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Restaurant Marketing Goes Hyperlocal

Restaurant Marketing Goes HyperlocalThere’s a new movement afoot in the urban centers of this country.  It started sometime last year and is still in its infancy, but given enough time, it could become the next MySpace, Facebook, or Twitter of the social media revolution.

It’s called “hyperlocal” social media.  One of the pioneers of the movement, Everyblock, provides all kinds of information about every single block in a city, from restaurant reviews to police reports to foreclosure information.  A more recent, and for restaurateurs a much more intriguing, option came online earlier this year.  Foursquare describes itself as 50% friend finder, 30% city guide, and 20% nightlife game.

It works like this: as you patronize your favorite local haunts, you “check-in” with Foursquare, which allows you to see if friends are nearby and post tips/information about the venue you’re currently in.  The more you check-in, the more “badges,” or awards, you get.  For instance, you can become the mayor of certain bar or club if you check-in the most times from that location in 60 days.

Tech-savvy restaurants and bars caught wind of the mayor and other Foursquare badges and started advertising to this ready-made customer base, offering free drinks and other comps to the Foursquare mayors of their establishment.  Most people had no idea what the heck a mayor was, but those that did quickly spread the word to their friends, and it turned out to be a hot way for restaurants and bars to market themselves effectively to their hippest customers.

In general the hyperlocal movement is beneficial to the food service industry because it provides a real time medium through which restaurants can advertise to their customers.  For now, Foursquare and the inevitable copycats that are forthcoming will be largely limited to big urban centers like New York, Chicago, and L.A., but it’s not that farfetched to imagine a hyperlocal medium of one kind or another servicing communities of all sizes.

For those of you who are located in ultra-competitive large urban centers, you can’t afford to ignore this new phenomenon.  If you haven’t already, start advertising to your Foursquare customers.  Offer some sort of discount to regular customers.  Some have gotten creative with the scheme, like putting the word out through the web application that anyone who barks like a dog on Thursdays gets a free drink.  Others ask to view their customer’s iPhone to verify they have actually checked-in at their restaurant.

No matter what your scheme, Foursquare can become an important vehicle for driving buzz and traffic to your front door.  For the rest of us, located outside the super hip downtown scene of the big city, we can only shake our heads at the pace of technology and wonder when these trends are coming to our neck of the woods.

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Cash or Charge: Save Money AND Give Your Customer A Discount

Cash or Charge: Save Money AND Give Your Customer A DiscountCredit cards have become the currency of choice in restaurants everywhere.  Many restaurateurs report 80% – 85% of their customers pull out plastic when it’s time to pay the bill.  For a long time now the conventional wisdom in food service goes like this: any way the customer wants to pay me I’ll take.

But credit card companies are good at charging for the convenience they provide.  Every time a card is swiped in any restaurant, a flat fee of 10 – 25 cents is charged to the restaurant outright, plus another 2% – 3% of the transaction’s value in fees.  Depending on how much business you do, those credit card fees add up to hundreds or thousands of dollars every month.

Of course, I’m not really telling you anything you don’t already know if you own or manage a restaurant.  What I do want to tell you is that some restaurateurs have figured out a way to pass some added value on to their customers and save some money on monthly transaction fees at the same time.  By offering as much as 20% off the bill to customers who pay with cash, some restaurants have turned the 80% ratio of plastic payers on its head: now 80% pay with cash and enjoy a discounted meal to boot.Cash or Charge: Save Money AND Give Your Customer A Discount

The discount-for-cash program has proven so successful in some cases that restaurants have been able to actually grow business, even in such a sluggish dining market.  If marketed cleverly, the discount program could work well for any independent restaurant.  Some ideas:

Offer an additional discount coupon.  Use email marketing to offer a coupon that gives your loyal customers an additional discount for paying with cash.  While you’ll be losing profit margin, you’ll be able to gauge how enthusiastic your most frequent customers are about the cash-for-discount program.  The discount will also get some bodies in some seats, where hopefully (with a little server encouragement) order an appetizer or a bottle of wine since they’re expecting a discount.

