Throwing Money Down The Toilet
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 entrÃ©es 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.