Why did the downtown restaurant close?

The downtown restaurant opened about a year earlier. I wasn’t surprised that it closed. I was surprised that it stayed open so long. It was around the corner from my office. I walked past it every time I visited the restaurant next door – about once a week.

Have you ever watched a restaurant open and then watch it slowly starve to death? Have you ever wondered why they failed? Or did you know what they were doing wrong? Maybe you even offered constructive feedback to the staff and owners only to get a nasty look in return. We can see the self-destruction – while the owners seem to be oblivious.

Why is that? Because we see it from the perspective of a customer. The owners are engulfed in their emotional world of “It’s mine – it must be beautiful”. And maybe they keep telling themselves, “Hey, I spent a lot of money fixing up this place – people just have to see it my way – eventually”.

What business are you in?

One of the biggest mistakes that restaurant owners make is to believe that they are in the food business. Big mistake! Grocery stores are in the food business. Restaurants are in the experience business. The experience at McDonalds is very different from that at Boston Pizza from TGI Fridays from Ruth’s Chris Steak House. Yet they are all in the same business – just different segments of it.

Why do restaurants fail? It’s usually not the food. Here are three more restaurant failures that I witnessed recently in our neighborhood.

There was the Middle Eastern restaurant that offered Shwarma in a setting that looked more like a Burger King than a Middle Eastern décor. A big disconnect. And even though I lived only three blocks away I never received a flyer from them. They seemed reluctant to advertise.

Joe’s Dinner seemed like a welcome change. They advertised in the paper, on lamp posts and sign boards. Lots of promotion. However, after three breakfast visits I swore never to return because the service was very slow and the servers unfriendly. The young girls were clearly untrained and they seemed more interested in chatting with their friends than serving customers. Often three of the staff chatted openly at the bar.

I looked forward to the opening of the new English pub. The décor was impressive. The owners clearly invested a lot of money. Lots of wood, a dance floor and it was small enough to be cozy. After one breakfast visit, one lunch and two dinner explorations they were written off my list. The service made the glaciers look fast. The food was mediocre and the serving staff either failed to recognize the inconvenience or made excuses when we pointed out the short comings.

So why did the downtown restaurant fail? I suspect that the restaurant owners followed a marketing strategy of hope. Hope is an admirable personal quality. It is a lousy marketing strategy.

I never visited this restaurant because it did not look inviting. I walked past at lunch time on a snowy day and the sidewalk wasn’t cleaned. It looked uninviting.

It had floor-to-ceiling sized windows across the front – but it always looked dark inside – as if the lights weren’t on. I was never sure about the cuisine although it hinted at Italian – which is my favorite. It never looked busy, and oftentimes looked closed. It lacked music that might have suggested excitement to invite folks in. I saw nothing that looked like a grand opening. I saw nothing special going on. Although my office was just around the corner, I never saw an announcement or invitation. I never saw anyone standing outside to welcome passers-by from the main street of town.

Imagine if they had done something just a little different to create excitement. Imagine if they had put balloons outside, hired dancers, held free draws, sponsored a charity event, knocked on doors, offered coupons, distributed menus, invited service clubs to meet… something.

Well, too bad that it closed; I was thinking that I might check it out one time. The food might have been superb. But restaurants are not in the food business. They are in the experience business. They failed to invite me in, which is the first part of the experience.

This downtown restaurant failed in early 2006 – long before the current turbulent times. You can imagine that the business owners probably blamed the market, the location or luck instead of their own lack of marketing. Those business lessons are even more important today. Many businesses will fail over the next few years and the owners will blame the “market” instead of being responsible for their own success or failure.

They had a good location and the economy was good yet they still failed. Location is not the panacea. Luck comes if you do enough of the right things. Business will fail in good and bad economies. Only the excuses will change.

Learn from the lessons of these failed restaurants. I recently spent over $100 on dinner for two at a fine dinning restaurant. The service was fabulous. We would go again. Be very clear on the experience you must deliver. If you run a restaraunt you are not in the food business.

©EA George Torok is co-author of the national bestseller, “Secrets of Power Marketing”. To receive a free copy of “50 Power Marketing Ideas” and your free subscription to Power Marketing Tips visit http://www.PowerMarketing.ca George Torok is a motivational business speaker who speaks to entrepreneurs, corporations and associations. http://www.business-speaker.biz/

Whenever we decide to run an e-mail marketing campaign, we tend to agonize over the content and how to maximize our results. The first objective should always be, what are the results I’m trying to achieve with the campaign? Who am I targeting? These are critical questions that must be answered before you can ever hope to have a successful e-mail marketing campaign.

