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Restaurant Marketing: Your Focus Shouldn’t Be On Social Media

I arrived in Madison, Wisconsin last week to do a restaurant marketing workshop for Sysco and was looking for a place to eat. Obviously in a strange town and no one around to make recommendations, I pulled out my trusty iPhone and downloaded the Yelp app.

Immediately, I got hundreds of restaurants with thousands of reviews. I searched for some restaurants in my area where my hotel was located—because Yelp is GPS enabled—read the reviews and made my choice. It was that easy … and thanks to those who had already visited that restaurant and submitted a review, I made the right choice and had a great dining experience.

This is how many will decide which restaurant to choose—online referrals from other people who have dined at your restaurant.

This experience really drives home the point that your guests can control your destiny. They can make you really successful and fabulously rich. They can create a buzz about you that no one else can. But it’s all up to you.

Ironically, as our guests are moving to “hi-tech” sources for their information and referrals, restaurants need to focus on “low-tech” marketing to be successful. That means, mom and pop marketing, the principles of mayor marketing; making connections, wowing your guest and their dining experience. The list goes on and for those who have been with me over the past years, you know what I’m talking about.

So, while other restaurants are focusing their attention or bragging about building the “largest” list of facebook fans—by attracting customers with discounts galore (that sounds familiar) and truly believing that these “fans” are the end-all and be-all of loyalty to your restaurant, (c’mon, who are we kidding here) … I urge you to focus your attention on your guests and their dining experience … from the nano-second they drive into your parking lot.

And what does this have to do with Facebook? Here’s the million dollar tip to having a winning social media program that you won’t find at any workshop (other than mine) or in any book—If you’re successful at Wowing your guests, they’ll handle your social media marketing for you.

Joel Cohen regularly blogs about  Restaurant Marketing. Through consulting and speaking, he focuses on specific principles of restaurant marketing, such as planning, differentiation and how to WOW guests to increase sales.

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The Yelp Drama Continues

The Yelp Drama ContinuesI’ve written several times about Yelp – a San Francisco based website that collects and publishes reviews about local small businesses in many cities across the country.  Naturally, restaurants are one of the most commonly reviewed businesses on the site.

Over the past year a steady grumbling has risen about the way in which Yelp pursues advertising revenue – by calling small business owners and offering some small review manipulations in exchange for a $300 – $1,000 monthly fee.  That grumbling arrived at a crescendo last month when several businesses filed a class action lawsuit accusing the company of extortion.

For their part, Yelp has always maintained they do not manipulate reviews and that they are simply trying to provide a service to consumers and an advertising channel to businesses.  Yet two factors have left the majority of business owners suspicious: the fact that businesses who pay the monthly fee get to pick the top review on their company’s Yelp profile, and the murky process the site uses to filter reviews (many have long been suspicious that advertisers get preferential treatment).

Last week Yelp decided to address these two primary concerns with an important announcement.  First, advertisers will no longer be able to choose their top review.  Second, Yelp is throwing open the door and shining some light on the process they use to decide which reviews get deleted, which ones stay, and how the site decides to rank them.

Yelp’s leadership remains confident these measures will exonerate the company from the myriad “conspiracy theories” with which they feel the public has victimized them.

Yet as far as I can tell, Yelp’s practice of using hard sell tactics (calling up business owners and pressuring them to become advertisers) will remain.  As I wrote in February, the trouble with Yelp is not their murky review ranking process, their hard-charging salesmen, or their preferential treatment of paying advertisers.

The real problem is the inherent negative motivation the company’s business plan creates: pay Yelp to get people to stop saying bad things about you on Yelp.

No one likes how that feels.  And I imagine Yelp’s public relations problems will continue unless they change this basic truth about their approach to online reviews.

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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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Yelp Has Restaurant Owners Suspicious

The online restaurant review site Yelp has become increasingly suspicious to the small business owners who the site supposedly supports.  The website is based in San Francisco, where it is also the most popular, although Yelp does post reviews about restaurants in 24 cities across the United States.

