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Restaurant Marketing: The Future Is Now

Restaurant Marketing: The Future Is NowFoursquare is a location-based application for mobile devices that allows users to discover and rate local businesses and then share those discoveries with their social network.  Since I wrote about Foursquare last year, the company has really started to take off, landing promotional deals with Bravo, Warner Bros., and HBO.

The latest feather in Foursquare’s cap is a deal with Zagat, which was announced recently and caused quite a stir in the food service industry.  According to Zagat, so many Foursquare users were “checking in” from Zagat-rated restaurants that it only made sense for the two companies to start working together.

Foursquare allows users to check in from their favorite restaurants and earn “badges” based upon how often they check in.  Clever restaurateurs have started offering special promos to Foursquare members checking in from their establishment, which encourages buzz in the social media sphere.  With the new partnership, ratings and reviews will be pulled directly from Zagat and shared with a Foursquare user’s friends, adding a Yelp type feature to the application.  In fact, Yelp hasn’t been waiting idly by, and recently they released a mobile device app of their own.

For restaurants, a clear trend is building towards hip young people in urban centers driving buzz about eateries and bars through social networking applications like Foursquare.  That trend is going to change how you market your restaurant.

Another interesting side effect of the rise of social networking-based reviews of restaurants and bars is the slow death of the restaurant reviewer in your local paper.  Print media is on a long, slow decline in general anyway, but foodie reviews in particular are declining as the process of determining which places are good which are not has been democratized by companies like Zagat, Foursquare, and Yelp.  Gone are the days when a single bad review in the paper could make or break the success of a restaurant.

Of course, there’s also a dark side to opening up the review floodgates to the masses.  As many restaurateurs have already discovered, a couple malicious reviews on a site like Yelp can have a serious effect on your online reputation.  This isn’t helped any by the anonymous nature of the internet, which makes it easy for random people to leave scathing reviews.  Effectively spotting and responding to what people are saying about your restaurant online (“online reputation management”) is going to be crucial to keeping internet buzz about your establishment positive.

Adjusting to the new realities of how word-of-mouth gets around about your restaurant isn’t going to come easily.  It’s going to require spending a lot of time on sites like Yelp, Twitter, and Facebook.  It’s also going to require learning the new language of social media, one which your younger customers already speak fluently.  The upshot is that an effective social media marketing program can also generate an enormous amount of business, and some restaurants have started coming up with ingenious ways to harness the power of social media.

In general, restaurants have been slow to adopt this new form of marketing.  As we get further into this new decade however,  those that embrace social media are the ones that will find a clear advantage over the competition.  Like it or not, social media is the medium of the future, and restaurateurs can choose to get on that train today or in five years.  Either way, it’s leaving the station, with or without you.

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Text Message Ordering: Why Your Customers Already Love It

Text Message Ordering: Why Your Customers Already Love ItOne of the biggest shifts in customer behavior over the past few years has been the preference for take-out food.  All the major national chains (Applebee’s, Chili’s, etc. etc.) have added drive-up service for their customers.  And I’ve written on this blog about taking your restaurant’s food out, whether it be catering, drive-up service, or delivery as a way to diversify your revenue streams.

Consumers love using technology to make their lives faster and more convenient.  The explosion of “smart” phones and text messaging in the past five years is a perfect example of how the masses have adopted a new technology because it streamlined how they communicate.  The challenge for those of us in the food service industry has always been finding ways to leverage these technology trends to the benefit of business.

A new company has developed an easy way for restaurants to make their food more accessible: text message ordering. Zingle will give you a terminal that receives text message orders and prints them out for you as part of their service.  They’ll also provide you with some customized marketing materials to promote your new service.  The company charges a flat monthly rate for their service.

Text messaging is an unbelievably easy way for your customers to place orders, and from the looks of it, the service Zingle provides makes it easy for you to take orders via text.  Quite a few franchises have already started taking advantage of the service, including Subway and regional coffee chains.

