Here's a recent article from BusinessWeek.com that I hope you enjoy.
How Positive Psychology Can Boost Your Business
In tough times, entrepreneurs try the so-called science of happiness to build thriving companies
By Jill Hamburg Coplan
To understand how positive psychology—the so-called science of happiness—is being used by entrepreneurs, it helps to look at a company under siege. After all, it's one thing to talk about the connections between a positive mental state and a healthy company when a business is running well, turning a profit, and grabbing new customers. But tougher times really test entrepreneurs, separating those who hunker down and hope the worst will pass from those who use their strengths to find opportunity amid rubble.
Robert Aliota is determined to be, when necessary, one of the latter. In 2004, Aliota, the owner of Carolina Seal, an 11-employee Charlotte (N.C.) company that makes custom-engineered parts for DuPont (DD) and John Deere (DE), among others, learned that a competitor had pounced on one of his key segments. Worse, the rival had hooked ExxonMobil (XOM), a customer that had eluded Aliota.
Rather than hole up in anger or fume, Aliota followed a central tenet of positive psychology: capitalize on your fundamental character strengths, especially when things get bleak. Aliota's strengths include extroversion, optimism, and generosity. He had in the past referred business to the rival and toured its plant. Now he concentrated on cementing the relationship. Not long after, he got a call from his competitor: ExxonMobil needed a special part. Could Aliota supply it? Four years later, he and the onetime rival "are as closely allied as you can get without a legal alliance," says Aliota.
Coaches specializing in positive psychology are selling entrepreneurs a twofold promise. One is that optimism and cheerfulness have a measurable effect on the bottom line. The other is that happiness is a muscle you can strengthen. Aliota is buying all of it. "We're capable of thinking in a more positive way, but you need help to learn how," he says. That Carolina Seal has posted three years of double-digit growth, Aliota says, "is a lot due to the awareness we've gained." He hires for strengths rather than résumés, and when necessary, he redeploys staff to create a better fit.
His employees get more extensive training, and therefore, far more autonomy (Aliota took his first-ever two-week vacation this summer). Aliota begins and ends meetings with praise rather than criticism. And he has changed how he frames his mission. "We're a personal- and career-development company," he says. "It turns out the by-product is engineered rubber, metal, plastic, and foam."
POSITIVE PAYOFF
These ideas will no doubt ring a bell with anyone familiar with the work of humanistic psychologist Abraham Maslow or any of the truckloads of pseudo-scientific career-coaching books. What makes positive psychology different, its proponents say, is a decade of clinical trials, making sometimes-controversial use of brain-scanning technology, that have measured and refined what happiness can do. They've looked at how much an upbeat mood, for example, reduces the time it takes a team of doctors to make a tricky diagnosis. They've found that a social worker will make twice as many visits to clients if he or she feels appreciated.
Positive psychology, in its current form, was born at the University of Pennsylvania in 1998, when Martin E.P. Seligman, then a Penn professor and president of the American Psychological Assn., made the study of positive emotion the theme of his tenure and developed a master's program for its study. Positive psychology caught fire, with Penn remaining the locus. In 2002, the University of Michigan's business school began offering PhDs in Positive Organizational Scholarship. In 2004, Case Western Reserve University began granting MBAs in Positive Organizational Development. Since then, hundreds of happiness-and-business researchers have taken on assignments at companies as various as Toyota Motor (TM), Ann Taylor Stores (ANN), BP's (BP) Castrol Marine, and Standard Chartered Bank, as well as the Scottish city of Glasgow and the U.S. Navy. Most graduates of Penn's master's program have fanned out to academia or big corporations. But a few, mostly from business-owning families, are taking the discipline to entrepreneurs.
Their argument is simple. A decade of research suggests that happiness at work—defined as pleasure, engagement, and a sense of meaning—can improve revenue, profitability, staff retention, customer loyalty, and workplace safety. Many of the studies are preliminary. They aren't cross-cultural or long-term. But they strongly suggest that postive emotion increases creativity and problem-solving ability and aids in fighting stress.
Cheery thoughts aren't for everyone all the time. Plenty of jobs require anxiety, pessimism, and even fear, researchers say. Airline pilots facing ice shouldn't be optimistic. Nor should accountants spotting fishy numbers, or regulators probing corruption. No research, however, suggests that a dour outlook helps entrepreneurs succeed. Aliota's coach, David J. Pollay, grew up working in his family's business and now heads The Momentum Project, a consulting firm in Ocean Ridge, Fla. For most entrepreneurs, Pollay says, "negativity is just not necessary."
True enough, some say, but that doesn't necessarily mean a focus on happiness is the answer, either. Such noted psychologists as Harvard University's Jerome Kagan, who has studied temperament for 50 years, caution that the psychology and biology of happiness are little understood and vary dramatically across time, cultures, and individuals. "A suicide bomber who's really committed to the cause feels very happy the moment before he blows himself up," Kagan says.
Causality is also a problem: Does being cooperative, engaged, and generous make an entrepreneur happy, or are naturally happy people just more cooperative, engaged, and generous? Another criticism, buttressed by studies of identical twins, is that people's general baseline temperament, or set point, is between 50% and 80% inherited, making it very difficult to change.
But this much seems certain: People can take control of certain actions that will make them happier for a time, such as setting appropriate goals. They can add gratitude, hope, and a dose of self-control to each working day. And it's clear that happy bosses perform measurably better, building productive teams and inspiring loyalty.
WHAT ARE YOU GOOD AT?
Positive psychologists start by asking their clients to take a test that evaluates a person's strengths, on the premise that doing what we're best at naturally brings joy. Thirty years of Gallup surveys have found that the most successful companies are ones whose employees believe they get to do what they do best every day. (Only one-third of working people do.)
Penn's test, which measures 24 attributes, is free online at viastrengths.org. Such an analysis can help entrepreneurs figure out the most productive uses of their time, but it can also be useful in hiring. Having a spectrum of strengths on staff is crucial for small and startup businesses, says Tom Rath, the head of Gallup's workplace research and consulting arm.
Once an entrepreneur knows his or her strengths, it's time to put them to use. That's what Melanie Morlan, owner of FirstBreathe.com, a wellness and athletic training company in Spokane, Wash., needed to do. She spent a decade working with the U.S. Olympic Committee and professional cyclists, including Lance Armstrong, before taking time out to raise her son. She wanted to reenter the workforce by building a larger consulting practice than she'd once had, offering nutrition counseling, coaching in weight loss and stress reduction, and building a Web site and blog. But she couldn't get started. "I'd get scared and set up roadblocks," she says, telling herself she'd never succeed and ignoring her to-do list. She eventually called on Senia Maymin, a coach and, like Pollay, a graduate of Seligman's program. Maymin also holds an MBA from Stanford University, and she knows family business and entrepreneurship firsthand, having worked alongside her father and brother at their hedge fund and co-founding three tech startups. Maymin helped Morlan exploit her strengths, of which creativity is first. So if Morlan lost a valuable client or made a bad decision, instead of spending the afternoon moping, she would turn to designing and building her Web site. "Creativity stimulates me," she says.
OFFER PRAISE
Even if emotional qualities do not show up among your top strengths, positive psychology coaches recommend trying to build stronger bonds with and among your staff. Barbara L. Fredrickson, a psychology professor at University of North Carolina at Chapel Hill, is studying the flip side of the adrenaline-fueled fight-or-flight response. She says an equal and opposite phenomenon occurred when our ancestors were content: Their brains flooded with with a stay-and-create chemical, possibly dopamine. Her theory is that while the anger-and-fear response kept us from being eaten alive, civilization's creations came about thanks to "happy" chemicals and what she calls the "broaden-and-build" state of mind they trigger. At work, that same reaction should make staffers more resilient in crises and more likely to be receptive to new ideas, while deepening collegial relationships and mutual respect. Despite the heavy theory involved, building stronger ties with those you work with can be as simple as offering abundant praise and recognition when appropriate; giving staff tailor-made rewards for performance; and letting them be themselves—maybe in the way they mark special occassions, maybe in the way they decorate their workspace.
Next in the consultants' toolkit is fostering appreciation. Studies suggest businesses succeed when their cultures are imbued with a sense of purpose—for owner and staff. Much work in that area has come from David L. Cooperrider, who heads the Center for Business as an Agent of World Benefit at Case Western Reserve University's Weatherhead School of Management. His workshop method, called Appreciative Inquiry, asks participants to reflect on, write about, and share aloud why their job and company matter. "There's a huge fusion of strengths, and every voice becomes part of designing the future of the company's business," says Cooperrider.
TRACKING RESULTS
If all this sounds too fuzzy for you, well, just speak with Juan Humberto Young, the founder of seven-person consulting firm Positive Decision Analysis, in Zürich. A positive psychology consultant and another Penn graduate, Young hears one criticism most: Positive psychology is too soft for numbers-obsessed business owners.
With a background running an asset restructuring unit at UBS, Young recognizes the importance of statistics. So every one of his clients measures his or her progress against customized metrics. An eight-store retail chain tracked its revenues—up 10% after three months. A bank watched its deposits rise 20%. And a hospital, long plagued by interpersonal conflicts, slow response times, and a backlog in the emergency room, saw the number of operations completed rise 8%. Young ties some of his firm's compensation to these results.