Restaurant and small business owners in San Francisco, Chicago, and New York have complained that Yelp employees use bad reviews as a way to cajole them into becoming a sponsor of the site, which costs anywhere from $300 to $1,000 per month.

Many owners have reported receiving repeated phone calls from Yelp representatives, particularly after a couple bad reviews appeared on the site’s entry for the owner’s business.

Since it is known that Yelp employees and third party contractors hired by the company have written reviews for the site, suspicion runs high among restaurateurs that Yelp is posting bad reviews as a way to get them to sign on for the monthly sponsorship fee.

For its part, Yelp denies manipulating bad reviews as a sales technique.  But the main problem is that the review ranking system on the site isn’t transparent.  Nobody really knows how Yelp decides which reviews go to the top of an entry on the site.  Sponsors paying the monthly fee are able to decide which reviews appear in the top 5, and this is the primary motivation for them to sign up.

But restaurants that refuse to shell out the money and have many positive reviews seem to be dogged by unfair reviews that consistently appear at the top of their Yelp entry.

Others pay the money, but only because they feel they have no other option to preventing bad publicity.  This is especially true in San Francisco, where Yelp is used by a majority of customers searching for restaurants and other service based businesses in the city.

One popular San Francisco restaurant, Delfino’s Pizza, has fought back by taking some of the more ridiculous negative reviews posted to their Yelp entry and printing them on T-shirts that staff wear while at work.

This subversive tactic has stimulated some good response from customers, and it raised another question about the site: how much do anonymous, unqualified reviews help or hurt a small business?

Either way, Yelp clearly has a customer relations problem, which they have begun addressing in earnest on their blog.  It remains to be seen if Yelp will be seen as a valuable asset or an annoying liability to the small businesses it covers.

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Is Yelp Helping or Hurting You?

If you responded to this question with a confused look and the response “What is Yelp?” then you’ve got a lot of catching up to do.  Forces have been at work that you didn’t even know about, and that can be a scary thing.

Yelp is an online review site for restaurants, bars, retail stores, and spas.  Users post their reviews of these businesses, and many others read reviews to help them decide where to eat when dining out.  Which means that Yelp could be helping or hurting you right now, depending on the nature of the reviews posted about your restaurant.

The problem is, your competition can also post a review about you that is probably less than accurate, hurting your chances of converting those increasingly scarce customers into visitors to your restaurant.

It’s a dog eat dog cyberworld out there and Yelp has become a key battleground for the hearts and minds of stingy customers.

Yelp takes advantage of this situation by allowing restaurants to pay to have bad reviews suppressed and good reviews highlighted.  These “sponsorships” start at $150 per month and comprise Yelp’s primary source of revenue.

Some restaurateurs love Yelp.  Their clientele use the site on a regular business and the favorable listings and review postings given to sponsors means a noticeable increase in business that more than justifies the cost per month.

Others view the monthly payment as necessary to prevent bad reviews from hurting business.

Regardless, less than 1% of the businesses reviewed on Yelp have become site sponsors, which is probably more a function of restaurateur ignorance than an unwillingness to pay for a sponsorship.

No matter what, anonymous, user-generated online reviews are the trend of the future, and the day is not far off when most potential patrons of your restaurant will learn about you through Yelp or a similar site on the internet.

It’s therefore up to you to at least know what is being said about your business online, and figure out how your customers are hearing about you.

Conduct a survey of customers to gauge how many came to you as a result of an online review site like Yelp.   Track reviews on the site and ask loyal patrons to post reviews.  You could even offer a free appetizer or other incentive for posting a review.

And if you find that a large portion of your clientele is using Yelp to find and learn about your restaurant, perhaps a sponsorship is the right route to take.

The younger and more urban the customer base, the more likely the need for you to reach customers through new media like Yelp.

Either way, take the time to learn where your customers are coming from and what people are saying about you on Yelp.  Knowledge is power, and you can’t afford to not know what’s being said about your business out in cyberspace.

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