The benefits to quick service restaurants from a text ordering service are pretty obvious, but what about all the independent operators out there?  For any independent that caters to younger customers, text ordering has got to be about as close to a no-brainer as you can get.  Even if you don’t do carry-out, let customers place their orders before they arrive so you can turn tables faster during the rush and cater to your regulars in a more timely way.

As technology changes the way we communicate, the traditional model for restaurants has begun to change.  Incorporating that technology into your operation not only makes things easier for your customer, it implants your brand in the evolving channels of communication where your customers are moving.

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How To Take Restaurant Marketing Underground

How To Take Restaurant Marketing UndergroundSince last August, when I first posted about the blossoming underground fine dining scene in San Francisco, the phenomenon has grown exponentially and started spreading up and down the west coast.  From Vancouver to L.A., chefs are ditching the kitchens of established restaurants and setting off on their own, and using shrouds of secrecy, weird locations, and social media to create an entirely new scene in the struggling fine dining segment.

What is underground dining? It can take many forms, from sumptuous seven course meals served in an abandoned warehouse to super-secret, invite-only seats in a chef’s home kitchen.  The common threads binding this movement together is five star cuisine served in a novel environment, prix fixe, and usually to a limited number of lucky invitees.

Underground dining even has a website, called The Ghet, which allows those searching for a coveted invite to an underground event a way to connect with those in the know.  Social media has also played a huge role in the success of the movement, with many underground chefs posting coded messages on Twitter, Facebook, and even Craigslist informing members where the next event will take place.

The combination of superb food and a sense of exclusivity and adventure has fueled the success of underground dining.  For traditional restaurants, the phenomenon has perhaps raised the bar of diner expectations.
So what can the fine dining establishment take away from the success of the underground movement?  The most important lesson here has got to be variety.  As baby boomers retire and a new generation enters its peak earning years, the rules of the game in fine dining are changing.

Many restaurants are ditching old dress codes and revamping menus to draw this new crowd of younger affluent diners.  But the time has come to take things further and start infusing the spirit of adventure and unique experience into the traditional sit-down restaurant.

Some ideas for taking your restaurant underground:
How To Take Restaurant Marketing Underground
Theme nights. No, don’t put up a couple plastic palm trees and call it Gilligan’s Island.  Transform your restaurant into something completely different.  Dress your staff differently.  Serve some unique specials and really take things to the next level.  Make your regulars feel like they’ve never been in your restaurant before.

Seasonal menus. You probably already have seasonal dishes that you sprinkle into your menu’s repertoire over the course of a year.  What if you took a week out of each season and completely changed your menu and promoted it to all your customers?  That underground feeling of a once-in-a-lifetime experience would start to sink in for sure.

The ultimate take-out. Abandoned warehouses?  Defunct wine cellars?  Just because those underground chefs have started making weird places cool places for eating doesn’t mean you have to be stuck in your restaurant for all time.
Take what you do, sign up 50 or 100 of your best customers, and put on a prix fixe meal extravaganza in some cool, quirky place outside your restaurant.  If it can work for a rebel chef it can work for you, and your customers will love the unique experience.

The underground dining movement is surging in popularity, and like any new trend, there’s some gems of innovation behind the success.  Taking an “If you can’t beat ‘em, join ‘em” attitude may just give you some ideas that can make your restaurant really appealing as more and more customers get on the underground bandwagon.

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If It Makes Sense For McDonald’s, It Probably Makes Sense For You

If It Makes Sense For McDonalds, It Probably Makes Sense For YouMcDonald’s has been an increasingly lone bright spot in the dark world of food service during a recession.  Sales are up, new restaurant layouts appeal to a wide range of customers, and Starbucks has a serious competitor on their hands.  McDonald’s success can be attributed to a lot of things, including their bargain basement pricing, but one factor stands out above all others: McDonald’s ability to rebrand themselves as an upscale, hip gathering place rather than a junk food distributor.