Even so, says Young, who teaches at Switzerland's prestigious University of St. Gallen, many still balk. When he worked at UBS, he recalls, even the craziest trading idea would get a serious hearing. But the idea that "to create appreciation will make you more efficient and profitable—that's very difficult for [clients] to hear."
INTO THE ZONE
The last piece of the puzzle relates to exercising power over the self. The father of this field, called "self-regulation," is Stanford's Albert Bandura, a pioneer on overcoming phobias and in designing disease prevention campaigns. Few would argue with the notion that change is difficult, but research suggests that if you can master self-discipline in something as seemingly inconsequential as your posture, it will seep into your work life.
Coach Maymin delves into this with her clients, many of whom seek her out when they are between ventures. She says that to be able to get routinely into the mental state that Mihály Csíkszentmihályi (pronounced "cheeks sent me high"), another founder of positive psychology, calls "flow"—complete absorption in a task—entrepreneurs must craft a workload that's challenging but not too tough. Its demands should fully use an entrepreneur's abilities, the same way endurance athletes train just at their physical limit. "In the athletic domain, everyone can see it," she says. Psychologically, too, "self-regulation is a muscle you can train over time." She assigns her clients a small, daily exercise challenge each week, based on research that says if you accustom your body to pushing just past its comfort zone toward ever-retreating goals, "you can do the exact same thing in your company"—push past your comfort zone and achieve goals once thought to be out of reach.
Including, perhaps, smoothing out a messy merger. CargoWise EDI was, until 2006, a 50-person software company in Mount Prospect, Ill., serving the freight-forwarding industry. Founder and then-President Cris Arens called for a psychology coach after a combination with an Australian counterpart quadrupled its size, bruised egos, turned longtime policies and procedures upside down, and dashed morale. During Christmas 2006, Pollay ran a daylong seminar to get CargoWise's top U.S. employees to appreciate their individual strengths and find common purpose. They recalled when they were at their best. They thought about the company's wider purpose: creating jobs that support hundreds of families; cooperating while doing something they enjoy; producing useful products that facilitate commerce. None of it was groundbreaking, but employees didn't usually articulate these things. They talked about negative forces that were beyond their control and vowed not to be derailed by them.
"We're from the freight industry, so there was a lot of cynicism," says Arens, who calls himself "a blue-collar, down-to-earth person." But he also says the boost to morale was palpable. He brought Pollay back the next year to train the rest of the North American team. Now he's using the same techniques at HarneTech, his new green-building certification company.
Aliota at Carolina Seal says happiness science has led him to make lasting changes. For one, he regularly recalls and dissects his moments of entrepreneurial triumph, "times when I was truly in the zone, utilizing my natural strengths and having fun" as a sort of happiness fuel. One such moment came during a visit by respresentatives of a maker of giant water purification systems. Escorting the visitors on a tour of his newly renovated industrial facility, he introduced the whole staff by name. He shared the story of building the business up from two plastic shelves in his garage. He queried his prospects about their needs. During lunch, they connected over family and community matters. When Aliota and his prospects shook hands in the parking lot, the guests said they were ready to sign a deal—during a break, they'd canceled visits to two of Aliota's competitors.
To read the original article, click here.
Sunday, March 29, 2009
Saturday, March 28, 2009
The Importance of Making A Personal Connection
Check out this recent article from the Wall Street Journal which explains the impact personal connections have on spenging decisions. As people are forced to cut back on expenses, they are far more likely to continue spending money at the businesses or with people with whom they feel connected to. Independent Restaurant Owners should make it a point to personally greet all of their customers. It puts a real human face on your business, making it more than just an other anonymous place where they go out to eat. You're what makes your restaurant special and different, don't be afraid to captalize on this.
The Guilted Age: Spending to Keep Others Afloat By Stephanie Simon
Melanie Ulle and her husband are scrimping these days, and she feels guilty about the exotic foods -- the hummus, the naan, the chai -- that she stocks in her already-full kitchen each week.
Truth is, though, she'd feel worse if she stopped buying them.
Ms. Ulle likes the couple who runs the small ethnic market by her Denver home; she likes their kids, who play by the register after school. She sees how empty their shop is now. She's heard they've both taken second jobs. So, despite her own pinched budget, Ms. Ulle feels compelled to help them out. Each week, she faithfully runs up a bill close to $50.
"It's the guilt economy," Ms. Ulle says.
And it's helping keep families afloat.
Ms. Ulle's spending is borne of the empathy that comes with knowing when you trim your budget, you're hurting others who may be much closer to the brink.
The burgeoning field of behavioral economics argues that people don't always weigh costs and benefits rationally, and don't always act in their financial self-interest. These hard times have revealed a new wrinkle to that illogic: Our budgets reflect more than our personal needs. Those families whose finances permit it sometimes spend with the needs of others in mind.
Donations to many charitable institutions are down, but that may not be the correct measure of the nation's philanthropic impulses. Writing a check to an institution is impersonal, abstract and easy to quit. Far more difficult is canceling the kids' weekly music lessons when you know the piano teacher's husband just lost his job. Or firing the house cleaner who greets you every week with a new photo of her baby.
There's more than a touch of self-interest mixed in with the altruism, of course. Those who can afford luxuries like private piano lessons and weekly house cleaning aren't keen on forfeiting such luxuries -- something families freely acknowledge. But they also say their decisions are shaped in part by the pain that cutbacks may cause others.
"What we buy or stop buying, when we buy, for whom, and how much we spend are never simply decisions to maximize our own interests," said Viviana Zelizer, a Princeton professor who studies the intersection of sociology and economics. "The monies we spend signal which relationships matter to us."
That may be why Jessica Gottlieb had no trouble canceling the monthly pool cleaning at her home in Studio City, Calif., after her online retail business tanked, costing the family thousands of dollars a year in income. "There were different guys coming out all the time. I didn't know them," she said.
But she's anguished about the gardener, who has been mowing her tiny patch of lawn for a decade. "He's watched my kids grow up from babies," Ms. Gottlieb explained. "He's a part of our world."
At $60 a month, she knows the gardener is a ridiculous frill; she could buy a push mower and take care of the lawn herself quite easily. But Ms. Gottlieb, a self-described softy, has decided that he stays. "I'm a big marshmallow," she said.
Financial coach Heather Tuininga, who is based in Seattle, counsels her clients to strip away such emotional entanglements when they're budgeting.
She recalls one client who bought breakfast in a local Starbucks three times a week because she liked the barista. Ms. Tuininga laid out the facts: The barista was friendly and no doubt welcomed the tips, but her client didn't owe the woman anything.
"Relationships based on financial transactions are not true friendships," she recalls saying.
Ms. Tuininga told the client she'd be better off using the $80 a month in Starbucks expenses to pay down her credit-card debt -- or to donate to a charity that could help more people in far greater need than one barista.
That's true, says J.D. Trout, a philosophy professor at Loyola University. But he sees empathy -- and the irrational acts of spending that spring from it -- as a trait to be cherished. People keep the gardener or tip the barista extra, even when they can't afford it, because they sense their common vulnerability in tough times, said Mr. Trout, author of the new book "The Empathy Gap."
"There may be better ways to spend that money," he said. "But we'd worry about someone who didn't have those feelings."
Workers in the service industry recognize the value of that one-on-one connection, and often work hard to build it. As the recession has deepened, for instance, Christopher McGraw has made a point of taking more time to greet customers at McKinners, the gourmet pizza restaurant he co-owns in Littleton, Colo. He nurtures a sense of relationship with his regulars by showing them a cellphone snapshot of his 19-month-old, Teddy, giggling in the tub. And he greets returning customers by name, asking them personal questions about their jobs or pets.
Mr. McGraw believes building those connections is a key factor in keeping his restaurant afloat. "I hear it all the time: 'We're back because we wanted to come see you.' "
James Jafari, a massage therapist in Indianapolis, makes a point of showing clients pictures of his nine-year-old daughter or talking about his latest family vacation -- anything that "will let them see me as a three-dimensional human being," he said. In this economy, he adds, "it's the personal relationships that are keeping me going."
That rings true to Mr. Jafari's client, Phillip Cox, who continues to pay for massages a couple times a month, even though he recently lost his job in investment management. Mr. Cox has cut back on other luxuries, like taking his family out to dinner. Logically, he knows that decision will ripple across the economy, hurting the busboys and waitresses at his family's favorite restaurants. But he doesn't know those people, so he finds it an easy cut to make.
By contrast, he can't bring himself to let go the woman who cleans his house twice a month, when he knows her car recently broke down. Nor can he cancel his massage therapy, when he knows Mr. Jafari's business already has dropped by 20%.
"I don't want my difficult situation to impact the people I support," Mr. Cox said.
He's quick to point out that he has a more selfish motive, as well: He wants to maintain his comfortable lifestyle as long as he can, in the hope that things will get better soon.
That expectation of recovery is part of what keeps Ms. Ulle shopping at the ethnic grocery, too. She loves trying out exotic foods, and she wants the store to be there for her down the road, when she no longer has to watch her budget.
