Achieving Financial Goals For Your Restaurant

Today’s Environment For Restaurants

Competition for restaurants has increased significantly over the past few years. Changing consumer lifestyles has led to rapid growth of new concepts while traditional restaurant concepts have seen declines. A recent article in by Nations Restaurant News is quoted as saying “85 percent of consumers survey said they eat at fast casual restaurants at least once a month”. These are startling results for a category that barely existed ten years ago. Combined with competitive issues, economic concerns have also been on the radar screen of many restaurant owners. Outlined below are the top concerns that keep restaurant owners awake at night: • How do I increase sales and reduce cost? • What will be the impact of food cost on my business this year? • How will government policies impact my business? • Rising minimum wage cost and the impact it brings. • How will rising gasoline prices impact the discretionary spending of my

customers? • Where do I find the time to do everything?

The purpose of this document is review different options for restaurants owners to help improve the profitability of their restaurant during these challenging times.

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When examining opportunities to improve restaurant profitability there are two basic strategies to meet this objective

Increase Top Line Sales Revenue

or

Reduce Expenses

In realty a strategy needs to be developed that achieves both goals. For many restaurant owners, they may not be aware of all of the different techniques to accomplish this. In our interviews with restaurant owners across the country, the majorities of owners are working hard in their business, but are not effectively on their business.

Driving Revenue Programs to drive revenue are the cornerstone to many restaurants both chains and independents. In some ways, the revenue streams for restaurants can be looked at like the sales funnel for a B2B enterprise. Outlined below is one way to look at it

Traffic Generation Programs

Customer Satisfaction Execution

Customer Retention Strategies

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Let’s explore the various programs.

Driving Revenue

Increasing Traffic

There are many types of programs to drive traffic for your restaurant. Each of them serve their own place in the equation and often there are programs out there that achieve multiple goals. Below are some of the traffic driving techniques for restaurants:

• Local Search Visibility Programs

• Web Site

• SEO Strategies

• Online Ordering Programs

• Social Media Networks

• Brand Reputation Programs

• Traditional Advertising

• Local Magazines

• Direct Mail Programs

• Cable TV

• Local Marketing Programs

• Community Involvement Programs

• Cause Related Marketing

• Restaurant Week Events

• Community Fairs / Events

Each of these programs are designed to get people in the door of your restaurant to try your food. Once they are in, it is important for restaurant owners to capitalize on this opportunity and build a loyal customer.

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Driving Revenue

Customer Satisfaction Are your customers satisfied? How do you know? Do you have a strategy to improve customer satisfaction? Most restaurants do not have a specific plan to measure customer satisfaction and rely only on what people tell them. To be honest, how many people will tell you they did or did not have a good experience in your restaurant? Review sites such as Yelp or Trip advisor are an outlet for consumers to give your business a review and are an example of how the Word of Mouth strategy has changed. A recent Harvard study concluded that a single star increase in your rating can impact your sales by s much as five percent. Clearly, it is important that your restaurant have a customer satisfaction strategy. Below are some of the ways in which restaurants can have an impact on customer satisfaction: • Menu item selection. • Signature menu items – What are you know for. • Server training. • Food quality. • Instant reviews from customers • Four walls marketing techniques. Happy customers are an important benchmark of any business and lead to customer retention and referrals for your business.

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Driving Revenue

Customer Retention

You have driven traffic in, created satisfied customers, what is your strategy for bringing them back. For an average casual dining restaurant, the lifetime value of a customer is approximately $40,000 dollars. That is important to know if in developing a plan to bring customers back and have them give referrals for your restaurant.

What are effective tools for retaining customers? Technology has created many new opportunities for retaining customers that often utilize many of the techniques described in both driving traffic and customer satisfaction. Outlined below are just some of the tools that have not been previously mentioned.

• Email marketing.

• Loyalty Programs

• Text Messaging

• Frequency Programs

• Fundraising Programs

When implemented correctly, these programs create a communication strategy with your customers for you to let them know of any special programs, new menu items and special offers for their birthdays or anniversaries.

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Reducing Expenses

Reducing Expenses

Improving top line revenue is important, but reducing expenses is an essential tool for the restaurant owner to utilize. Outlined below are some of the areas that should be looked at for reducing cost.

• Menu Engineering

• Inventory Management

• Portion Control

• Liquor Control

• Labor Scheduling

• Marketing Cost

• Utilities Management

• Controllable Expense Management

• Supplies

• Credit Card Processing

• Phone Expense

• Comps

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Measuring Success

Measuring Success

How does a restaurant measure success of various programs? The NRA has suggested guidelines for expense management. My experience has shown me that most restaurant owners do not have a solid grip on these measures to manage success. The largest issues I have found in working with restaurants are the following

• Food Cost clearly not identified or measured.

• Little or no budget set aside for marketing.

• Deep discounts given that drive down revenue.

• Over staffed or understaffed due to labor scheduling issues.

• Not enough sales volume due to lack of traffic.

At CORE Restaurant Marketing we believe in a very strategic plan to managing and measuring success. We also recognize that our clients have limited time availability due to the nature of the business and we work with them in a variety of Pay for Performance and Coaching Programs.

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Measuring Success

To learn how your restaurant can improve their profitability, contact CORE Restaurant Marketing. Just one phone call can help identify revenue opportunities for your business. A Free Revenue Potential analysis will be prepared for your restaurant with no obligation.

We can be reached on the following ways:

Phone – 1-888-890-9492 x 101

Email – info@corerestaurantmarketing.com

Web – corerestaurantmarketing.com

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