Giving customers a sense of place is a great way to add value to your restaurant’s brand.  Making your restaurant a place where people enjoy gathering is the strategy McDonald’s has pursued, and it seems to be paying big dividends.   McDonald’s corporate offices announced recently they will be offering free Wi-Fi internet access in 11,500 U.S. locations.  Clearly this move is another part of their strategy to create “stickiness,” or ways to get customers to come in and stay for awhile, which drives more sales and reinforces that sense of place in customers’ minds.

More than likely your restaurant has different priorities and customers than McDonald’s.  That doesn’t change the fact that their restaurant marketing model is working, and there’s a lesson in their success for everyone.

With that in mind, I’d like to point out an article I wrote last year for The Back Burner called Become A Hotspot! which gives you the how and the why on setting up a Wi-Fi network in your restaurant.

Hey, if it’s working for McDonald’s it will probably work for you.

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This Isn’t Your Mother’s Happy Hour

The happy hour has long been the domain of college bars, hole-in-the-wall restaurants, and after-work watering holes.  These establishments always understood a cardinal rule in driving business: a busy place is a place people want to be, and the easiest way to fill up a bar or dining room early is with a happy hour special.

Of course, many restaurants focused on good food, excellent service, and solid advertising to drive business, and for a long time it was easy to fill dining room and pack bars without having to discount during happy hour.

That model is working less and less as customers in all segments of the food service industry continue to insist on deals and discounts to get them to buy.  As a result, fine dining has started getting into the happy hour game in order to get butts in seats and keep them there.

This also isn’t the happy hour you might remember from five years ago.  It isn’t just a couple domestic beers on tap for $2 anymore.  Many restaurants are taking their happy hour all out, with special tapas style menus at bargain-basement prices and premium cocktails for $5.  Happy hour has also gotten much longer, from 2-3 hours to 4-5 hours of deals.

The effect in restaurants and bars that have gotten aggressive with their happy hours is noticeable.  Customer traffic tends to peak in the last hour, and that makes the place look active and exciting to potential walk-ins.  It beats the heck out of a couple quiet diners whispering over cocktails at two tables in the corner.

If you’re considering adding a happy hour or spicing up the one you’ve got, keep a few key factors in mind:

Happy hours should make the customer happy.  These days, your customers aren’t looking for a dollar off a Budweiser.  They want more, and they’re getting it as restaurateurs continue to fight for business.  Make your happy hour a smokin’ deal if you really want to ratchet up the buzz and the traffic.

Create a special menu.  There’s no need to lose your butt on your dinner apps just to stay competitive.  Take your highest margin apps and entrees and turn them into smart, fun, finger-style dishes that can be prepared fast and efficiently, preferably with a margin you can’t lose on.

Spend some money advertising.  If you’re changing up the menu and slashing drink prices, you need volume.  You’re not going to get volume if you don’t get the word out.  Start with your regular customers and then hit the rest of the market with whatever you’ve got (and whatever you can afford): email marketing, local ads, flyers, etc.

Once you’ve got ‘em in the door, keep ‘em!  Customers are there because you’ve gotten their attention with some good deals.  There’s never been a better opportunity to get them to stay.  Use happy hour menus to advertise dinner specials and train your staff to drop some great deals on happy hour patrons before they leave.  At the very least, they may come back for dinner another time after learning that your deals don’t end at 7 pm.

From the looks of it, happy hour specials are here to stay, and if you’re not in the game, your competition is or will be soon.  Many restaurateurs accept this as a fact of life and have already gone after happy hour crowds.  Fine dining, on the other hand, has held on to their prices and focused on the value of their service and product for as long as possible, but now event these places are slipping into the discount game.

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These Guys Boosted Sales 400% With Creative Marketing

These Guys Boosted Sales 400% With Creative Marketing

Photo by Dean Rutz, Seattle Times

Ivar’s Seafood Restaurant in Seattle, Washington pulled off a brilliant piece of restaurant marketing recently, resulting in a 400% increase in clam chowder sales.

How did they do it?