Offer the discount-for-cash on a specific night.  Take the slowest night of the week and turn it into discount night and then gauge how much that increases business.  This way you can roll out the discount program slowly and get a feel for how the numbers really add up in terms of increased business versus lost margin.

Make a special discount-for-cash menu of high margin items.  If you really want to mitigate your loss on the program but still want to market it to get some butts in seats, make a special menu comprised of the highest margin items on your menu.  That way you know you’ll still be making a little profit after the discount and you can push the entrees that are your favorite kind to sell.

Anybody who leverages a cash-for-discount program is bound to see a bump in business.  Figuring out how to leverage that bump and get the most out of the discount you offer is the real key to success.  No matter how you implement it, make sure you leverage this discount program as much as you can.  If you aren’t getting money from your customers because of the discount, at least get some information so that you can understand your customer better.

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Email Marketing: 7 Tips For Restaurants

In the marketing industry, email remains one of the most popular and most effective ways to reach customers.  In the restaurant industry, email marketing can be a great way to build customer loyalty and brand recognition.  It’s cheap, it’s easy, and it’s proven to bring customers in the door.  So why aren’t more restaurants using it?

If you have yet to market to your customers with email, here are some simple steps and best practices to maximize your campaign:

1. Ask your customers to sign up.  There’s no point in sending out an email if you don’t have anyone on your list.  There’s also no point if the people on your list don’t patronize your restaurant.  Tantalize your customers with deals and prizes to collect their email addresses.  For example, use a raffle to collect email addresses, or offer 10% off coupons in exchange for signing up through your restaurant’s website.

2. Don’t send emails unless it’s requested.  Sending unsolicited email is also known as SPAM, and we all know how annoying that is.  That’s why the best way to collect email addresses is to offer a little something in return and get your customer to volunteer their email address.  It’s also important to make sure your customers understand that they are signing up to receive emails.  Make it clear that they will be hearing from you in the future.

3. Offer something every time you send an email.  Every email marketing beginner thinks it’s a great idea to send out emails full of information about themselves and their business.  The hard truth is, however, that your customer really doesn’t want to be bothered reading an email about a restaurant.  What they do want know is when your happy hour is and what days you offer specials.  Don’t send an email unless you have something to offer.  Otherwise you’re just clogging up an already busy email inbox.

4. Track conversions.  Use coupon codes or some other system to track the success of your email marketing campaign.  Try different types of offers and see which ones have the highest conversion rate.  In other words, does a 10% off coupon on any meal over $25 work better than a buy one, get one free drink during happy hour deal?  The only way to know for sure is to get customers who heard about the deal through your email campaign to use a code when redeeming their discount.

5. Create a schedule and stick to it.  In general, you shouldn’t be sending out emails more than once a week, and twice a month is probably a better route.  No matter how frequently you decide to send out email, stick to the same schedule so that customers begin to expect your emails on the same day.  This will improve the chances that your email will be opened and read.

6. Use a proper email marketing system.  There are a variety of options out there: Feedblitz, MailChimp, ConstantContact, Emma.  These services usually charge you per email or per number of subscribers.  Choose one that works for you and pay the money for a proper system.  Don’t try to send emails out from your Hotmail account.  For one thing, it looks unprofessional.  For another, you will get labeled as spam sooner or later.  These email services also have great tracking functions that provide important information, like how many people opened your emails, how many clicked links in your emails, etc.Email Marketing: 7 Tips For Restaurants

7. Avoid spammy words and punctuation.  Words like free and buy now cause automatic spam filters to flag an incoming email message.  Punctuation like lots of exclamation marks and all capitalized letters will also set off the alarm.  Avoid these spammy looking words and punctuation in your emails like the plague.  For more info on avoiding spam filters, check out this blog post.

The most important thing to remember when it comes to email marketing is to experiment.  Best practices only take you so far.  Every restaurant is different, and every one has a different type of customer.  The email marketing campaign strategy you employ for your restaurant will be different from every other one, and the best way to optimize it is to try different types of offers and presentations until you find the one that gets the most customers in the door.  This is also why tracking is so important.  If you can’t tell if you’re having a busy Tuesday night by chance or because of last week’s email, then you can’t improve and refine your campaigns.