In that way, her weekly guilt-economy grocery bill may be a sort of investment in the future. As she said, "it's not wholly philanthropic."
For the original article, click here.
The Guilted Age: Spending to Keep Others Afloat By Stephanie Simon
Melanie Ulle and her husband are scrimping these days, and she feels guilty about the exotic foods -- the hummus, the naan, the chai -- that she stocks in her already-full kitchen each week.
Truth is, though, she'd feel worse if she stopped buying them.
Ms. Ulle likes the couple who runs the small ethnic market by her Denver home; she likes their kids, who play by the register after school. She sees how empty their shop is now. She's heard they've both taken second jobs. So, despite her own pinched budget, Ms. Ulle feels compelled to help them out. Each week, she faithfully runs up a bill close to $50.
"It's the guilt economy," Ms. Ulle says.
And it's helping keep families afloat.
Ms. Ulle's spending is borne of the empathy that comes with knowing when you trim your budget, you're hurting others who may be much closer to the brink.
The burgeoning field of behavioral economics argues that people don't always weigh costs and benefits rationally, and don't always act in their financial self-interest. These hard times have revealed a new wrinkle to that illogic: Our budgets reflect more than our personal needs. Those families whose finances permit it sometimes spend with the needs of others in mind.
Donations to many charitable institutions are down, but that may not be the correct measure of the nation's philanthropic impulses. Writing a check to an institution is impersonal, abstract and easy to quit. Far more difficult is canceling the kids' weekly music lessons when you know the piano teacher's husband just lost his job. Or firing the house cleaner who greets you every week with a new photo of her baby.
There's more than a touch of self-interest mixed in with the altruism, of course. Those who can afford luxuries like private piano lessons and weekly house cleaning aren't keen on forfeiting such luxuries -- something families freely acknowledge. But they also say their decisions are shaped in part by the pain that cutbacks may cause others.
"What we buy or stop buying, when we buy, for whom, and how much we spend are never simply decisions to maximize our own interests," said Viviana Zelizer, a Princeton professor who studies the intersection of sociology and economics. "The monies we spend signal which relationships matter to us."
That may be why Jessica Gottlieb had no trouble canceling the monthly pool cleaning at her home in Studio City, Calif., after her online retail business tanked, costing the family thousands of dollars a year in income. "There were different guys coming out all the time. I didn't know them," she said.
But she's anguished about the gardener, who has been mowing her tiny patch of lawn for a decade. "He's watched my kids grow up from babies," Ms. Gottlieb explained. "He's a part of our world."
At $60 a month, she knows the gardener is a ridiculous frill; she could buy a push mower and take care of the lawn herself quite easily. But Ms. Gottlieb, a self-described softy, has decided that he stays. "I'm a big marshmallow," she said.
Financial coach Heather Tuininga, who is based in Seattle, counsels her clients to strip away such emotional entanglements when they're budgeting.
She recalls one client who bought breakfast in a local Starbucks three times a week because she liked the barista. Ms. Tuininga laid out the facts: The barista was friendly and no doubt welcomed the tips, but her client didn't owe the woman anything.
"Relationships based on financial transactions are not true friendships," she recalls saying.
Ms. Tuininga told the client she'd be better off using the $80 a month in Starbucks expenses to pay down her credit-card debt -- or to donate to a charity that could help more people in far greater need than one barista.
That's true, says J.D. Trout, a philosophy professor at Loyola University. But he sees empathy -- and the irrational acts of spending that spring from it -- as a trait to be cherished. People keep the gardener or tip the barista extra, even when they can't afford it, because they sense their common vulnerability in tough times, said Mr. Trout, author of the new book "The Empathy Gap."
"There may be better ways to spend that money," he said. "But we'd worry about someone who didn't have those feelings."
Workers in the service industry recognize the value of that one-on-one connection, and often work hard to build it. As the recession has deepened, for instance, Christopher McGraw has made a point of taking more time to greet customers at McKinners, the gourmet pizza restaurant he co-owns in Littleton, Colo. He nurtures a sense of relationship with his regulars by showing them a cellphone snapshot of his 19-month-old, Teddy, giggling in the tub. And he greets returning customers by name, asking them personal questions about their jobs or pets.
Mr. McGraw believes building those connections is a key factor in keeping his restaurant afloat. "I hear it all the time: 'We're back because we wanted to come see you.' "
James Jafari, a massage therapist in Indianapolis, makes a point of showing clients pictures of his nine-year-old daughter or talking about his latest family vacation -- anything that "will let them see me as a three-dimensional human being," he said. In this economy, he adds, "it's the personal relationships that are keeping me going."
That rings true to Mr. Jafari's client, Phillip Cox, who continues to pay for massages a couple times a month, even though he recently lost his job in investment management. Mr. Cox has cut back on other luxuries, like taking his family out to dinner. Logically, he knows that decision will ripple across the economy, hurting the busboys and waitresses at his family's favorite restaurants. But he doesn't know those people, so he finds it an easy cut to make.
By contrast, he can't bring himself to let go the woman who cleans his house twice a month, when he knows her car recently broke down. Nor can he cancel his massage therapy, when he knows Mr. Jafari's business already has dropped by 20%.
"I don't want my difficult situation to impact the people I support," Mr. Cox said.
He's quick to point out that he has a more selfish motive, as well: He wants to maintain his comfortable lifestyle as long as he can, in the hope that things will get better soon.
That expectation of recovery is part of what keeps Ms. Ulle shopping at the ethnic grocery, too. She loves trying out exotic foods, and she wants the store to be there for her down the road, when she no longer has to watch her budget.
In that way, her weekly guilt-economy grocery bill may be a sort of investment in the future. As she said, "it's not wholly philanthropic."
For the original article, click here.
Friday, March 27, 2009
A Website with Online Ordering = Real $$$
When you start taking online orders from your website, in a few short days you will find yourself saying "Why did I wait so long?" When your customers order from your website you'll soon realize that: your staff makes less mistakes, your customers spend more money, and your customers have a better experience.
Statistics show that customers who order online spend anywhere from 8%-12% higher than those who order by phone. It makes total sense. On the phone a customer is under a time constraint and can often feel rushed by an order taker. Online they can take their time, see your whole menu and often add more items to their order. I run across restaurateurs who tell me that they can't afford the cost of processing an online order. If the average order is 8% higher and the cost is 3% to process, you are up 5% ... and this is just the obvious benefit... think of the (added) hidden value:
1. When customer-A was issuing that bigger order, your employee was not taking that order but making one for customer-B.
2. No Mistakes! The order comes out in black and white. No mistakes in quantity, items, delivery address AND if you choose to process credit cards online, it is often already paid!
3. And what about that customer who hung-up and decided to order from your competition because your phone lines were busy! No such thing in online ordering.
4. Also, think of that night owl who wants to order for his team's party tomorrow, but there is no one in your restaurant to take an advance order!
5. And how many can - in all honesty - say that they do not order the same thing over and over again. Online platform allows the customer to quickly reorder from old orders...
Bottom line: I think that restaurant operators who look at the 3% cost completely miss the boat! I'd venture to say that their argument to save 3% is awfully short sighted. Your restaurant makes more money when your customers order online. After a few weeks of taking online orders, successful operators realize the best way for a customer to place an order is online and they start to look for tools to make this happen.
There are many ways to get your customers to order online. Here are some simple must dos!
1. On your menu you must print in LARGE letters, ORDER ONLINE at yourrestaurant.com
2. Train your staff to let customers know that they can order online (T-Shirts with your restaurant's website address on them, maybe?)
3. Create in house displays that tell your customers that they can order online
4. If you have a phone recording, tell them on the message. Especially on the closed message. This way they can place an order even when the restaurant in closed.
5. Create a reason for them to order online. Many online ordering systems lets you create a loyalty program and a first time discount.
More sophisticated techniques include:
1. In print or radio campaigns include an online coupon code that gives customers a discount when they order online.
2. Create a google adwords campaign to enhance the traffic to your website. The more visitors to your website, the more online orders you will get. This is also a great way to get new customers. 3. Develop a marketing campaign with the email's you acquire with each online order(If the ordering platform you use doesn't give you complete ownership of your customer emails you have the wrong ordering platform). Keep yourself in forefront of your customer's mind with subtle, yet systematic email campaigns to your database of online customers. Remember, you are just a click away when the customer thinks of ordering online!
If you continue to have a quality product and excellent customer service your online channel will grow naturally. It is the way of the world. By implementing some of the techniques from above you can increase your online traffic exponentially. Given the choice of ordering online or via phone, most customers find ordering online easier.
Plus, this is another tool that helps independent restaurant owners level the playing field in their battle against large chains and franchises (most of whom are already profitting from this technology).
Statistics show that customers who order online spend anywhere from 8%-12% higher than those who order by phone. It makes total sense. On the phone a customer is under a time constraint and can often feel rushed by an order taker. Online they can take their time, see your whole menu and often add more items to their order. I run across restaurateurs who tell me that they can't afford the cost of processing an online order. If the average order is 8% higher and the cost is 3% to process, you are up 5% ... and this is just the obvious benefit... think of the (added) hidden value:
1. When customer-A was issuing that bigger order, your employee was not taking that order but making one for customer-B.
2. No Mistakes! The order comes out in black and white. No mistakes in quantity, items, delivery address AND if you choose to process credit cards online, it is often already paid!
