It’s competitive out there: According to research from the National Restaurant Association, 47 percent of operators expect competition to be more intense than last year. To be sure, the number of tools that operators have at their disposal to collect data and draw conclusions from it are raising the bar for competition. But despite the reams of metrics operators can study about their business, gaining an edge (and building authentic connections with guests) still really comes down to traditional marketing and public relations – knowing who you want to be, understanding your audience and why people come to you, and then crafting options and offers that fit neatly into their lives. This is especially critical if your business looks very similar to others in your neighborhood. A recent report from Modern Restaurant Management demonstrates the power of understanding your uniqueness in a crowded field. It shared case studies of two coffee shops operating in similar environments – they were in comparable city locations, had many competitors nearby, and had similar menus and interiors. On the surface, one might think of these businesses as interchangeable. But one business positioned itself as a destination for people working in nearby corporations, while the other positioned itself as an expert about coffee. This key difference was the seed that helped the businesses craft distinct events, social media posts, menus, atmospheres, you name it. So what makes your business unique? Understanding this and communicating it clearly to the public is the first step in building the loyalty that your restaurant needs to succeed. Your loyalty program members are valuable – but do you know exactly how valuable? A recent Paytronix study may provide some insight. It collected in-store and online transactions for full-service restaurants, quick-service restaurants and convenience stores that occurred between January 1, 2020 and June 30, 2023. The results confirmed that active loyalty program members are climbing steadily, with FSRs seeing a 16 percent increase in members and QSRs seeing a 24 percent increase over the course of the study. But how these people are spending is more telling: The research found that in 2022, FSR and QSR active loyalty members had check sizes that were at least 5 percent higher than those of non-loyalty members. Further, the top 10 percent of active loyalty program members were responsible for nearly half of all loyalty visits (and spending) across concepts. These guests are true VIPs. In your restaurant, are they getting some special focus? There is a lot of noise in the loyalty space right now, with restaurant brands making bold offers aiming to grab people’s attention and generate increased program participation. But the offers may not even be practical for most guests. Drilling down on the data you have about your best guests will always be most helpful in determining how to take care of them. What do these guests love about your restaurant? Is it your homemade pasta? Your inventive desserts? Your friendly staff? Can you build an event, a reward, or simply include a personal touch around these elements for your best guests? The reach of social media can make it easy to reach people far from where your business is operating – and to be sure, it has helped some brands expand to new audiences as a result. But that opportunity for scale can be a distraction if there is more you can be doing to connect with the people who live in your neighborhood. A recent Forbes report notes that more restaurants are refocusing their marketing on their local communities, while also reaping benefits from technology that can capture business from the area. There is good reason for it because local marketing efforts have a lot of potential power right now: Research has found that nearly half of all Google searches include local intent and 97 percent of users search online to find a local business. When they do, nearly 25 percent of all clicks and mobile taps end up going to the first result listed in a local business search. To take best advantage of potential sales in your community, make sure you’re appearing high up in local online searches. Your Google My Business listings, use of local keywords, and positive guest reviews can all help boost your local SEO. Think of your local community and culture when you are planning your menu, sourcing special ingredients to feature, and considering who can appear at your events and help you get the word out about them. Mine your data to better understand cultural preferences and seasonal demands as you craft promotions. On social media, use geo-targeted ads and engage with the networks to interact with guests and encourage positive reviews. When global events occur that you want to support in some way, act locally by supporting or promoting a related local cause. Consumers can be tough to please – and when you add higher menu costs, smaller portions and substitute ingredients to the mix as restaurants have had to do in recent months, it becomes extra challenging to try and win guests and retain them for the long term. But experience still counts for a lot – it’s what is making people choose restaurant meals over meals at home right now – and your restaurant can provide it in little (sometimes free) ways that pay off with guests. Consider how well you’re managing these parts of the restaurant experience: Be prompt with your greetings when people walk in the door. Offer water to guests waiting for a table and promptly collect drink orders from guests who are seated in your dining room. Encourage your staff to recommend dishes to guests – it demonstrates that they care about (and enjoy) the food they are serving and it presents your employee culture in a positive light. Take care with cleaning your dining area and restrooms. Leave people with a positive final impression by making your guests’ exit from your restaurant as smooth as possible – by allowing them to pay via QR code, or letting them split checks without fuss, for example. Finally, find ways to reconnect with them after they leave. That could be sending a loyalty program member an email on their birthday. Or, if a new guest provided their email address when making their reservation, follow up with a guest survey, an invitation to receive future offers, and maybe a free appetizer if they return to you within a few months. The pandemic created some strange conditions for running a restaurant business: Dining rooms became burdens that operators wanted to unload. Then, amid the high consumer demand for delivered food, ghost kitchens looked like the perfect solution, promising low overhead costs and efficient preparation. Now, it’s become clear that ghost kitchens aren’t the stand-alone powerhouses we once thought they could be – and they very much rely on the strength of their parent restaurant brand to succeed. As reported in Restaurant Business recently, the ghost kitchen provider CloudKitchens is struggling to recruit restaurants into its facilities because the market has shifted in the past couple of years and operators aren’t solely relying on delivery to generate business. In fact, they are realizing the benefits of having people in their dining rooms or at least onsite collecting their food. Is there a lesson anywhere here? Economic and environmental conditions have sent restaurants on a