When used properly, email marketing can be one of the most cost effective ways to bring customers back to your restaurant again and again.  A little time, a little testing, and a lot of experimenting can turn email into one of your top advertising moneymakers.

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7 Technology Trends In Food Service

7 Technology Trends In Food ServiceAs we approach the end of the first decade of the new millenium, technology has become a stronger and stronger force in our lives.  Every industry has been affected, and food service is no exception.  Yet it seems that many restaurants lag behind when it comes to harnessing the power of technology to their advantage.

The following Back Burner posts peg the cutting edge of technology and how it is being applied in the food service industry.  And while you may not Twitter or have wireless access in your dining area just yet, knowing what’s coming in the near future will help you stay ahead of the curve and on top of the competition.

1.  Can Google Improve Food Safety? – Tracking a food-borne illness outbreak takes time, which is precisely the last thing we have when attempting to control one.  Google has developed a way to track outbreaks accurately, and above all, quickly, beating the CDC by over a week in identifying a sickness trend.

2.  Should You Use Digital Media In Your Restaurant? – As we make the transition to a digital society, customers are becoming more and more familiar with digital media.  Sooner or later, it will become the primary way to communicate with your guests.  Learn what some restaurants are doing to engage customers with digital media.

3.  Become a Hotspot! – Speaking of digital technology, wireless internet access has long been the domain of coffee shops, but that doesn’t mean you can’t use it to improve lunch and afternoon traffic in your restaurant.

4.  10 iPhone Apps Your Customers Are Using- Several iPhone Apps are helping customers find your restaurant.  Learn more about it in this post.

5.  Online Ordering: A Blessing Or A Curse? – Can your restaurant handle orders coming in from the web?  More business is always good, but what are you going to do to handle it?  And what happens when customers start expecting to be able to order online?

6.  Make Tableside Ordering Easy With New Technology – Hand-held wireless devices like BlackBerries and iPhones are now common.  What if your server had a similar device for taking orders?

7.  Should Your Restaurant Have A Website?- A website is the most basic building block of the technology revolution.  The short answer to this question is yes, definitely.  Get some tips on how to do it right in this post.

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10 Restaurant Marketing Trends

10 Restaurant Marketing TrendsPromoting your restaurant is a never-ending task.  As a restaurateur, you understand just how important marketing is to your success.  You probably also don’t have the resources to carry out a massive campaign (like Coke or Budweiser), and every dollar you spend needs to come back as a paying customer.

Even in trying times like these, your restaurant cannot afford to cut back on marketing.  You absolutely do need to make sure you spend those limited dollars wisely.  The Back Burner has posted several articles that will help you maximize your marketing ROI.  Read on to learn more:

1. Is Restaurant Marketing Technology Getting Scary? – The cutting edge in restaurant marketing is bringing some technologies to bear that remind me of The Minority Report.  Check out this post for more.

2. A Restaurant Survival Guide, Parts I and II – This post was written during the darker economic days of February; however the marketing strategies here are just as relevant now as they were then.

3. Kogi Is Kool: The Twitter Revolution – No matter what you think about “microblogging” and Twitter, you can take advantage of it’s huge popularity to promote your restaurant.

4. Engineer Your Menu – One of the most important advertising pieces in your restaurant is the menu.  Learn how to make people want to buy and spend more in this post.

5. Can FaceBook Help Your Sales? – Anybody who has spent any time studying marketing of any kind these days has heard the mantra “Use social media, use social media.”  This post discusses how the food service industry has used this new medium.

6. Bring In Customers With A Speed Lunch Promo – A healthy, value-driven lunch menu guaranteed to be served in 30 minutes or less can go a long way towards bringing in customers looking for some good “fast food.”

7. What Should You Do About Yelp? – This website has stirred a lot of controversy lately due to it’s business practices.  Learn more about what restaurants are doing about it in this post.

8. Become A Hotspot! – Nothing will speed up your slow afternoon hours like becoming a WiFi hotspot.  Learn how in this post.