3. And what about that customer who hung-up and decided to order from your competition because your phone lines were busy! No such thing in online ordering.
4. Also, think of that night owl who wants to order for his team's party tomorrow, but there is no one in your restaurant to take an advance order!
5. And how many can - in all honesty - say that they do not order the same thing over and over again. Online platform allows the customer to quickly reorder from old orders...
Bottom line: I think that restaurant operators who look at the 3% cost completely miss the boat! I'd venture to say that their argument to save 3% is awfully short sighted. Your restaurant makes more money when your customers order online. After a few weeks of taking online orders, successful operators realize the best way for a customer to place an order is online and they start to look for tools to make this happen.
There are many ways to get your customers to order online. Here are some simple must dos!
1. On your menu you must print in LARGE letters, ORDER ONLINE at yourrestaurant.com
2. Train your staff to let customers know that they can order online (T-Shirts with your restaurant's website address on them, maybe?)
3. Create in house displays that tell your customers that they can order online
4. If you have a phone recording, tell them on the message. Especially on the closed message. This way they can place an order even when the restaurant in closed.
5. Create a reason for them to order online. Many online ordering systems lets you create a loyalty program and a first time discount.
More sophisticated techniques include:
1. In print or radio campaigns include an online coupon code that gives customers a discount when they order online.
2. Create a google adwords campaign to enhance the traffic to your website. The more visitors to your website, the more online orders you will get. This is also a great way to get new customers. 3. Develop a marketing campaign with the email's you acquire with each online order(If the ordering platform you use doesn't give you complete ownership of your customer emails you have the wrong ordering platform). Keep yourself in forefront of your customer's mind with subtle, yet systematic email campaigns to your database of online customers. Remember, you are just a click away when the customer thinks of ordering online!
If you continue to have a quality product and excellent customer service your online channel will grow naturally. It is the way of the world. By implementing some of the techniques from above you can increase your online traffic exponentially. Given the choice of ordering online or via phone, most customers find ordering online easier.
Plus, this is another tool that helps independent restaurant owners level the playing field in their battle against large chains and franchises (most of whom are already profitting from this technology).
Thursday, March 26, 2009
Tips to Increase Your Business Thru Email
Here's some helpful information from Michelle Keegan, who is one of Constant Contact's email marketing experts, that illustrates how every independent restaurant owner can increase their business by using email to build a lasting relationship with customers...
"My advice to businesses is to think about how many times during the year/quarter/month a customer needs you, or your products or services, and let that be your guide to determining how often to reach out and touch your audience. Think of this number as a minimum, then build from there.
Your business could be a marketing consulting firm, a software company, a nonprofit, an educational institution, a car dealership, a florist, a restaurant, a vineyard, a rock and roll band - you name it! Success and profitability is all about creating loyal customers (e.g. clients, users, donors, buyers, diners, drinkers and fans) and driving interest, repeat business and referrals.
Since it is roughly six to twelve times less expensive to sell to an existing customer than it is to acquire a new one, the value of customer loyalty and repeat business is just too compelling to ignore.
According to Bain and Company:
A 5% increase in retention yields profit increases of 25 to 100 percent.
Repeat customers spend, on average, 67 percent more than new customers.
It's All About Communication
Communication is a critical part of any relationship. Take a lesson from small businesses that long ago grasped the dynamics and importance of building customer relationships through communication. They nurture their customers over time by learning and remembering individual preferences and interests. They acquire this customer information directly from customers through personal interaction. And they keep in touch with customers on a regular basis ensuring their organization remains "top of mind."
Statistics show that it takes six to seven contacts before you can turn a prospect into a customer. All that contact can be expensive and time consuming. That's where email marketing becomes a critical part of any organization's marketing efforts.
Email Turns Prospects and Visitors into Loyal Customers
Email marketing enables you to proactively communicate with your existing customers instead of passively waiting for them to return to your Web site, visit your store or office, call you on the phone etc. With email marketing you can solidify existing relationships, initiate new ones and convert your one-time visitors, buyers and members into repeat business and long-term customers or contributors.
No matter how your visitors, prospects and customers found you; perhaps you paid for search engine placement, sponsored a newsletter, rented an opt-in list, placed a banner ad, distributed a flyer or sent a postcard; email marketing adds to your bottom line because it allows you to maximize your investment in those expensive and time consuming marketing efforts and improve the return on investment (ROI) of every dollar you spend to obtain new business and develop profitable customer relationships.
According to DoubleClick, good email marketing wins over consumers:
Well-executed permission email marketing campaigns can have a positive impact on consumers' attitudes towards companies. 67% of US consumers said they liked companies that, in their opinion, did agood job with permission email marketing. 58% of consumers said they opened those companies' emails, while 53% said that such emails affected their personal buying decisions.
Why is Email Marketing the Answer?
Email marketing is one of the most powerful marketing tools available today. It is easy, affordable, direct, actionable and highly effective. When you add email to your marketing mix, you spend less time, money and resources than with traditional marketing vehicles (e.g. direct mail or print advertising) And, with email marketing, you can communicate more quickly which means your time-sensitive information is disseminated in minutes, not days or weeks - and you can see the results of your efforts instantly.
Email marketing is at it's most effective when used in communications to your existing customer list or "house list" as a means of customer retention.
Communicate More Information, More Often
Email marketing is an affordable way to stretch a tight marketing budget. It can cost as little as fractions of a penny per email! With a response rate five times greater than direct mail and 25 times the response rate of banner ads, email marketing is the most effective way to increase sales, drive traffic and develop loyalty.
Unlike direct mail, there is virtually no production, materials or postage expense. So, with email marketing, you can easily and affordably create more communications that are valued by your customer, and you can make those communications support and enhance your brand in a way that substantially differentiates your company from the competition.
Your communications can include newsletters, preferred customer promotions, new service announcements, event invitations, greetings and much, much more.
Easily Measure and Improve Your Results
The benefits derived from most types of marketing and advertising are very difficult to measure. With email marketing, however, you can easily measure the number of emails sent, emails opened, bounce backs, unsubscribes and click-through rates.
You can also tell who opened your email, which links in your email motivated the most clicks and, even more specifically, who clicked on each link. All of this useful information can help you send highly targeted campaigns to the individuals most likely to respond to your offer, thus improving your results going forward."
For a free 60-day trial of Constant Contact's email marketing service, click here.
To read the rest of Michelle Keegan's article, click here.
"My advice to businesses is to think about how many times during the year/quarter/month a customer needs you, or your products or services, and let that be your guide to determining how often to reach out and touch your audience. Think of this number as a minimum, then build from there.
Your business could be a marketing consulting firm, a software company, a nonprofit, an educational institution, a car dealership, a florist, a restaurant, a vineyard, a rock and roll band - you name it! Success and profitability is all about creating loyal customers (e.g. clients, users, donors, buyers, diners, drinkers and fans) and driving interest, repeat business and referrals.
Since it is roughly six to twelve times less expensive to sell to an existing customer than it is to acquire a new one, the value of customer loyalty and repeat business is just too compelling to ignore.
According to Bain and Company:
A 5% increase in retention yields profit increases of 25 to 100 percent.
Repeat customers spend, on average, 67 percent more than new customers.
It's All About Communication
Communication is a critical part of any relationship. Take a lesson from small businesses that long ago grasped the dynamics and importance of building customer relationships through communication. They nurture their customers over time by learning and remembering individual preferences and interests. They acquire this customer information directly from customers through personal interaction. And they keep in touch with customers on a regular basis ensuring their organization remains "top of mind."
Statistics show that it takes six to seven contacts before you can turn a prospect into a customer. All that contact can be expensive and time consuming. That's where email marketing becomes a critical part of any organization's marketing efforts.
Email Turns Prospects and Visitors into Loyal Customers
Email marketing enables you to proactively communicate with your existing customers instead of passively waiting for them to return to your Web site, visit your store or office, call you on the phone etc. With email marketing you can solidify existing relationships, initiate new ones and convert your one-time visitors, buyers and members into repeat business and long-term customers or contributors.
No matter how your visitors, prospects and customers found you; perhaps you paid for search engine placement, sponsored a newsletter, rented an opt-in list, placed a banner ad, distributed a flyer or sent a postcard; email marketing adds to your bottom line because it allows you to maximize your investment in those expensive and time consuming marketing efforts and improve the return on investment (ROI) of every dollar you spend to obtain new business and develop profitable customer relationships.
According to DoubleClick, good email marketing wins over consumers:
Well-executed permission email marketing campaigns can have a positive impact on consumers' attitudes towards companies. 67% of US consumers said they liked companies that, in their opinion, did agood job with permission email marketing. 58% of consumers said they opened those companies' emails, while 53% said that such emails affected their personal buying decisions.
Why is Email Marketing the Answer?
