfortable restaurants give customers what they expect (or “what they feel like” ). Many times customers don’t even need to look at a menu. In all areas of the US, comfort restaurants are American, Italian, Pizza, Mexican and Chinese (notice how all of these have fast food chains). In some areas, especially urban, you may add sushi, Thai, Indian, Middle Eastern and Greek/Turkish, but they are exotic to large swaths of America. The comfortable takes the majority of business. This is the reason why Chinese restaurants in America do not resemble the diverse taste of food in China, but an American interpretation. Even in San Diego, most of the Mexican restaurants also were a poor representative of Mexican cuisine. Of course, you may try and bring the authentic cuisine to Americans, but in much of the country that is risky (especially in the suburbs and country). Let’s not over glorify true authenticity. When it comes down to it, Americans need restaurants that aim to comfort customers, while giving a wide range of choices. In a marketing sense, these restaurants’ word of mouth is often based on an extraordinary dish. (“best General Tso Chicken or Fish Taco in town”).
The exotic restaurants are on the other side. [I am leaving out foreign cuisines that serve primarily immigrants. Exoticism here is like eating at home.] For example, I had no idea what Ethiopian food tasted like until recently. Mongolian food always baffled me. Spanish food and French food have always been hard to pin down (even though I have been to many restaurants). Brazilian food, although one of my favorites, I couldn’t describe exactly what it tastes like. Caribbean foods also have an exotic quality. The list is much longer, and include many localized cuisines. If customers are open-minded enough to come into these restaurants, they are customers who aren’t ruled by their expectations. They ask questions of the waiter. They want to try out a little of everything. They are at your disposal. And it gives a kitchen more freedom (although it should not operate independent of feedback)…..For these restaurants, word of mouth is often based on the entire cuisine. (“I know this excellent Korean restaurant you have to try”)
The restaurants that try to be exotic and comfortable put themselves in a strange spot, where half the menu is predictable and the other half unknown. If they do succeed, it is normally in the suburbs or quasi-urban. This can be dangerous, as customers looking for comfortable foods wander into unexpected tastes, and those looking for the exotic find something rather ordinary. Of course, you have to ask what drives the customer to your restaurant and build your menu around them.
Now this can be done with atmosphere and service, but let’s get onto what promotions normally concentrate on, which is price.
Is the Food More Valuable than Your Customer’s Wallet?
Most promotions are deals. I think there is an overemphasis on price-related deals (rather than creating an experience). Making a promotion something to-do is much more memorable and sociable. However there is a place for price-related deals, even though it is a tight rope act.
The point of these kind of deals is to be targeted. If you discount everything or consistently, customers question the value of the item and ask if you are overcharging at the normal price. In general, even having weekly drink specials on certain days can just drain off other days when customers would have come. Monday should always be slower than Friday. There is no reason to throw away money on it.
Now a general rule for deals is that they should be the motivator for customers coming to your restaurant, not what their concentration is when they get there. If they focus on the freebie or discount and don’t notice other things they like, you haven’t built a relationship with the customer.
Here’s another way to look at it. There are deals that make you chose to dine out. And there are deals that make you chose a particular restaurant over another. Deals so dramatic that make you dine out are unsustainable, and steal the show rather than your actual restaurant. These kind of deals make a mockery of the quality of your restaurant. Now, if you have a deal that encourages a customer to chose your restaurant over another, that is successful.
The point is that you don’t want to lower the bar too low. You want to lower it just enough so that customers are willing to get in the door. Anyway, a bit of effort commits them. This is the commitment that Groupon doesn’t do. You are almost getting a free lunch , and customers know it. Also, a targeted and limited deal features one of your strong points (margin-wise and taste wise). Add to that, they work when customers come into your restaurant without hearing of the ad. They don’t feel left out and in many cases, when they can take advantage of it, they feel rewarded.
With these deals, the value exists in the customer’s mind, not in the math. The way it’s framed is important. On a small scale, Buy 1 Get 1 Free is better than 2 for the Price of 1. “Free” is a more motivating word than “Price.” This applies to every level of a promotion. What do customers want? What has worked for your competitors? What promotion can you create that is unique to your restaurant?
Generally, targeting is the best way to go. Either the customer wants the item or not. They don’t have to worry about unknowns because of the simplicity of it. In short, if your discount tries to motivate your customers (whether new or returning) into your restaurant, it should act like a key, not the prize behind the door. Chose something on your menu (normally an appetizer) that is under appreciated and provide it as a freebie or at a discount.
Of course there are tons of ways to structure deals. But start directly and work with resources you have. Don’t forget to promote it over all your online and in-store resources (website, social media, signage).
Restaurant Marketing In Perspective
It is important to understand that restaurants is part of the service industry and not makers of a product. Food you find in the supermarket is a product and supermarkets are merchants. Customers can do with whatever they like with what they buy. Even though the food is at the center of the dining experience, a restaurant is a service because the environment of dining is controlled. Many choices that at home the customer would make are made by your restaurant. How the experience is controlled makes all the difference. That can only be done with a systematic look at what your customer values and desires.
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