My wife and I own a Prime Steak House and due to the economic times have had to reposition our dinner menu, we now offer an eight item menu of dinners priced twenty-one to twenty-eight dollars and each entree includes two sides. This is a major shift from our initial a la carte menu we offered when we first opened. The word on the street is that we are a pricey restaurant and to avoid unless you bring your checkbook, or are celebrating a special occasion. Our goal is to re-educate our customers through our new menu and multiple advertising campaigns. We recently ran a campaign where we sent an offer to our top two thousand rewards customers, the offer was a buy one, get one free. The offer was for our new menu items only. The results were fantastic and I honestly feel we are on the right track towards re-educating our clientele. Direct marketing through the mail is a great way to get your message out; it brings in the best results, although the price can be prohibitive.

We are now assembling an e-mail campaign to try and expedite the process and start a viral marketing campaign. The results we are trying to achieve are to bring in all the rewards customers we have that have never visited our Steak House. We own two other restaurants that are casual and upscale casual, in total our three restaurants have over twenty three thousand rewards customers. Our goal is to tap into this massive database and make it work for us, driving in as much new business and first timers as possible, including friends and family of our rewards members.

In the past, this type of campaign would have been too costly to direct advertise to our entire database. The key is to make sure when you capture your customer’s information; you get their e-mail address. We have over ten thousand current e-mail addresses. Our objective is to take these ten thousand plus addresses and leverage them. We are going to send out an offer to our rewards customers, thanking them for their patronage during this awful summer weather we’re having and let them know the weather might keep away the tourists; but thankfully our faithful members never let us down. It is for this reason we will give every member an offer to come in and dine with us and receive the second entrée half off. We will then give our members the ability to forward this e-mail to their friends and family. If every one forwarded this e-mail to two to four friends, the results would be staggering. I’ve never launched a campaign of this magnitude; I think the potential results could push our summer business over last years. In this economy, if you can grow your business, you’re in the minority. Our goal is to maintain our relationship with our customers and create a win/win situation where everyone benefits.

Communication is the key to marketing, leveraging your database in a viral marketing campaign can unlock the results you’ve only dreamed of. What are you waiting for, put your database to work for you today. One last thing, if you unleash this potential onslaught, you’d better be staffed and be ready to handle the business. The last thing you want to do is have the results turn into a negative.

Richard Varano
Restaurant Masterminds

 There are two ways to approach a downturn in the economy. The first is the “Chicken Little” approach — running around saying “The sky is falling, the sky is falling!” Unemployment is up, disposable income is down, and the public’s ability to spend has decreased. While all of this may be true, wallowing in depression about it is not going to increase your sales. Negative thinking often leads to the cocoon effect, where you decide to circle the wagons, cut back on everything you can (especially advertising), and just hope you can survive the storm.

• Restaurant Marketing Secrets

While a lagging economy can offer a great excuse for a downturn in sales, you still have to ask the hard questions about why you’re not growing. During these tough times, I’ve seen similar units in the same town experience opposite results. One is enjoying double digit growth, while another watches the losses mount – same region, same weak economy. The difference is in the drive and the motivation of the manager to make sales happen. There truly is something to be said about the power of positive thinking, when it’s backed up with a lot of hard work!

To get your momentum moving in the positive direction, keep repeating the mantra, “They still have to eat.” Whether they’re rich or poor, they still have to eat. Whether they’re on the job or at home collecting unemployment, they still have to eat. And they still want the convenience of having someone else do the meal preparation that they’ve come to expect. They may not eat out as often, but the choices are still being made, and you just want to make sure they make you their number one choice. And during a slowdown when others are cutting back and waiting for better times, you have an opportunity to reach their market and increase your customer base! It all depends on creative marketing

There are so many different ways to market, but in a down economy just placing an ad in the local newspaper is not going to get the job done. Creative marketing focuses on driving customers through your doors. It offers an element of interactivity. It gets your customers involved.

If you need some new ideas to jumpstart your marketing, you need Restaurant Marketing Secrets!

There’s no question about it: If you own a restaurant, you want repeat business. Consistently serving good food and providing excellent service is a huge part of fostering customer loyalty. However, it never hurts to stay in touch with your customers and remind them to come back. E-mail marketing is one of the most powerful and cost-effective ways to do just that.