9. Does Your Restaurant Have A Leaky Bucket? – Learn about the latest trends in customer attitudes towards the food service industry and what to do about them in this post.

10. Online Ordering: A Blessing Or A Curse? – Some chains have started taking online orders.  Many in the food service industry view this as problematic at best.  Learn why it’s an inevitable wave of the future in this post.

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10 iPhone Apps Your Customers Are Using

10 iPhone Apps Your Customers Are UsingiPhone apps are all the rage right now, and already there is an app for just about anything you can think of under the sun.  This includes the restaurant industry, and these 10 apps are affecting how consumers make their decisions on where and when to go out to eat, which directly affects your business.

Here’s the top 10 ways people are getting info about your restaurant on their iPhone:

1. OpenTable – You’ve probably already heard of OpenTable.com, an online reservation service.  Well, now potential customers can use their iPhone to search for restaurants near a given location based on price, number in the party, and type of cuisine.  If your restaurant is registered with OpenTable they can even make a reservation right then and there.  Wow.

2. Yelp – I’ve already covered all the hot water Yelp has been in lately on this blog.  Now customers can write those sometimes scathing, sometimes retarded, sometimes good reviews of their restaurant right from their iPhone.  They can also find you and read other reviews about you before they walk in the door.

3. UrbanSpoon – this app brings a fun element to the locating a restaurant genre with a slot machine interface that randomly selects three factors – neighborhood, food type, and price.  You can lock any of the three and spin for the others to focus on a specific category.  For a restaurant owner, it can be a little frustrating leaving the fate of your potential customer’s decision to a random spin, but that’s how it goes.  This app also has reviews and maps for restaurants.

4. VegOut – This app searches vegetarian restaurants only.  All the same features are available: search by location, reviews, and maps.  If you run a vegetarian restaurant, this app is your very best new friend.

5. LocalEats – This app focuses on producing the 100 best independent restaurants in the 50 largest cities in the U.S.  If you run a chain or don’t get picked by the editors of LocalEats, you’re kinda out of luck.  But if your restaurant is on the list, potential customers can find you easily by searching by location.

6. Pocket Cocktails Drinks & Wine – Customers can use this app to search for hundreds of cocktails, get drink recipes in case they stump your bartender, and even get wine recommendations based on what they have ordered.

7. Tipulator – This app allows your patrons to calculate any tip from 0 to 50% among as many people as are in the party.  It could be a double edged sword for your servers, but this cool little app will probably help customers calculate a good tip rather than a bad one.

8. Calorie Tracker – an app developed by Livestrong.com, it calculates the calories of over 525,000 different ingredients so your customers can select the most healthful items on your menu.

9. Fast Food Calorie Counter – this app does exactly what it says it does – calculates the calories and fat of 6,000 menu items from 55 fast food chains.

10. 160,000 Recipes from BigOven if you’re ever hurting for a new recipe, you might want to check this app out.  Get ingredients and preparation instructions, plus save your favorites and randomly select new recipes.

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Restaurant Technology and Marketing: Become a Hotspot!

Restaurant Technology and Marketing: Become a Hotspot!

More and more restaurants, especially fast casual, coffee shop, and quick service chains, are becoming WiFi internet hotspots, allowing customers to plug in to an internet network directly from their laptop computer at their table.

Turning your restaurant into a hotspot is relatively easy and has proven to help boost lunch sales by as much as 8%.  It also encourages customers to come in during that extremely slow period between lunch and dinner, and helps facilitate business meetings, which can translate into some good sales for your establishment.

If you are considering setting up a WiFi hotspot in your restaurant, keep a few key things in mind:

Give away internet service for free.  First of all, that’s what most other hotspots do, and so your customer already expects to get service for free.  Secondly, you’ll be increasing sales and customer loyalty by giving away free internet.

Password protect the network.  Have servers give out the password to patrons when they are seated.  This helps prevent people from neighboring buildings from pirating your connection and slowing it down.