Email marketing is one of the most powerful marketing tools available today. It is easy, affordable, direct, actionable and highly effective. When you add email to your marketing mix, you spend less time, money and resources than with traditional marketing vehicles (e.g. direct mail or print advertising) And, with email marketing, you can communicate more quickly which means your time-sensitive information is disseminated in minutes, not days or weeks - and you can see the results of your efforts instantly.
Email marketing is at it's most effective when used in communications to your existing customer list or "house list" as a means of customer retention.
Communicate More Information, More Often
Email marketing is an affordable way to stretch a tight marketing budget. It can cost as little as fractions of a penny per email! With a response rate five times greater than direct mail and 25 times the response rate of banner ads, email marketing is the most effective way to increase sales, drive traffic and develop loyalty.
Unlike direct mail, there is virtually no production, materials or postage expense. So, with email marketing, you can easily and affordably create more communications that are valued by your customer, and you can make those communications support and enhance your brand in a way that substantially differentiates your company from the competition.
Your communications can include newsletters, preferred customer promotions, new service announcements, event invitations, greetings and much, much more.
Easily Measure and Improve Your Results
The benefits derived from most types of marketing and advertising are very difficult to measure. With email marketing, however, you can easily measure the number of emails sent, emails opened, bounce backs, unsubscribes and click-through rates.
You can also tell who opened your email, which links in your email motivated the most clicks and, even more specifically, who clicked on each link. All of this useful information can help you send highly targeted campaigns to the individuals most likely to respond to your offer, thus improving your results going forward."
For a free 60-day trial of Constant Contact's email marketing service, click here.
To read the rest of Michelle Keegan's article, click here.
Monday, March 16, 2009
Simple Steps to Make Your Website A Better Marketing Tool
Here are some tips from Rohit Bhargava, who designed the website www.dc-restaurants.com more then 10 years ago and which still happens to be ranked number one on Google for “dc restaurants” despite the fact that it hasn’t ever been updated.
1. Give them the details first. Most people are visiting your site to see the location, get your phone number, or see your opening hours. Are these on your homepage? Can you get to them from every page? Put those front and center, and customers will be more likely to call or visit.
2. Get listed in local online restaurant directories. There are lots of them in every metropolitan area, and usually it is pretty easy to get listed. They need restaurants in their database. It just takes an afternoon searching Google as if you were a customer, finding the sites that you're not listed on, and submitting your site.
3. Show what your best customers say about you. Chances are, you have your regulars. What do they love about your restaurant? Work to find people who say you're good, and then publicize their opinions on your site. Oh, and don't forget to get your mileage out of any positive reviews from critics online too.
4. Pay for professional photography. Your cousin might have a great new digital SLR, but you can tell the difference between professional and amateur images. A good photographer can make something average look mouth watering, and something good look divine. It's the best investment you'll ever make.
5. Help your customers pass it on. Put the URL on your menus. Include a Send this link to a friend. Let customers send an e-vite to others in their party with details on a reservation. Try anything to get people to tell more people online. A single voice can amplify many times further in the online environment.
6. Make it printable. Everyone wants to print menus, directions, phone numbers, etc. You can't print from a flash presentation. Sometimes PDFs are a turnoff because they are too much work. Just make it easy for customers to print pages, and you'll reduce the chances that they get to your site and leave.
7. Understand your stats. Chances are, you know what's working and what isn't in your business. How else can you improve? Your stats can tell you where people are finding your site, what they are searching for when they get there, and what they are never seeing. Analyze the information to find out what people want, and change your site to give it to them.
To read his original blog post, go to http://rohitbhargava.typepad.com/weblog/2006/02/making_a_succes.html
1. Give them the details first. Most people are visiting your site to see the location, get your phone number, or see your opening hours. Are these on your homepage? Can you get to them from every page? Put those front and center, and customers will be more likely to call or visit.
2. Get listed in local online restaurant directories. There are lots of them in every metropolitan area, and usually it is pretty easy to get listed. They need restaurants in their database. It just takes an afternoon searching Google as if you were a customer, finding the sites that you're not listed on, and submitting your site.
3. Show what your best customers say about you. Chances are, you have your regulars. What do they love about your restaurant? Work to find people who say you're good, and then publicize their opinions on your site. Oh, and don't forget to get your mileage out of any positive reviews from critics online too.
4. Pay for professional photography. Your cousin might have a great new digital SLR, but you can tell the difference between professional and amateur images. A good photographer can make something average look mouth watering, and something good look divine. It's the best investment you'll ever make.
5. Help your customers pass it on. Put the URL on your menus. Include a Send this link to a friend. Let customers send an e-vite to others in their party with details on a reservation. Try anything to get people to tell more people online. A single voice can amplify many times further in the online environment.
6. Make it printable. Everyone wants to print menus, directions, phone numbers, etc. You can't print from a flash presentation. Sometimes PDFs are a turnoff because they are too much work. Just make it easy for customers to print pages, and you'll reduce the chances that they get to your site and leave.
7. Understand your stats. Chances are, you know what's working and what isn't in your business. How else can you improve? Your stats can tell you where people are finding your site, what they are searching for when they get there, and what they are never seeing. Analyze the information to find out what people want, and change your site to give it to them.
To read his original blog post, go to http://rohitbhargava.typepad.com/weblog/2006/02/making_a_succes.html
Why You Have to Keep Marketing In A Recession
Here's great article posted by Jan Norman, a small business consultant, that outlines exactly why it's so crucial for you to keep marketing during a recession. Keep this information in mind if you have to reduce some of your business expenses, so that you don't end up reducing your revenue at the same time.
In the face of a recessionary economy, marketing budgets tend to suffer. Small businesses typically allocate marketing dollars according to available revenue, which naturally slacks during periods of economic decline, says Ray Benedicktus, assistant professor of marketing at California State University, Fullerton.
However, marketing activities are the primary determinant of that revenue, so a substantive reduction in marketing logically inhibits the business’ ability to generate sales at one of the most crucial point in its existence, he says.
To weather this storm, top companies will maintain spending or at least find ways to make smaller marketing budgets just as effective, says Benedicktus, who is a former SBA consultant who has advised more than 100 small companies. Overall, small businesses can do a few things to hedge against consumers’ recessionary behavior.
Know thy customer: It is essential that firms discover how their customers are identifying value, searching for purchase alternatives, and/or changing their spending habits.
With fewer dollars in their pockets and more informative search technologies at their disposal, customers are searching for the best value. Research gives us the knowledge to make good decisions, so let’s find out what’s important to our customers now and deliver it, he says.
Research is not cheap, but the good news for Orange County businesses is that there are a couple of great business schools nearby where faculty, business development center staff, MBA students, and student business organizations are itching for interesting projects.
Maintain and communicate high standards: There are many routes to creating and communicating value to customers, but only one route has anything to do with low prices.
Certainly we are more price conscious, even in business purchasing, but none of us goes out searching for a lemon, Benedicktus says. We can also reduce psychological costs, such as uncertainty, by generating business through referrals, monitoring and communicating customer satisfaction levels, and increasing product trial and demonstration opportunities.
Alternatively, a focus on customer benefits like product quality and delivering excellent customer experiences also increases value, he adds. Customers don’t necessarily want to spend less money, but overall, people just want more for the money they do spend.
People make the difference: Marketing is a group of activities that consists of products, promotions, pricing and place (distribution) strategies. However, no marketing mix strategy is any good without great people, he says.
Now is the time that businesses should be most concerned with improving their sales teams, hiring customer oriented employees (especially on the front-line), cross-training, and engaging existing employees regarding factors that might be contributing to low morale or less than optimal performance.
Maintain marketing: As your competitors cut their marketing budgets and market presence, increase your advertising to gain market share, he says.
Advertising becomes less expensive when fewer businesses are purchasing spots, so deals are out there if you are willing to negotiate with communications providers.
The key is to maintain or increase frequency of ads, and for goodness sake, differentiate yourself by not saying things like “in these difficult times.”
To read the original article, click here.
However, marketing activities are the primary determinant of that revenue, so a substantive reduction in marketing logically inhibits the business’ ability to generate sales at one of the most crucial point in its existence, he says.
To weather this storm, top companies will maintain spending or at least find ways to make smaller marketing budgets just as effective, says Benedicktus, who is a former SBA consultant who has advised more than 100 small companies. Overall, small businesses can do a few things to hedge against consumers’ recessionary behavior.
Know thy customer: It is essential that firms discover how their customers are identifying value, searching for purchase alternatives, and/or changing their spending habits.
With fewer dollars in their pockets and more informative search technologies at their disposal, customers are searching for the best value. Research gives us the knowledge to make good decisions, so let’s find out what’s important to our customers now and deliver it, he says.
Research is not cheap, but the good news for Orange County businesses is that there are a couple of great business schools nearby where faculty, business development center staff, MBA students, and student business organizations are itching for interesting projects.
Maintain and communicate high standards: There are many routes to creating and communicating value to customers, but only one route has anything to do with low prices.
Certainly we are more price conscious, even in business purchasing, but none of us goes out searching for a lemon, Benedicktus says. We can also reduce psychological costs, such as uncertainty, by generating business through referrals, monitoring and communicating customer satisfaction levels, and increasing product trial and demonstration opportunities.