Well, it’s a funny story actually.  Ivar’s dreamed up this scheme to get a kooky story going in the local media and virally on the web.  The tall tale went like this: the restaurant’s founder, Ivar Haglund, long since dead, had arranged for billboards advertising his restaurant to be planted on the bottom of Puget Sound in the 1950s.  Apparently Haglund fervently believed that people of the future would travel the depths of the Sound via submarine, and his billboards would one day be perfectly located.

Ivar’s let the story steep in the media for a couple weeks, then staged a recovery of the billboards, which got a lot of attention.  Unbeknownst to the media or the masses, the billboards had been planted a few short weeks before the “recovery.”

The restaurant then announced they would roll back the price of a bowl of clam chowder to 1950s prices to celebrate the discovery of the long lost billboards.  The story blew up all over the internet, and soon Ivar’s had a lot of new business on their hands, leading to the 400% increase in clam chowder sales.

The story reveals how effective a well-designed marketing campaign aimed at social media can be.  The food service industry in general are slow adopters when it comes to technology, and as I’ve discussed here on The Back Burner before, it remains unclear how much restaurants are even using social media, despite the steady stream of articles and experts saying how great this new kind of marketing is.

Ivar’s has proven that innovative thinking and a willingness to go all in can bring astounding results if it’s properly executed.  This example also makes it clear just how effective “new” marketing can be.

So how do you plan to use social media to boost your restaurant’s sales 400%?  If you’re like most restaurateurs, you haven’t even thought about it.  As Ivar’s has proven, it’s clearly time to start.

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20 Restaurant Marketing Tips

20 Restaurant Marketing TipsHere at The Back Burner we try to provide as many resources as possible for your success.  Over the past six months we have published a treasure trove of restaurant marketing tips that can help you get more butts in seats.  I don’t have to tell you that it’s been a tough year.  The good news is, if you’re still here, you’re obviously doing something right.

This is also the time to grab more customers.  Their favorite eatery might have recently gone out of business, or they’re looking for a place with good eats, good service, and above all, good value.  Now is your chance to shine.  And here are 20 marketing tips that will help you get more customers and remind your existing ones to come back and visit:

1.  Should Your Restaurant Have A Website? – In a word, YES!  Learn how to get your website up and running here.

2.  Use Twitter To Marker Your Restaurant (4 Strategies For Success) – Yeah, yeah, I’m sure you’re tired of hearing about Twitter, and if you haven’t signed up already, chances are pretty slim you will now.  But give this a read and make sure you really do want to pass this opportunity up.

3.  Email Marketing: 7 Tips For Restaurants – Email is one of the most effective marketing tools out there, and if you’re not using it to reach your customers, you’re missing out on one of the best Return On Investment (ROI) marketing strategies out there.

4.  Improve Restaurant Sales At Food Festivals – even though the summer food festival season is mostly over, it’s never too early to start planning for next year.  Learn the why and the how here.

5.  4 Steps To Managing Your Reputation Online – With the advent of social media and user generated content on the internet, people are talking about your restaurant somewhere.  While most of this chatter is probably positive, it only takes a couple disgruntled customers to ruin your online reputation.  Learn how to manage that reputation here.

6.  Restaurant Marketing Goes Hyperlocal - New apps for mobile devices break down restaurants and bars by the block.  Some urban eateries are taking advantage of this “hyperlocal” trend to advertise very specifically to customers in their neighborhood.

7.  Restaurant Promotion Gone Afoul: The Most expensive Free I’ve Ever Seen – In this guest post by Jaime Oikle, learn how a coupon scheme run by restaurant.com can actually hurt your bottom line.

8.  For All The Hype, Are Restaurants Really Using Social Media? – Everyone, including me, is telling restaurants to get into the social media game.  Are restaurants listening?  A new study suggests they aren’t.

9.  The Casa Bonita Secret To Being A Successful Restaurant – Good food, good service, and good prices all play a role in a restaurant’s success.  But being unique is probably the single most important factor in a restaurant’s success.