Make electrical outlets scarce.  When WiFi hotspots were first brought in to restaurants, many owners worried that patrons would turn into serial “table campers,” hanging out for hours on end without ordering anything more than a cup of coffee and surfing the net.  The reality has been that the vast majority of customers do not overstay the standard table turnover time, however, the best way to ensure this is to make sure they can’t plug in their laptops.  That thing is going to run out of juice eventually, and this helps your restaurant avoid abuse of your WiFi connection.

Create separate networks for customers and internal use.  Just because you already have an internet network set up for your business’ computers doesn’t mean you should make that same network available to customers.  The last thing you want is some creative patron getting in to your POS system or other important information through your network.  Spend the four or five hundred dollars to get a dedicated business class router for your customer network.  That way everything stays separated and secure.

WiFi isn’t for every restaurant concept.  Carefully consider who you want to target with your WiFi service and what kind of customer is likely to use it.  Obviously, a fine dining atmosphere targeted towards couples out on dates doesn’t jibe well with a WiFi service.  On the other hand, if that’s your dinner crowd but you want to jump into the business lunch market, advertising a WiFi network could make a lot of sense.  Understanding your customer is key to any marketing strategy, and implementing a WiFi network is no exception.

There’s a lot of talk about customers looking for value these days when they go out to eat, and providing a WiFi network in your restaurant, provided it makes sense, is just one more way you can do that.

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Digital Media For Your Restaurant In The Digital Age

Digital Media For Your Restaurant In The Digital Age

As we get further into the Digital Age, restaurants can use digital media to their advantage.

TVs have slowly been creeping further and further into every restaurant’s atmosphere for years now.  It started with a small black and white television in one corner of the bar so guys could watch the game.  Now many bars have several HD flatscreens showing multiple games and news channels at once, and even dining areas have started to keep a TV or two positioned in strategic corners so customers can keep up on sports and information.

But as digital media permeates our lives more and more, a new era has dawned in how televisions can be used in the food service industry.  Those screens don’t have to be, and shouldn’t be, just used for sports and talking heads anymore.  That’s because the technology has advanced to the point where restaurateurs can engage customers in new ways, and because that technology is now widely available, customers themselves welcome and even expect to be engaged with digital media.

Consider some ways to leverage the digital phenomenon in your restaurant:

Advertise yourself and your specials.  Well placed digital media in your restaurant can become a great vehicle driving sales.  Not only can you promote daily specials and high margin menu items, you can drive brand awareness with digital media campaigns.  And because your medium is a flatscreen TV, it’s easy to change specials and rotate brand messaging often at almost no additional expense.  That means you can experiment with multiple advertisements and specials until you find the ones that work best.  You can also offer many more promotions without having to worry about changing menus, which give you the freedom to find new ways to attract customers.

Become interactive.  Because it’s so easy to load new content onto digital media, restaurants have a lot of leeway with trying new items and promotions. However, the only way to find out if these new promotions are working is through customer feedback.  Of course, analyzing sales is one way to discover which promotions are working and which ones are not.  But digital media can also be a great vehicle for getting customer feedback.  Interactive touch screen monitors can collect information from customers quickly and in a way that engages and entertains the customer.  Interactive digital media can even collect orders from customers and give them a direct line of communication to management.

Entertain while customers wait.  Digital media can also entertain customers while they wait for food or service, and studies have shown that customers who are entertained while they are waiting for service are much more forgiving about their wait times.  As we have already discussed, TVs have been used for decades to entertain customers in restaurants and bars.  Digital media takes this concept to a new level by allowing you to insert advertisements and branding messages about your specific location into more general entertainment.

This means you can not only advertise but intermingle that advertising with entertainment, which makes your advertising much more effective.

No doubt, investing in a digital media system for your restaurant can mean a hefty up front expense.  But if you leverage this technology properly, you can see very real boosts to sales, brand awareness, and customer satisfaction.  And boosting those three factors are vital to any business’ success.

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Social Media Marketing’s Dark Side

Plenty of national food service companies have been eager to wade into the social media world as a way to engage and recruit customers.  Dunkin’ Donuts has tens of thousands of friends on Facebook.  Other restaurants, large and small, have pumped up their online presence in recent years and the internet has become a very important medium for advertising.

But social media also has a dark side, because once you throw your brand out into cyberspace, anyone can praise it.  Anyone can also tear you down.

