Saturday, April 11, 2009 at 10:34AMToday's Best Restaurant Marketing Strategies: From Discounting to Delivering Value
In recent conversations with restaurant marketing leadership, I heard mostly familiar themes when discussing their best restaurant marketing strategies. There are those smaller concepts that have found some success with a "Name your own price" promotion and other unique efforts to drive sales that have received quite a bit of media attention. But the majority of restaurant people I spoke to were sticking with more traditional strategies, with the occasional "toe in the water" when it comes to attempting less tried-and-true methods of increasing market share.
Most common among the marketing strategies some restaurant leadership shared with me is discounting or limited-time-only promotions. Jean Smoke, Director of Marketing for the 550+ unit TacoTime concept, told me her concept has a "limited time addition to their World Famous line of Crisp Burritos, a Crisp Pork Burrito at a discounted price of $1.99." They've found this offering is bringing in their current Crisp Burrito fans as well as new customers for an exciting new item. Frank Day, Chairman and President of RockBottom Restaurant and Brewery, said his concept has "built traffic and created some excitement with consumers by running a variety of promotional specials, some supported by media but mostly promoted within the four walls of his restaurants". Marc Geman, President and CEO of Spicy Pickle, a 40+ unit deli and sandwich concept, said his brand will be, "rolling out a Picklenomics menu that will offer a build your own section as well as half sandwiches with soup or salad, a drink and chips that will combine their high quality product with favorable pricing."
Along similar lines of marketing by discounting, Pops for Champagne in Chicago, is offering a Low Fare Promotion. "From 3-7pm weekdays, guests receive 37% off any food item ordered.", Tom Verhey, owner of the nation's longest running champagne bar shared with me. Dan Beem, President of Cold Stone Creamery, was pleased with the results his concept had when they brought their new ice cream cupcakes to market at an introductory price point. "The response was so great that our stores were hardly able to keep the cupcakes on the shelves and our sales spiked as a result." Paul Damico, President of the Tex-Mex concept, Moe's Southwest Grill, said the goal of their $4.99 Joey Jr. Bundle was two-fold. "First, we wanted to offer our guests a right-sized portion. Second, we wanted to give our guests a meal option under $5. This strategy was a success and we plan to continue expanding our menu in a similar fashion during these hard economic times." In response to Subway's $5 promotion, Jeff Warfield, Chairman, President, and CEO of Submarina, a California based deli concept, has rolled out a $5 value meal that includes 6 inch sub, soda and chips. "Our 6-inch sub has as much meat as a Subway 12-inch, and we use fresh-made bread.", claimed Warfield.
Fewer restaurant concepts had much to share with me in the way of marketing strategies beyond offering discount pricing and limited time promotions. One avenue some did touch on was improving their online presence. TacoTime recently revamped their website to offer more interactivity to their customer base. They have some online promotions coming soon, including a "look-alike" contest. They and Cold Stone Creamery are also looking into building their online presence through ever increasingly popular social marketing methods such as Facebook and Twitter. Josh Richman, CEO of Happi House, said, "Our most targeted strategy is the establishment of a restaurant email marketing club for our guests. Each new address collected online or at the restaurant gets a free meal for joining, a free offer on their birthday, and monthly promotional messages." Happi House is able to track message views, printed redemptions, which offers are most successful, and who their most loyal members are.
Other restaurant concepts are focusing on staying relevant to their customer base. For example, Submarina and Spicy Pickle both are marketing the healthy aspects of their menu offerings, not only the nutritional information, but the absence of enzyme/preservative/filler content in their ingredients. Pops for Champagne is appealing to the generosity of their guests with their Toast on Tuesday Promotion. Guests are encouraged to find something to celebrate and visit Pops to toast that with specially priced glasses of champagne. Pops will donate $1 from each glass to the Chicago Job Council, an organization that helps people living in poverty find career opportunities. According to Megan Winters, Marketing Manager of Port City Java of North Carolina, they are "making environmental, economic, and social differences through its Fairganic coffees." In response to the increasing receptivity to "green" efforts, Port City Java uses only organic beans cultivated in a way that has low environmental impact.
While most restaurant concepts have made some type of offline and online restaurant marketing strategy adjustment in response to the market, there are a few I spoke with who feel they are positioned in such a way that they are simply going to continue to do what they currently do. Jeffery Bank, CEO of the New York based Alicart Restaurant Group, had this to say of one of their concepts, "Carmine's has been around for over 19 years and is the original Italian family style concept. It is extremely value driven...It is a perfect brand in this economy and that is why our sales are up, not down." In this case, "if it's not broken, don't fix it" seems to be working.
While there are variations on the theme, there's no doubt that current conditions call for concepts to make sure both their traditional and restaurant internet marketing strategies are effective and sustainable until the market improves.
Read more Restaurant Industry Trends here.
Brian Bruce, author of multiple articles published on many websites and several industry trade publications, has been cited in multiple news stories as an authority in Executive Restaurant Recruiting. He's an Executive Restaurant Recruiter with Premier Solutions in Oklahoma City and Blogger. He can be reached at 877-948-4001, by email at HeadHunterBrian@gmail.com , or on his blog at HeadHunterBrian.com .
Reader Comments (4)
Interesting!
I feel like there is a scarcity of good marketing today. Good marketing means which can convert the leads into sales. The only marketing that has moved me in the last couple of years is Social Media Optimization.
Brian,
this is where Marketing needs to understand something about Operations - or at the very least both depts need to be talking with each other. There should never be a discussion among corporate leadership as to whether value is being delivered - this should be a constant. If value isn't being provided then marketing isn't listening to the guests, nor is is keeping abreast of changes in the marketplace.
Discounting. Discounting should really be a variable of food,the related resource costs and the length of the offer. With food & operating costs rising, the question really is, "How do I discount and still provide value to guests". Taking a loss for some larger restaurant companies like Darden Restaurants may be something the stomach, but smaller entities are really walking a tight-rope here.
Sorry, but Darden hasn't been playing the coupon & discount games others have been. Too bad no one else followed their lead.
Operators who engage in discounting won't survive it. Consumers don't want lower prices, they want value. Unfortunately, operators have failed to understand the recalibration of the consumer's mindset and have continued with business as usual.
It's not about the economy and it's not about price. It's about value. Operators need to wake up and start listening for a change.
Nice article, and agree that discounting NEVER works in the long term. The only missing marketing component research to understand the 800lb gorilla of the 30+% defection rate in restaurants. Usually this means poor operations or the wrong product / price. If a business does not know which, then it will fail and the only way to know this is to use on-site, real-time customer feedback and analytics to engage customers, improve knowledge and prevent defection. systems like this exist - opiniator for example www.opiniator.com