Alternatively, a focus on customer benefits like product quality and delivering excellent customer experiences also increases value, he adds. Customers don’t necessarily want to spend less money, but overall, people just want more for the money they do spend.
People make the difference: Marketing is a group of activities that consists of products, promotions, pricing and place (distribution) strategies. However, no marketing mix strategy is any good without great people, he says.
Now is the time that businesses should be most concerned with improving their sales teams, hiring customer oriented employees (especially on the front-line), cross-training, and engaging existing employees regarding factors that might be contributing to low morale or less than optimal performance.
Maintain marketing: As your competitors cut their marketing budgets and market presence, increase your advertising to gain market share, he says.
Advertising becomes less expensive when fewer businesses are purchasing spots, so deals are out there if you are willing to negotiate with communications providers.
The key is to maintain or increase frequency of ads, and for goodness sake, differentiate yourself by not saying things like “in these difficult times.”
To read the original article, click here.
Monday, March 9, 2009
Using Bribes ("Free Gifts") to Boost Your Profits
Here's an excerpt from an article titled "Guerilla Bribes" by Jay Conrad Levinson, the creator of Guerilla Marketing. Every entrepreneur, especially small business oweners, can benefit from doing a little Guerilla Marketing. This article discusses how effective bribes can be at generating leads, increasing name awareness, thanking customers, boosting store traffic, and the amazing results they have with every demographic.
"The polite phrases for bribes are "advertising specialties" or "free gifts." Whatever term you use, know that bribes work on all demographic groups. Bribes do a bang-up job of empowering your marketing. Unlike premiums, which may require a purchase, bribes are given for free and offered for free. Their primary purposes are to generate leads, increase name awareness, make friends, thank customers, boost store traffic, introduce new things, motivate people to act, and create an unconscious obligation to do business with you.
During the nineties, the most popular bribes in the United States have been T-shirts and baseball caps, jackets, headbands, writing instruments, desk and office accessories, scratchpads, and glassware and ceramics. Mousepads and screensavers are moving up fast. So is free information.
Marketing people invest over $15 billion on bribes each year. Reasons: they fit almost any marketing budget; they complement other media; they can be directed to selected audiences; people jump through hoops to get them for free. About the only disadvantage is the teeny-tiny space available to say anything to the recipient. There's usually room for your name, possibly your theme line and logo, but that's it.
So, do these bribes work? Well, 40% of people can remember the name of the advertiser as long as six months after receiving the free gift. And 31% use the gift at least one year after receiving it. That's not even counting the high response. And the goodwill.Probably the most popular of the old-time bribes were calendars. Today, with the average household having four calendars, you might be smart to consider them again.
A recent study proved that free gifts not only increased mail response, but also raised the dollar purchase per sale a whooping 321%. Naturally, they generate positive feeling about you. And those feelings often lead, not only to sales, but also to closer relationships. Guerrillas are always trying to increase the number of their close business relationships.
Once you've made the decision to try a bribe, ask these five questions: 1. How many people do I want to reach? 2. How much money do I have to spend? 3. What message do I want to print? 4. What gift will be most useful to my prospects? 5. Is this a unique and desirable gift? Would I want it?
If you can show a handsome color photo of the enticement while offering it for free, you're about to be hooked by this sorta sleazy, but very human method of increasing responses, traffic, leads and profits.
Every guerrilla knows that the most powerful word in the language of marketing is "free." They've learned that it correlates directly with the most powerful goal of marketing a business -- profits."
To read the original article, click here.
This is one of the many reasons why TaDa came up with our Incentive Certificate Program which allows our members print an unlimited number of certificates for complimentary vacations that they can use to market their business.
"The polite phrases for bribes are "advertising specialties" or "free gifts." Whatever term you use, know that bribes work on all demographic groups. Bribes do a bang-up job of empowering your marketing. Unlike premiums, which may require a purchase, bribes are given for free and offered for free. Their primary purposes are to generate leads, increase name awareness, make friends, thank customers, boost store traffic, introduce new things, motivate people to act, and create an unconscious obligation to do business with you.
During the nineties, the most popular bribes in the United States have been T-shirts and baseball caps, jackets, headbands, writing instruments, desk and office accessories, scratchpads, and glassware and ceramics. Mousepads and screensavers are moving up fast. So is free information.
Marketing people invest over $15 billion on bribes each year. Reasons: they fit almost any marketing budget; they complement other media; they can be directed to selected audiences; people jump through hoops to get them for free. About the only disadvantage is the teeny-tiny space available to say anything to the recipient. There's usually room for your name, possibly your theme line and logo, but that's it.
So, do these bribes work? Well, 40% of people can remember the name of the advertiser as long as six months after receiving the free gift. And 31% use the gift at least one year after receiving it. That's not even counting the high response. And the goodwill.Probably the most popular of the old-time bribes were calendars. Today, with the average household having four calendars, you might be smart to consider them again.
A recent study proved that free gifts not only increased mail response, but also raised the dollar purchase per sale a whooping 321%. Naturally, they generate positive feeling about you. And those feelings often lead, not only to sales, but also to closer relationships. Guerrillas are always trying to increase the number of their close business relationships.
Once you've made the decision to try a bribe, ask these five questions: 1. How many people do I want to reach? 2. How much money do I have to spend? 3. What message do I want to print? 4. What gift will be most useful to my prospects? 5. Is this a unique and desirable gift? Would I want it?
If you can show a handsome color photo of the enticement while offering it for free, you're about to be hooked by this sorta sleazy, but very human method of increasing responses, traffic, leads and profits.
Every guerrilla knows that the most powerful word in the language of marketing is "free." They've learned that it correlates directly with the most powerful goal of marketing a business -- profits."
To read the original article, click here.
This is one of the many reasons why TaDa came up with our Incentive Certificate Program which allows our members print an unlimited number of certificates for complimentary vacations that they can use to market their business.
Sunday, March 8, 2009
How a Website Helps Your Restaurant Compete to The Best of Its Ability
People are looking for your website. Do you have one? If you do, what does it say about your restaurant? Can people find you in the search engines for the terms you think you should be listed under? If they can find you, are you giving them what they’re looking for when they visit your website? These are all questions that you need to address when you consider the online presence you want for your restaurant.
We live in an information based society. With the explosion of the internet, people can get information about anything, anytime. People no longer hope they can find what they are looking for online, they expect to be able to find what they are looking for online. With that being said, it is amazing how many restaurants still don’t have there own website, or at least one that people can find. There is already information about your restaurant available online, whether you have provided it through your own website or not. Without a website you are leaving the responsibility of informing your customers to someone else.
If your customers can’t find your website, or you don’t have one, people researching their restaurant choices on the internet will simply search out another restaurant. There are more choices in the restaurant business than nearly any other industry. In a competitive market like that, you certainly can’t afford to disappoint customers that are actively searching out your restaurant by not making your presence available to them. Not only are you turning away interested customers, but without a website, new customers have no way of discovering you online. In a society that is moving towards using the internet as the number one research tool, that is a dangerous road to travel.
If you are one of the skeptics about the effectiveness of a website, don’t fall victim to the line of thinking that people aren’t searching for your website. For example, one restaurant we have built a relationship with has a website that we track visitors to. As I write this there have been 762 unique visitors and 2487 individual page loads on their site in the past 30 days. That’s an average of about 25 unique visitors and 83 page loads per day. Of those visitors, the majority of them were referred to the site by searching for the name of the restaurant in a search engine. Others came from search terms like “Best restaurant in (the city name)” or “Wolf Blass Platinum Label”, a wine that happens to be in their wine list. The point is that people are looking for information specifically about your restaurant whether you have a website or not. You owe it to yourself to provide those interested people with the information they are looking for.
The best part about the internet is that you can provide your customers with more information about your restaurant than they would ever need, and it costs you less per month to host a website than placing a single radio ad. For as little as $20 a month, you can host a website that you can easily make changes to yourself. A domain name will run you about $8 per year. You’d be hard pressed to find any other medium that allows you to access as many people as the internet does at a cost that low.
We live in an information based society. With the explosion of the internet, people can get information about anything, anytime. People no longer hope they can find what they are looking for online, they expect to be able to find what they are looking for online. With that being said, it is amazing how many restaurants still don’t have there own website, or at least one that people can find. There is already information about your restaurant available online, whether you have provided it through your own website or not. Without a website you are leaving the responsibility of informing your customers to someone else.
If your customers can’t find your website, or you don’t have one, people researching their restaurant choices on the internet will simply search out another restaurant. There are more choices in the restaurant business than nearly any other industry. In a competitive market like that, you certainly can’t afford to disappoint customers that are actively searching out your restaurant by not making your presence available to them. Not only are you turning away interested customers, but without a website, new customers have no way of discovering you online. In a society that is moving towards using the internet as the number one research tool, that is a dangerous road to travel.