Take the Jack-In-The-Box example.

The national chain ran a Super Bowl ad this year in which their long-time mascot, Jack, was hit by a bus.  Jack-In-The-Box followed the ad up with a social media marketing campaign that allowed users to post get well cards for Jack.  The chain leveraged several social outlets, including YouTube, Twitter, Facebook, and Flickr.  Thousands of people responded, and a good portion were great for brand-building.

However, a significant percentage were vulgar, brand-bashing, and downright offensive.  In the “old days” (read: anything more than 3 years ago) relinquishing power over what could be said publicly about a brand was pure marketing sacrilege.

But progressive marketers these days have recognized a couple key sea changes, especially as the Millennium Generation gains buying power.

First, people 30 years old and younger in this country have been bombarded with advertising since birth.  They know when they are being pitched and they are likely to be skeptical.  Second, anything that lacks authenticity is Dead On Arrival, and a waste of marketing dollars.

Hence Jack-In-The Box’s willingness to let consumers drive their campaign, even if it meant allowing Jack to get beat up in the process.  In the end, the ultimate authenticity is a surrender of control over a brand.  The most authentic marketing is word-of-mouth, and in an era of unprecedented connectivity, word-of-mouth can travel at lightning speed.

Campaigns like the “Get Well Jack” one are ways to harness the powerful, if unpredictable, world of electronic communication.  Just be ready to experience the dark side of social media marketing, where brands are passed through the ringer by anonymous pranksters.  Luckily, most brands come out the other end bruised but truly “authentic.”

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The Economics Of Free

The Economics Of Free

Should everything be free in the new economy???

Google has profoundly affected the way business is done the world over.  Besides becoming a frequently used verb (meaning “to search”) in multiple languages, the internet search and advertising giant became an international success on a business model that has never been attempted before.

Google offers its primary service, internet search, for free.  Ten years ago, when Google started, offering anything for free was unheard of, unless you were hocking towels on an infomercial.  Google’s success has shown that such a business model is not only viable, it’s the wave of the future.

While restaurateurs probably won’t start giving away their entire menu for free anytime soon, new economic realities have forced some innovative approaches to luring customers back to the food service industry, and free has played a huge role.

Denny’s kicked off the new approach to restaurant marketing with a Super Bowl ad announcing that Grand Slams would be free for one full day after the big game.  The success of that promotion has encouraged other chains to get in on the act, including Quizno’s, who recently wrapped up a million sub giveaway through a specially created site called millionsubs.com.

A café owner in Ohio even removed prices from his menu and allows customers to pay what they want for the coffee and breakfast items he serves.  Sales and customer visits have shot up as a result.  The practice of pay-what-you-want was invented in Europe, and has become even more popular since the economy started going south.

Of course, it may not work so well if a guest can rack up a few hundred dollars worth of entrees and bottles of wine.

And there are hundreds of more examples of restaurants finding the benefits of giving something away for free.  In a larger sense, however, the advent of giving away products and services for free has become rooted in consumer culture, and once consumers get something for free, they’ll want other things for free in the future.

But the economics of free also make sense, even if they seem a little counter-intuitive at first.

First of all, your customer appreciates the gift, and if they get one thing for free, they are more likely to buy other things from you, either in the future or at the same time they redeem their free item.

Secondly, nothing should ever be free.  If your customer doesn’t pay money for the thing they get for free from you, then they should either be counted on to buy something else either directly or indirectly from the free thing or you should get something from them, like an email address or a survey.

In an information age, collecting data about your customers has become vitally important to the success of any company.  Giving something away for free is one of the cheapest ways to get the information you’re looking for.

Finally, giving something away for free is a great way to create buzz around your brand.  The free publicity chains like Denny’s and Quizno’s have gotten out of their free food promos has more than made up for the cost of the giveaways.

The economics of free are the economics of the future, and the business you can generate from giving away something for free can far outweigh the cost.  And making more money than you spend isn’t anything new: it just makes good old-fashioned business sense.

The Economics Of Free

Giving things away for free can mean more sales and customer loyalty.

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