Throwing Money Down The Toilet

Howard Tinker – Thursday, November 12, 2009

Throwing Money Down The Toilet…

Maybe not the nicest of images but I’m sure you get the idea.

I recently attended a book launch at a local restaurant.  The event was good the food was good, the speaker great but the mistakes the restaurant owner/ manager and staff made was the equivalent to standing over the toilet bowl throwing $100 bills down the pan for the few hours that the event was on.

I counted eleven money wasting mistakes that were made: things done poorly, other things not done at all, opportunities ignored or overlooked (and non of it had to do with the food!).  

There were things on the night that would have brought in thousands of more dollars for this place but sadly they missed out.  Sadder still when I wrote to the manager offering to tell him in detail what I saw, so he could put it right before his next event I didn’t get so much as a reply.  So unless they have had some massive insight into marketing their business, I guess they will continue to throw money down the toilet all summer long while they parade author after author through the place.

So what were the mistakes?  Well here are just a few of them….

1. As far as I could tell they did no direct response marketing into their catchment area before the event in order to put more bums on seats, it seems they left the marketing to the book shop?

2. They did not collect a database of attendees – prime targets for the next events they have organised!

3. No marketing to attendees after the event (hottest time to sell) to get us back to the restaurant or to other upcoming events.

4. They did not sell entrées on the night, instead they gave them away – meaning we didn’t feel hungry enough to purchase any extras and they lost tons in potential profits!

5. They did not have recommended wine of the night / beer of the night – something that could have been set up with a vendor to maximise profits.

I’ll keep the other six items for my clients and for the manager if he ever does call me.

Just on point 2 (collecting a database) you really have to get this one.  It is the heart and soul of your business.  It is where you can generate all of your profits from… just have a look  this…

Just before the Melbourne Cup I sent out an email reminding my members to collect a database by running a draw at their Melbourne Cup lunches.  I advised using a business card draw or a simple entry form.

This is the power of taking action

 

Late on the afternoon after the race I got this message from one of my coaching members:

I just counted up our competition entries … we got 80 out of 100 who dined with us today (and we gave away extra prizes our suppliers gave us so it didn’t cost us a THING!) THANKS. 

Lets look at the LIFETIME value of these people to this restaurant now…

 

If those 80 people can be encouraged to visit once every 2 months that would mean 480 visits a year.  Average spend at that restaurant is $140.  So 480 x $140 = $67,200 per year.  Lifetime of a happy customer is 5.6 years, so if we multiply that $67,200 by 5 we get $336,000 in potential income. 

 

My clients are getting more than 6 visits a year from their happy customers and we are increasing dollar spend all of the time so the $336,000 is on the low side.  But still it’s more than most won on the Cup!  AND I wanted to remind you of the benefit of capturing and USING a database and marketing to it!

 

That same client sent me this message the following morning and it serves as another great lesson, this time on pre-planning your marketing:

“Also when the marketing works it REALLY works … we were fully booked and paid for 3 weeks before Melb Cup.  Because we put out our Melb Cup Lunch before any of our competitors … 2 things happened …  1. We had over 500 people booked across our 2 pubs and restaurants (never has happened in our history)  2. our competitors were still sending Melb Cup emails  yesterday about booking with them.   YAY … nice to win!!!”

I am now working with this person on marketing for Christmas, New Years and January.  Again she will be phenomenally successful because she is prepared and she will make sure that her marketing goes out…  Will you?

By The Way… The restaurant with the book launch also had around 80 guests in on that night so could have generated a similar list and could be expecting similar results!  But they didn’t - Maybe the manager will ring and I can help him to make it happen the next time? 
 
If you need help making your restaurant a winner please call me I promise I don’t bite (02) 4384 2001.

Howard

Were You One Of The Winners In 2009?

Howard Tinker – Friday, December 04, 2009

How Many Restaurants and Cafes Won Awards This Year?  How Many Owners Really Did Anything Useful About It?

My client Michele Menchin (Taste Gourmet Cafe) won Best Cafe on The NSW Central Coast again this year.  And because she is an active “Tweeter” (person using Twitter), facebook user, email and and SMS marketer she blasted out the news to her customers, ”friends” and followers.

The Result: She and Brian have been absolutely swamped with customers ever since.  I went in to congratulate then on Friday around 2.00pm and couldn’t get a seat in the place.  Business is BOOMING!

