Why is marketing not improving my restaurant sales?

Many of the restaurant owners and managers we speak to have tried, or considered marketing activities or campaigns to boost their sales. Unfortunately, only a few of them have seen actual growth. Most of the restaurant brands we analysed are making a loss in terms of ROI associated to their marketing activities. In this short read, we highlight a few starting steps for restaurant owners to take in order to increase the profitability of their marketing activities.

Market fit is not refined

Selling to people who do not really relate to your brand, or do not really want to try your food is an uphill battle. This makes marketing efforts inefficient and creates unnecessary costs in the long run. Before jumping into marketing, restaurant owners should look at 3 basic lines of questioning to evaluate if their brand is ready for marketing.

1. What do your Google reviews say: Are the issues raised in complaints and negative reviews now resolved?
2. A specific target audience group: Can you describe your customer profiles in great detail?
3. How do customers rate the brand: What are customers rating your pricing, quality of food, atmosphere and the overall experience of dining with you?

Should there be any concerns that are unresolved within these 3 points, you will likely have to address them before even thinking about starting any marketing efforts. Failure to do so will result in poor performance and disappointment.

Restaurant brand image does not align with target audience

The customer in today's world is very different - the way they share recommendations, find new restaurants and make decisions to visit a business. In order to keep up with the digital era, restaurant owners must change the way they communicate with their target audience. The first step is to create an impactful and lasting impression - this means the way you present your brand online should be refined and consistent. Here are some steps you can take to address this concern:

1. Use branding guidelines to keep the presentation of your brand consistent online
2. Engage professional food photography services to make your food desirable on social media and your website
3. Develop and execute a social media content marketing plan that is consistent to your brand's messaging

These points help keep your restaurant's brand consistent and easy for customers to understand. The easier it is to understand, the more a person can relate and desire what you have to offer. Although branding may be an investment for the long term, it drives up the efficiency of future marketing efforts and the value of your brand.

No initiatives for optimising repeat customer spending

For every restaurant, there is a small pool of customers that spend frequently and spend the most. These are what we call "high value customers", and the customers we want to spend the most amount of effort to acquire and retain. Most restaurants focus on the acquisition of new customers, but do not spend much efforts in the retention of their high value customers. This becomes problematic as the restaurant is constantly pouring in money to convince new people to try their offerings.

1. Analyse your POS and CRM data to understand who your high value customers are
2. Build your retention strategy based on your new understanding of these customers
3. Engage with these high value customers through loyalty programs, email, WhatsApp and SMS marketing efforts
4. Measure and track the spend and frequency of your high value customers to evaluate if these efforts are achieving results

No evaluation process to improve efficiency of marketing activities

From the restaurants, bars and cafes we have worked with, this is the most overlooked step. Evaluating the profitability and efficiency of your marketing spend is important when things are not working out. It is even more essential when things are working out - How will you repeat success if you do not know why a certain marketing effort has worked?

1. Estimate the expense that goes into each marketing activity
2. Estimate the added value of these activities - While some activities such as Influencer Marketing can be difficult to measure, you may use metrics like Earned Media Value (EMV) to estimate its value
3. Put more emphasis on activities that are closer to revenue (e.g Delivery app ads),
4. Track the added value of each activity frequently (at least quarterly) of these activities
5. Make decisions based on what the numbers say - Which projects are bringing in the most added value?

If you are unsure on how to implement these steps, book a free evaluation call with LAEMDA today.