Larkin’s on the River
Constant Contact Restaurant Success Story

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Consider this: A study in 2009 by Direct Marketing Association found that every dollar spent on e-mail marketing yielded a $43.62 profit. No other form of direct marketing they included in their study performed this well, not even direct mail catalogs.

People have become so accustomed to most forms of advertising that they’ve learned to tune them out. In some cases, the ads aren’t reaching them at all. Devices like Tivo, for example, filter out commercials so they can watch their favorite TV shows without interruption. Direct mail often ends up in the trash before it even gets opened. Telemarketing has been crippled by the National Do-Not-Call Registry. But nearly everyone is online now, and personalized e-mails are getting their attention.

If you make a point of collecting your customers’ e-mail addresses, you can easily invite them back for a free slice of cake on their birthday. You can also send coupons, tell them about something new you’ve added to the menu, offer your catering services, and let them know about special deals. You could dress up your e-mails with eye-popping pictures of your most delicious entrees. Maybe your customers weren’t even thinking about going out to eat before they received your e-mail, but now that you’ve reminded them of your fine cuisine and made them hungry, there’s a good chance they’ll show up at your restaurant for dinner.

It gets even better: E-mail marketing is much cheaper than direct mail. Let’s compare: At 28 cents a pop, mailing postcards to 500 addresses would run you $140. That’s not even including the expense of having them designed and printed. But how much would it cost to contact those same 500 people via e-mail? Using the tools of an e-mail marketing service such as Constant Contact, it could be as little as $15 a month.

In short, keeping in touch with your customers through e-mail is powerfully effective and costs very little. If you’ve been searching for a way to dramatically increase your restaurant’s business without breaking your budget, you don’t need to look any further than e-mail marketing.

The continuous mission for every restaurant owner, even successful ones, is to increase restaurant sales. With so many dining establishments vying for a customers business, effective marketing measures are key ingredients for attracting customer attention, establishing your restaurants identity and enhancing customer loyalty.

Word of mouth is the most cost efficient way to increase restaurant sales. If you present a wonderful dining experience, patrons will naturally refer your restaurant to others. But word of mouth works both ways. Bad reviews often travel faster than positive ones. Thats why its essential to be consistent in providing excellent customer service, quality food and an inviting atmosphere.

While chain restaurants rely on a corporate formula to increase restaurant sales, independent restaurateurs can be more flexible, giving them a greater advantage. One important strategy is getting to know your customers. Theres a reason why clubs, theater groups, business people, or friends who get together weekly only dine at one particular restaurant. Its because the owner greets them by name, knows their dining preferences and is aware of things going on in their lives. These restaurants have created a trusting, family environment that builds customer retention.

Without a doubt, rewarding repeat customers can lead to increased profits. If you know a customer has referred others to your restaurant or consistently brings in a group of business associates, consider giving a gift certificate for a complimentary dinner or providing a free appetizer or bottle of wine for the table. This is a great sales tactic to motivate your good customers to bring in business to your restaurant.

Your staff is an integral part of building sales. Besides providing impeccable customer service, your staff can increase restaurant sales by up-selling to increase the table check. Rather than ask if anyone would like a drink, appetizer or dessert, they should note which ones are house specialties or offer their personal recommendations. They should also promote higher priced dishes with reasons showcasing their value.

A comprehensive advertising and marketing plan is essential in growing and maintaining a profitable restaurant business. Your advertising needs to set your restaurant apart from others and pique a persons interest to try it. Your marketing efforts should be both in-house with promotions and in the community. Have a presence at community events within your service area, network with business and trade groups, or get involved with a charity that is of interest to you. The more visibility you can give your restaurant, the greater your market reach.

Using the Internet to increase profitability is a must. Your restaurants website should be as interactive as possible, allowing people to make reservations, see current specials and easily get directions. Have a presence on social media sites, like Twitter, Facebook and LinkedIn.

Incentives take on many forms, but all have shown to increase restaurant sales. Some examples of common incentives are discounts, coupons, punch cards, customer loyalty programs, business card drawings, promotions and special events. You might want to try a combination of incentives to enhance business.

Jose Riesco worked in the IT industry for 18 years and owned a restaurant. Jose has brought top proven marketing practices to the restaurant industry, making a unique contribution to this business. By creating a unique client-centric Strategy, restaurateurs will be able to dramatically increase their sales while having happy and repeated clients. To find more about his Restaurant Marketing Strategies visit: MyRestaurantMarketing.com