10.  Menu Pricing’s Theory Of Relativity – Every customer looks at price when selecting their meal.  Behavioral psychology also shows that value is decided based upon the prices around the item they select.  Learn how to set up your menu to make your customers believe they’re getting a great deal every time.

10 More Restaurant Marketing Tips Here

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The Casa Bonita Secret To Being A Successful Restaurant

The Casa Bonita Secret To Being A Successful Restaurant

Want to know what makes a restaurant succeed where others fail?  Is it because your food is the best around?  Do you offer customers an incredible value for their buck they just can’t get anywhere else?  Or is your staff so professional, so incredibly well trained, that customers just can’t get enough of your efficient, friendly service?

Well, all those things are factors in your success, but there have been hundreds of restaurants, if not thousands, that have done all of those things relatively well and still failed.  So, how do you identify the key factor that makes one restaurant succeed where another fails?

To answer that question, think back to some of the most memorable restaurants you have ever been to.  I personally have been to hundreds of restaurants all over the United States, Mexico, and South America, and out of all those establishments, one pops up in my head first, just about every time: Casa Bonita in Denver, Colorado. If you’ve never heard of Casa Bonita, it’s a Mexican themed restaurant with a summer carnival feel.  There are games like skee-ball.  There’s a massive waterfall in the middle where cliff divers regularly plunge at least 60 feet.  And, of course, there’s Black Bart’s Cave, which goes behind the waterfall and is full of treasure and dead pirates.  In short, the place is a kid’s paradise, and when I was young, it was the best restaurant I had ever seen.

The place is so unique the popular cartoon series South Park even devoted a whole episode to it (yes, South Park fans, Casa Bonita exists!). To be honest, the food is at best mediocre.  I don’t even remember what the service was like and I don’t care.  And I know the prices were outrageous.  But just writing about Casa Bonita makes me want to go back. Why?  Because you can’t get Casa Bonita anywhere else.  Out here in Colorado, Mexican restaurants are a dime a dozen.  Some are good, some are bad, and many struggle to attract customers.  They all compete on price.  They all have hard working wait staff.  Most have great food.  None of them are unique enough for me to remember, with the exception of the Rio in Boulder, which has the best margarita in Colorado – hands down. The point is that you have to make your restaurant unique.  No matter what kind of food, what segment of the population you’re targeting, where you are located, your restaurant must stand out.  You don’t need a 60 foot waterfall to be unique… maybe your happy hour features the only all-you-can-eat nachos in town.  Or perhaps your patio is lush with flowers and greenery every summer.  Something must make your restaurant stand out. Some restaurant concepts even use rude service as a gimmick to make themselves different.  It’s not about the best entrée in town.

It’s about the atmosphere.

This is not to say you don’t need well trained staff and great food that’s competitively priced.  It is to say that word-of-mouth is your best weapon, and when people think back to the experience they had at your restaurant, are they going to mention the incredible enchilada dish that was better than any they’d ever had before, or are they going to mention the free salsa dancing lessons?  You decide.

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For All The Hype, Are Restaurants Really Using Social Media?

For All The Hype, Are Restaurants Really Using Social Media?For all the buzz around using social media like Twitter and Facebook as marketing tools for restaurants, a recent study by Chalkboard.com indicates the majority of restaurants aren’t catching on.  Establishments in three major urban centers, New York, San Francisco, and Portland, OR were surveyed about their internet and social media marketing strategies.

The results are interesting, and definitely surprising.  Some highlights:

While about 80% of restaurants in New York and Portland have a website, only about 50% of restaurants in San Francisco do.  This is especially surprising when you consider the fact that San Francisco is home to Silicon Valley, the cradle of the internet.  I wonder if the dominance of Yelp, which calls San Francisco home, has preempted restaurants from developing their own website.  Yelp is used in San Francisco more than any other city.

Under 10% of restaurants in any of these three cities uses Facebook or Twitter.  The vast majority of restaurants in three of the most tech-savvy cities in the country aren’t using social media to market to customers, despite the mountains of press about the benefits of doing so.  I can only imagine what the percentages of social media marketing restaurants are in other areas of the country.