wild rollercoaster ride in the past few years. Just like the ingredients in your pantry, your business should have the ability to pivot in different directions based on shifting demand. That could mean harnessing technology to operate more leanly, scaling up areas of the business that can handle additional traffic and slowing down parts that can’t. It could also mean rethinking your real estate and your team so their functions can also pivot with shifting demand. How flexible is your model? Is there room to reinvent it based on different scenarios? Tipping has become a fraught topic in recent years – both with staff and guests. Restaurants are continuing to find their footing with tipping and are testing approaches that feel as fair as possible to everyone, but that’s not an easy task. In a recent column for Restaurant Business, Jonathan Deutsch advises operators to approach tipping changes in three key ways: First, be thoughtful. Review past data to anticipate how a new tipping model would affect each position in the business. Also be inclusive. Involve all employees in the conversation and make them aware of when the changes will be taking place – it will help you gain their cooperation with your final decision. Finally, be prepared to stick with your decision for a while. Making adjustments more than once a year is likely to feel jarring for your staff. A survey conducted by the National Restaurant Association earlier this year found that 79 percent of operators are having difficulty hiring. Hospitality and foodservice labor turnover, which is about twice the national average, adds to the costs and strain of finding staff. Whether you’re currently short-staffed, or if you simply want to be more prepared and flexible when members of your team are ill, cross-training your team can help you. Employees who know how to perform multiple roles can flex with the shifting demands of your business, giving you better protection against absence and changes in the overall business environment. It allows you to redirect staff to other tasks if you happen to be over- or under-staffed during a shift. It can also encourage your team to be more engaged with their jobs if you’re offering them opportunities to develop new skills and varying their day-to-day responsibilities. While additional training can demand resources, you might offer rewards to team members who provide on-the-job coaching to less experienced staff, and if you’re already relying on automated tools to deliver training materials, you can expand their use to a larger group of staff. Who knows? Your cross-training efforts may help you to more quickly identify employees’ individual skills and find ways to use them in other parts of your business. We’ve been hearing it a lot this year: To generate traffic when consumers are hesitant to spend on restaurant meals, operators have to provide value – or at least the perception of it. But that doesn’t necessarily mean offering discounts. According to Kinetic12, a consulting firm that works with emerging brands and identifies trends, there are many ways in which an operator can provide “value”: You can offer premium ingredients – guests will be more willing to pay top dollar if you’re offering high-quality food and it feels that way. You can offer a couple of portion sizes, so guests can trade up or down (this can be more palatable to guests who might otherwise notice that their usual-size dish is suddenly costing them more). Price is still part of the equation and you may well have guests who are looking for more budget-friendly options right now, so consider lunch deals, value meals and other promotions to draw traffic and allow people to mind their budgets. The service and overall experience you provide will continue to mean a lot, so prioritize your staff’s interactions with guests and ensure your website and app are easy to navigate and communicate accurately about timing. Your consistent execution is important – guests need to feel like they know what to expect in terms of their overall experience with you. Even if you’re cutting corners right now – whether it be with ingredients, serving sizes, staffing or something else – that shouldn’t come through in the overall experience you provide. If guests feel they are suddenly getting much less value for their money, they won’t return. Finding even incremental ways to elevate your brand’s value can make your guests feel like your meals are a worthwhile purchase, regardless of what you’re having to charge. Restaurant aren't one-size-fits-all, so restaurant loyalty programs shouldn't be either. Yet many restaurants operate this way. If you're offering blanket rewards for different tiers of your program, or not allowing for some choice on the part of your guests, you may be leaving sales on the table. A guide from the guest engagement company Paytronix suggests some approaches restaurants should keep in mind to offer a program that most closely reflects their brand and the preferences of their guests. It asks you to consider five factors: First, think about how to best engage your guests. Conduct a survey so you understand what motivates them to come to your restaurant -- and what would drive them back to make incremental purchases over time. Second, build in the flexibility to run promotions that suit your brand. Do you want to build continued interest around a signature menu item or other unique aspect of your brand? Third, make it easy for your staff to use the program with guests -- to promote it, answer questions about it, and provide updates to account balances. Fourth, choose only the options that allow you to earn a financial return and plan clear steps to achieve it. Finally, capture key guest information that helps you segment offers. Your longtime guest with kids may well be interested in different offers than the newer guest who comes in once a month for happy hour -- and that should come through in their offers. In addition to providing an overview of the popular programs in use and how they can be customized, the Paytronix guide also includes a worksheet that can help you evaluate program options and determine which features best suit your needs. Just a few years ago, the 7 p.m. dinner slot was the most coveted for people looking to dine out. But the pandemic shifted the dinner hour earlier to between 5 and 6 p.m., and it has largely stayed there since. That’s according to a recent Associated Press interview with OpenTable CEO Debby Soo. She supposes that with many people continuing to work from home, consumers may be looking to take a break in the early evening to get out of the house and enjoy a meal. The shift in timing may also change people’s appetites for food and drink, potentially creating more of a gray area between happy hour and dinner. What does your guest data say about people’s preferences right now? Are there more people coming in at 5 p.m.? If so, are they more apt to order bar snacks, share a pizza with friends, get shareable entrees suitable for a family, or order individual entrees? Are they in a happy-hour mood and more likely to order drinks? Could you adjust your food and beverage menus to accommodate those preferences? If you’re not seeing clear patterns in ordering behavior, you might test some limited-time offers and then track how guests respond. |
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