A solution that has become a problem
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 problem(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 food court. 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 up selling and cross selling you will not be able to find a way out of the downward spiral. Offers need to be time limited other 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.