Is advertising worth the expense?

29 June 2006
Is advertising worth the expense?

There's been a dip in sales at my restaurant over the last two months and I need to take action. Is advertising worth the expense?

Robin Houghton, enewsworks
First, identify the reasons for the dip. Some factors may be outside your control, such as new parking restrictions or a new competitor. Then again, your problems may be in-house. Has service slipped? Are staff disgruntled? Fix any problems first, or your marketing could do more harm than good.

Advertising is the most expensive form of promotion and the hardest to measure, so consider the alternatives first:

  • Timed sales promotions can bring in new custom. But don't rush into the same old "free bottle of wine" offers. Be creative and different from your competitors. Partner up with another business to share the costs and benefits.
  • Go easy on price-led promotions - you may end up sacrificing long-term profitability for a quick fix. And "money off" attracts the type of customer who is the least likely to remain loyal.
  • PR - woo the local press. Do you have any newsworthy angles to exploit? Identify the local opinion-makers and invite them to your restaurant.
  • Word of mouth - raise your profile locally by offering to host business lunch clubs, awards ceremonies, corporate functions and charity events.
  • If you don't already, start asking customers for permission to contact them by mail, e-mail or text. It's at times like this that your database is most useful. Satisfied customers are the easiest and most profitable to market to.
  • Run an advertorial or competition with your local paper rather than just an advert. A competition not only generates publicity but also a list of qualified prospects which you can then market to directly.

No single thing will turn your business around. You need a marketing mix.

Carol Godsmark, author & restaurant consultant First of all, what time of the year concerns you? There are natural dips in sales in the restaurant trade because of seasons or location. Can you add cookery classes, chef demonstrations or outside catering? Target the corporate market with special lunch deals, two-for-one deals, themed evenings, wine tastings, or consider writing for a local or national magazine or newspaper.

To advertise or not? Look through your local papers and you'll see the same ads, generally ethnic restaurants or ones belonging to a chain that can afford the luxury of advertising.

As a past restaurateur at a small independent upmarket country restaurant I rarely found it effective to advertise. Use other marketing skills to get your message across: an entry in Yellow Pages, strengthening media relationships, mail-shots, a regular newsletter, menu handouts, a strong website, local tourism publications, and entry in a good guide.

Does your local tourist information office have an eating-out list? Be on it if you're a rural or small-town business.

Word of mouth is one of your most effective marketing tools, with one satisfied customer extolling your virtues to between five and 10 people.

If you do advertise, examine your local newspapers. Are you targeting the right audience? Check the circulation, readership, the best day to place an ad, the best section. Proofread your copy carefully before agreement.

But first re-examine your strengths and weaknesses. Could you improve the menu, cooking, decor, service, welcome, pricing? Is there a new restaurant taking over some of your trade? If so, look at the above suggestions to reinforce your business.

Final thought: a good review will see your business rocket without advertising.

Paul West, Ignite Marketing You should immediately ensure there hasn't been a drop in food quality or service. Gather feedback from your customers and make sure they're happy. If they're not, fix that problem first.

It's helpful to monitor customer opinion on a regular basis using feedback cards, which are also a useful means of collecting customer contact data for your database.

Advertising is not the only answer, as it can be very ineffective and expensive.

I recommend the following ways to try to increase sales:

  • Build a customer database by collecting business cards and e-mail addresses when taking reservations or by using comment cards or loyalty systems. Send these people regular newsletters with special offers and invites to wine- and menu-tasting events.
  • Try a summer barbecue, Pimm's evening or whatever special event suits your style of restaurant, and promote these locally.
  • Local newspapers are ideal for informing consumers of special promotions. However, you must ensure that these are response-based adverts that highlight a special offer, eg, 50% off lunch menu by completing your details on the attached voucher.
  • If possible, try to ensure an editorial accompanies your advert. You can use advertising in the local press as a means to negotiate editorial coverage. Pitch a recipe or competition prize as a PR exercise.
  • Communicate with local businesses by holding a business lunch at which you can introduce a new summer menu and promotion. Give these businesses a corporate discount card for future use to encourage regular customers.
  • Be creative with your promotion as it will provide a far greater return on investment than basic advertising.

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