If you are one of the skeptics about the effectiveness of a website, don’t fall victim to the line of thinking that people aren’t searching for your website. For example, one restaurant we have built a relationship with has a website that we track visitors to. As I write this there have been 762 unique visitors and 2487 individual page loads on their site in the past 30 days. That’s an average of about 25 unique visitors and 83 page loads per day. Of those visitors, the majority of them were referred to the site by searching for the name of the restaurant in a search engine. Others came from search terms like “Best restaurant in (the city name)” or “Wolf Blass Platinum Label”, a wine that happens to be in their wine list. The point is that people are looking for information specifically about your restaurant whether you have a website or not. You owe it to yourself to provide those interested people with the information they are looking for.
The best part about the internet is that you can provide your customers with more information about your restaurant than they would ever need, and it costs you less per month to host a website than placing a single radio ad. For as little as $20 a month, you can host a website that you can easily make changes to yourself. A domain name will run you about $8 per year. You’d be hard pressed to find any other medium that allows you to access as many people as the internet does at a cost that low.
Thursday, March 5, 2009
Differences Between Email and Direct Mail
Here is part of an article from Ethan Boldt, editor-in-chief, Inside Direct Mail. He makes great points about many similarities between e-mail and direct mail copy and how understanding the key differences will help you run a truly effective multichannel campaign. Here are his thoughts...
The Offer
"While [both channels] require the same understanding of direct marketing principles, there are differences in creative tactics—and e-mail requires even more emphasis on the offer than direct mail," explains Lee Marc Stein, copywriter and author of "Street Smart Direct Marketing." E-mail prospects are not going to take the time to read the copy and respond to the creative like direct mail prospects, so cut to the chase—"what's the offer?"—is even more key in e-mail, he explains.
Incorporating The News
"Direct marketing copy that reflects current news and events usually outpulls copy that is not written with references to current affairs," says Bob Bly, copywriter and author of "The Copywriter's Handbook." He adds that incorporating news into copy is even more important in e-mail marketing than it is in direct mail. "In promoting investment newsletters, for example, if the Fed is going to announce a rate hike this week, your e-mails virtually have to be built around that theme," describes Bly.
The Offer
"While [both channels] require the same understanding of direct marketing principles, there are differences in creative tactics—and e-mail requires even more emphasis on the offer than direct mail," explains Lee Marc Stein, copywriter and author of "Street Smart Direct Marketing." E-mail prospects are not going to take the time to read the copy and respond to the creative like direct mail prospects, so cut to the chase—"what's the offer?"—is even more key in e-mail, he explains.
Incorporating The News
"Direct marketing copy that reflects current news and events usually outpulls copy that is not written with references to current affairs," says Bob Bly, copywriter and author of "The Copywriter's Handbook." He adds that incorporating news into copy is even more important in e-mail marketing than it is in direct mail. "In promoting investment newsletters, for example, if the Fed is going to announce a rate hike this week, your e-mails virtually have to be built around that theme," describes Bly.
Wednesday, March 4, 2009
Gorilla vs Guerilla - How Independent Restaurants Can Use Guerilla Marketing Tactics To Defeat The Chains (Part 2 of 2)
Three principles provide an advantage to independents:
Ambience
Menu
Staff
The ambience is obviously the most prevalent factor in defining a unique capacity for independent operators. Ask yourself what options you have in making your environment a warm and welcome experience. This doesn’t mean you need to invest in remodeling, it means adjusting what you have on hand. Light, air quality, condition of the fixtures, and general cleanliness will all affect the “ambience factors” an independent operator can provide. It should be regular maintenance to change light-bulbs, dust fixtures, and keep the house clean. However, the slight alterations an independent operator can make is a tactic to his disposal.
But it goes further. It’s no secret that department stores play music that is conducive to consumer spending. You won’t hear tired, worn out love songs being played at K-Mart. Rather, they’ve adapted to the listening habits of their customers. Restaurants do this, too. Smart operators will always play music that fits their environment or the customers listening habits. Independents can defy corporate radio in their establishments and can use this to their advantage. Using your music selection can be an asset, particularly during holidays.
Time of day or “daypart” analysis can benefit an independent restaurant guerrilla, as well. For instance, if you have a nice view of a sunset or waterfront property, the guerrilla can have the advantage every time. But other factors such as parking, entranceways, and other landscape fixtures can also benefit the guerrilla. Though these traits are never overlooked by chains, independents can use this to their advantage and modify them, too.
Traffic volume is a factor that a guerrilla should consider as either good or bad, and here’s why: If an independent is located in a high volume traffic area, is it something that works to their benefit during peak traffic hours? How accessible are their parking areas? Is their outdoor promotion logical or attractive? These are the first and obvious concerns you should ask when benefiting from high volume traffic areas. If your dinner rush hour is between 6:00 pm and 10:00 pm, guerrillas should always seek to maximize their potential by implementing ideas that bring in customers during non-peak hours.
A report released by Cornell University’s Center for Hospitality Research on April 30, 2004 confirms this position by indicating that 75 percent of respondents said they would in fact dine during off peak hours if there was an incentive to do so. This is important to remember because the independent restaurant guerrilla can ease the waiting time for tables during peak hours, and increase sales and customer satisfaction simultaneously by inserting off peak hour incentives for their customers.
But it goes both ways. The chains can throw their weight in areas that can dramatically sway attention to the public. Most notably in the jingles created for menu items such as “Chili’s Baby Back Ribs,” or the McDonald’s Big Mac songs. Did this lead to sales? You bet it did! While guerrillas are left humming these songs as they go to work, Chili’s and McDonald’s succeeded in grabbing your attention. By viewing these ads carefully, you’ll see that they are designed to garner demand at certain times of day.
It all relates to the menu. Because the menu is the most adjusted and most often victimized element for an independent operator, putting the menu under the blade before the microscope is a fatal error, and should be avoided. Rather, consider how some simple tweaking on your menu would be more rational.
Just because the chain down the road specializes in ribs, doesn’t mean you need ribs on your menu. Why not use a chop instead? The point is this: instead of improvising a popular chain menu item, create a similar item of the same product (such as pork in this case) that the chain won’t offer. One case that comes to mind is how an independent restaurant guerrilla offered a one pound stuffed pork chop, where the nearest chain was known for their ribs. Chains are slow to make extraordinary menu adjustments, which is an advantage that independent guerrillas should always benefit from.
Independent restaurant operators also have the flexibility for menu development that chains cannot offer. For instance, the low-carb diet is extremely popular right now. Providing a daily or temporary low-carb selection for your guests will keep them coming back. Some independent operators have adopted a low-carb menu for their guests, but going this far is not always an option for others. Providing distinctive menu items for low-carb guests, or other trendy dieters such as vegetarians, will give you market share that chains are not ordinarily known for.
Chains are often in the position of gaining consumer trust while providing trendy and appealing food items simultaneously. Chains invest heavily in consumer demand, product research and development, and pricing structures that coincide with consumer interests. Obviously, the independent restaurant guerrilla does not have the resources or capacity for the R & D the major chains can utilize, so if you can’t beat the research, use it instead. For instance, if a chain has a martini drink list that has become their hallmark, why not adopt a house martini or more to satisfy consumer interest. This doesn’t mean duplicating the specialties of the chain, it means confronting that hallmark and profiting from it the same way the chain does. Through careful training and input from customers or your staff, an independent restaurant guerrilla can benefit from the same research and product development that chains invest in.
Which poses this question: Can the independent restaurant guerilla convey this tactic easily through their staffs?
The staff to an independent restaurant guerrilla is a primary concern to the nature of their establishment. While the competition for skilled, experienced and honed labor is fierce and competitive, both sides seek to obtain the best employees to appease the customers’ experience. Picking off key employees from one restaurant to another, between the independents and chains is not uncommon. There are three parts to any restaurant staff:
Front of the House (FOH)
Back of the House (BOH)
Management
Your front of the house (FOH) should always be treated as professional sales people. Insuring that they are in tune with your menu, knowing the dishes and their presentations adds big sales. Having attractive daily specials to offer is symbolic of the guerrilla establishments. There has always been a “myth” that guerrilla establishments offer nightly dinner specials because they have to get rid of old or leftover food product. But that is myth. Daily or nightly dinner specials work to the benefit of the guerrilla because it gives them a chance to market new dinner items and show their flexibility and talent.
But what good is a nightly dinner special if your waitstaff can’t sell it? There’s a certain and real bond that should exist between the menu and nightly dinner specials. Going wildly out of tune to meet a market niche is a dangerous proposition, and should be reserved for holidays or special events. Creative training techniques can help your waitstaff maximize their potential while selling your menu to customers. The better they understand your menu, the greater your sales.
Your back of the house (BOH) is the most essential organ to an independent restaurant guerrilla. The kitchen is where it all begins. Chains have been successful in developing fail proof mechanisms to control the consistency of food products. Large commissaries provide large quantities of food and distribute it out to the units. Its mechanization is so large that when McDonald’s recently changed their chicken nuggets from dark meat to white meat, the entire chicken market in the United States felt the change. Independent restaurant guerrillas are then forced to absorb the price structures that can be set by chains. If a chain as large as McDonald’s (with 30,000 units) makes a change to their menu, the entire foodservice industry can feel the impact of that demand.