The Bonus is that Michele sells her own private label Gourmet Produce in the Cafe and 30% of her sales happen in December.  She is now doing everything she can to cash in on her success including using on line video (see below), A Christmas Newsletter and Colour Catalogue, Tasting Evenings, Long Sunday Lunches, Live Music, email and snail mail marketing, new signage, an on-line shop and of course website and social media strategies too.

Over The Last few Years Michele has sold incredible sums of Gourmet Food Retail Products from her business, many items she has had made specifically for her.  She is due to show you how any restaurant or cafe owner can cash in on this untapped profit stream at next years Restaurant Profits Bootcamp in Melbourne February 2010 - so watch out for news of that.  She will also show you how to use FREE Social Media to get a nice stream of customers seeking you out too.

Watch Michele’s Video Below To get A Sense of what she does so well…

 

Howard

A solution that has become a problem.

Howard Tinker – Thursday, January 28, 2010
Yesterday lunch time I had time to kill before an appointment so I visited a restaurant that had intrigued me – it always appeared to be empty.  I figure I can learn from both ends of the spectrum so I went to see what the prblem(s) were.

I won’t name the place as that’s not going to do any good but I will tell you a little about it’s situation; the place is in a quiet quarter of a busy shopping mall, a restaurant courtyard if you like.  They are surrounded by other restaurants and cafes but walk by traffic is small compared to the shopping areas and the fast-food foodcourt.  Non of the restaurants appeared to be doing well but some of the cafes were half full.  The typical response to the problem was to offer a seven day lunch time special deal and most were priced between $10 – $13.

So I took a seat at this place and ordered from the specials menu.  There were only two other diners and we were like peas in a drum sat in the massive dining area.  The waitress had lots of time and took the opportunity to be friendly, I asked about business and before long she asked what I did.  Two minutes after I had finished my meal the owner was at my table and we were discussing his challenges and believe me there were a lot of them. A biggie was that he was a franchisee and all marketing decisions were taken at head office despite he having “local issues and needs’ that needed addressing with targeted marketing.  He did have a small database but again communication was from head office so it was sporadic and not targeted to this restaurants needs.

The owner told me that the Lunch Time Special was a “break even” offer to attract customers.  I have no problem with this – I completely understand life time value of a customer… BUT and this is the real kicker here… once they had attracted me, they did nothing to get me to sign up for their loyalty club nor did they offer me a second drink, breads or dessert.  If you are going to use a loss leader to attract customers – you must make sure that your staff: 1. give a WOW experience to everyone who comes through the door. 2. up sell and cross sell so that you don’t go bust while waiting for repeat visits. and 3. they capture diner’s details so you can get them back in again.  (Yes they had a sign up form on the table but they didn’t suggest that I fill it in or tell me about all the benefits I would receive from being a member – and that includes the owner not just the waitress).

By running constant (seven days / 365 days) ”break even lunch time specials” you also run into another nasty problem… What if I do like your offer and start to frequent your place regularly?  But what if you are serving “sub standard” meals to break even and low staff numbers to cut costs, I get it that you are a budget place – but that’s ok for a cheap and cheerful lunch.  When you go to increase your prices I will go to the next budget place because “that’s the reason I am dining with you” and If I want to dine out on an evening I will probably take my partner to somewhere where I know we will get a good quality meal and service.

So we now have a problem that is caused by the “solution” (lunch-time specials) that we had come up with.  If your staff are not giving a WOW experience to customers or upselling and cross selling you will not be able to find a way out of the downward spiral.  Offers need to be time limited orther wise they become “the normal way of doing business” and the public will brand you as such – the budget place.

Marketing your restaurant requires several factors working at once – offers, constant communication, salesmanship, off-line methods as well as on-line methods, joint ventures with other businesses, multiple streams of income besides dine in and someone to drive it.  Too often marketing is an after thought or something to be suspicious of rather than THE driving force behind your restaurant.  get it wrong and it’s bloody frustrating.  Get it right and you can be laughing all the way to the bank (like my clients).

To understand how to make your restaurant profitable – even wildly successful join me at our bootcamp next month – it’s not rocket science but you do need to learn what to do and what not to do.  Click here to learn more.

Nine Email Tips

Howard Tinker – Thursday, February 04, 2010
Yesterday I met with a group of Tweeters at MuMu Grill in Crows Nest, NSW.  During the meeting I spoke about these Nine Email Tips for increasing response to email marketing.

Below is a videos of The Nine things you can use to increase opening rates and clicks on your emails
Plus a place to get a great report on the best words to use in email, what to say in subject lines etc…
Click here to book in at the bootcamp now For the FREE email account I use click here