So what is the disconnect between people who write about the food service industry (including me) and the people who actually work in the food service industry?  Are restaurants unaware of the benefits of social media marketing?  Unwilling to invest in social media marketing?  Unconvinced of the benefits of social media marketing?

As I have said previously on this blog, the beauty of social media marketing is the only it costs you is time.  Granted, as a busy restaurateur, time is also a very precious commodity.  But when you think about the very real dollars you must spend to advertise in traditional channels like radio, print, etc., and when you take into account how easy it is to measure the success of a social media campaign, the reasons for not utilizing social media become few indeed.

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Restaurant Promotion Gone Afoul: The Most Expensive Free I’ve Ever Seen…

Ok, so this hit my desk in the early AM on 9/9/09: “Restaurant.com Stretches the Dollar with 90% off Gift Certificates”.

A limited time promotion they are running using the date of 9/9/09 as an excuse. I don’t care what day it is on the calendar this is a terrible promotion. Well, let me clarify that – this is a terrible promotion for any restaurant.com client. Who can deny it’s a good deal for the customer – A $25 certificate, which they usually discount to $10 anyway, is then $1 – yes, one dollar. And customers are indeed going crazy for it – a quick search on Twitter shows countless people sharing the news. That’s all well and good – but from the restaurant side, I find the promotion disgusting. I know if I was a restaurant on their site, I would call up and immediately cancel with them. Of course, they lock restaurants in for 12 months so that’s not really an option – and I guess they hope that restaurants forget about these kinds of promotions when it comes time to renew.

So, let me elaborate. I’m a restaurant and I’ve got a pretty nice place. And some lame-brain marketing person desperate for sales at restaurant.com makes my $25 certificate worth a buck! That makes me and my restaurant look like an ass.

I’ll say it again – like an absolute ass.

Here’s the deal…

  • Restaurant ABC signs up for “free” to restaurant.com
  • Restaurant ABC receives a decent looking presentation of their restaurant on the website
  • Restaurant ABC decided on a couple of certificate offers to make available – i.e. $10 for a $25 certificate and decides on the restrictions for it – i.e. with the purchase of $50 or more..
    – Restaurant ABC agrees to redeem the certificates when they come in the restaurant

Ok, maybe that’s a good idea – I strongly say no it’s not – but let’s continue to go with it.

Here’s the rub…

  • Restaurant.com doesn’t share any of the dollars from the sale of certificates with the restaurants.
  • For example, in the case above, restaurant.com would receive the $10.
  • Or as the case would be in this 90% sale, the $1
  • Since they don’t have to worry about sharing this revenue and it’s all just digital certificates they hold a wacky sale like this.

Good for them, because consumers flock to buy these cheap certificates – well “coupons” really – it’s a very big stretch to call these things gift certificates. And they get some sales volume and new customers and media attention, etc.

But is it good for the restaurants – their so called “partners”?

Well maybe if the restaurant just wants someone to walk through the door at any price. But certainly not if the restaurant has any inkling of branding and image. It’s hard to look cool, hip and happening when they are shilling your $25 certificate for a measly dollar. It’s just the wrong impression. It’s just the wrong tactic. It’s just wrong.

There are countless ways to do better restaurant marketing. The marketing machine of restaurant.com has somehow fooled thousands of restaurants. Maybe because it seems easy and free, restaurants say what the heck and give it a try. Well, let me just say that “free” can sometimes be very, very expensive. And that is the case here.

Maybe you think different – that’s fine – post your comment. And forward a link to the restaurant.com people, they are welcome to respond as well.

All the best,
– Jaime

P.S. Don’t take this as a harsh criticism if your restaurant has chosen to use restaurant.com. Do take it as a constructive critique that you can do better with your marketing and be more creative and inventive and build true value with your marketing programs. That’s what we help with – we have tons of marketing resources for folks at RestaurantReport.com and RunningRestaurants.com.

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