How is your back of the house measuring up to standards? Are there proper training techniques in place? Are food safety and handling techniques in place? Is turnover affecting your food quality? Are they satisfied with their jobs? These are things that cannot be overlooked or ignored, and can often vibrate the morale of the entire house. Insuring that your BOH can produce quality in times of peak business hours is highly important to independent restaurant guerrillas. Chains elude this issue by inserting bells, whistles, and buzzers to remind the kitchen staff that food is ready. Independent restaurant guerrillas more often rely on the experience and talent of the BOH to produce without such “reminders.” Training becomes the safety net toward consistency for independent restaurant guerrillas, and must always be viewed as the most powerful weapon in the guerillas' arsenal.
Management is the binding factor for an independent restaurant guerrilla. It is the trifocal responsibility of management to bring the BOH, FOH and the customer together. There is no such thing as a natural ability to bind these three together, creating a daily challenge to find comfort and happiness with all three. The most effective managers understand their customer base, their community, their staff and their operations. If any of these components are missing, one can expect weaknesses in the overall performance of their establishment. However, finding this composition is not always an easy chore for either a chain or an independent. Having management that can articulate, analyze and be responsive to both the needs of the establishment and customer simultaneously is pivotal to any business.
What’s the distinction between the independent restaurant manager and the chain manager? As Ron Yudd, author of “Points of Profit Leadership,” indicates, it’s this: “The company or shop is often driven by the operations manual - the product looks like this, the food cost should be this, the delivery time must be less than this and service to the guest sounds like this - and on it goes.” For independent restaurant guerrillas its nothing like this, rather they acclimate to the characteristics of their environment, establishment, location, customer base, staff and menu. Guerrilla managers adopt these traits on a case-by-case basis, making decisions based on the nature of the issue at hand. Because nepotism is a strong peculiarity among guerrillas, finding continuity in the decision making process continues to be an issue for independent restaurant guerrillas.
Finally, independent restaurant guerrillas should always seek to benefit from catering or banquet functions. This is the biggest advantage guerrillas have over chains! Michael Attias, founder of The Results Group, says that “catering and banquets can add up to 30 percent to the bottom line.” Why not look at it this way: it’s an additional 30 percent advantage independents have over the chains. With rare exception, chains typically do not offer these services, which leaves the market wide open for guerrillas.
Functions (as we call them in the industry), allow independent restaurant guerrillas to serve large numbers of people and allow an opportunity to flaunt the products and services that they offer. Everything from hog roasts to lobster boils, and on down to the basic birthday party, the independent restaurant guerrilla is able to accommodate the needs of large groups of people, whereas the chains, (if they do accommodate groups of people), are often left without the capacity to handle large functions, and typically are not designed to accommodate large functions.
In summary, it’s important to remember that independent restaurant guerrillas (as we have defined them here) have unique capabilities that distinctly separate them from corporate chains. Finding those capabilities and capitalizing on them will enhance the survival rates of independent restaurant operators. Utilizing these characteristics and modifying them in creative and unique ways will bring customers to the door, dollars to the till, and satisfaction to your employees. You don’t have to do as the Romans do to compete, rather let the Romans do as you do to identify their audience. Keeping your product quality high, your staff well-trained and knowledgeable of your menu, and keeping your service methods high will cause the chains to fight for every inch of the market share.
This article was written by Eric Hahn, who has an extensive background in operations. A Phi Alpha Theta graduate of Indiana University, Hahn is also a former congressional lobbyist researcher with the National Federation of Independent Business (NFIB) in Washington,D.C.
(for the whole article click here)
Ambience
Menu
Staff
The ambience is obviously the most prevalent factor in defining a unique capacity for independent operators. Ask yourself what options you have in making your environment a warm and welcome experience. This doesn’t mean you need to invest in remodeling, it means adjusting what you have on hand. Light, air quality, condition of the fixtures, and general cleanliness will all affect the “ambience factors” an independent operator can provide. It should be regular maintenance to change light-bulbs, dust fixtures, and keep the house clean. However, the slight alterations an independent operator can make is a tactic to his disposal.
But it goes further. It’s no secret that department stores play music that is conducive to consumer spending. You won’t hear tired, worn out love songs being played at K-Mart. Rather, they’ve adapted to the listening habits of their customers. Restaurants do this, too. Smart operators will always play music that fits their environment or the customers listening habits. Independents can defy corporate radio in their establishments and can use this to their advantage. Using your music selection can be an asset, particularly during holidays.
Time of day or “daypart” analysis can benefit an independent restaurant guerrilla, as well. For instance, if you have a nice view of a sunset or waterfront property, the guerrilla can have the advantage every time. But other factors such as parking, entranceways, and other landscape fixtures can also benefit the guerrilla. Though these traits are never overlooked by chains, independents can use this to their advantage and modify them, too.
Traffic volume is a factor that a guerrilla should consider as either good or bad, and here’s why: If an independent is located in a high volume traffic area, is it something that works to their benefit during peak traffic hours? How accessible are their parking areas? Is their outdoor promotion logical or attractive? These are the first and obvious concerns you should ask when benefiting from high volume traffic areas. If your dinner rush hour is between 6:00 pm and 10:00 pm, guerrillas should always seek to maximize their potential by implementing ideas that bring in customers during non-peak hours.
A report released by Cornell University’s Center for Hospitality Research on April 30, 2004 confirms this position by indicating that 75 percent of respondents said they would in fact dine during off peak hours if there was an incentive to do so. This is important to remember because the independent restaurant guerrilla can ease the waiting time for tables during peak hours, and increase sales and customer satisfaction simultaneously by inserting off peak hour incentives for their customers.
But it goes both ways. The chains can throw their weight in areas that can dramatically sway attention to the public. Most notably in the jingles created for menu items such as “Chili’s Baby Back Ribs,” or the McDonald’s Big Mac songs. Did this lead to sales? You bet it did! While guerrillas are left humming these songs as they go to work, Chili’s and McDonald’s succeeded in grabbing your attention. By viewing these ads carefully, you’ll see that they are designed to garner demand at certain times of day.
It all relates to the menu. Because the menu is the most adjusted and most often victimized element for an independent operator, putting the menu under the blade before the microscope is a fatal error, and should be avoided. Rather, consider how some simple tweaking on your menu would be more rational.
Just because the chain down the road specializes in ribs, doesn’t mean you need ribs on your menu. Why not use a chop instead? The point is this: instead of improvising a popular chain menu item, create a similar item of the same product (such as pork in this case) that the chain won’t offer. One case that comes to mind is how an independent restaurant guerrilla offered a one pound stuffed pork chop, where the nearest chain was known for their ribs. Chains are slow to make extraordinary menu adjustments, which is an advantage that independent guerrillas should always benefit from.
Independent restaurant operators also have the flexibility for menu development that chains cannot offer. For instance, the low-carb diet is extremely popular right now. Providing a daily or temporary low-carb selection for your guests will keep them coming back. Some independent operators have adopted a low-carb menu for their guests, but going this far is not always an option for others. Providing distinctive menu items for low-carb guests, or other trendy dieters such as vegetarians, will give you market share that chains are not ordinarily known for.
Chains are often in the position of gaining consumer trust while providing trendy and appealing food items simultaneously. Chains invest heavily in consumer demand, product research and development, and pricing structures that coincide with consumer interests. Obviously, the independent restaurant guerrilla does not have the resources or capacity for the R & D the major chains can utilize, so if you can’t beat the research, use it instead. For instance, if a chain has a martini drink list that has become their hallmark, why not adopt a house martini or more to satisfy consumer interest. This doesn’t mean duplicating the specialties of the chain, it means confronting that hallmark and profiting from it the same way the chain does. Through careful training and input from customers or your staff, an independent restaurant guerrilla can benefit from the same research and product development that chains invest in.
Which poses this question: Can the independent restaurant guerilla convey this tactic easily through their staffs?
The staff to an independent restaurant guerrilla is a primary concern to the nature of their establishment. While the competition for skilled, experienced and honed labor is fierce and competitive, both sides seek to obtain the best employees to appease the customers’ experience. Picking off key employees from one restaurant to another, between the independents and chains is not uncommon. There are three parts to any restaurant staff:
Front of the House (FOH)
Back of the House (BOH)
Management
Your front of the house (FOH) should always be treated as professional sales people. Insuring that they are in tune with your menu, knowing the dishes and their presentations adds big sales. Having attractive daily specials to offer is symbolic of the guerrilla establishments. There has always been a “myth” that guerrilla establishments offer nightly dinner specials because they have to get rid of old or leftover food product. But that is myth. Daily or nightly dinner specials work to the benefit of the guerrilla because it gives them a chance to market new dinner items and show their flexibility and talent.
But what good is a nightly dinner special if your waitstaff can’t sell it? There’s a certain and real bond that should exist between the menu and nightly dinner specials. Going wildly out of tune to meet a market niche is a dangerous proposition, and should be reserved for holidays or special events. Creative training techniques can help your waitstaff maximize their potential while selling your menu to customers. The better they understand your menu, the greater your sales.
Your back of the house (BOH) is the most essential organ to an independent restaurant guerrilla. The kitchen is where it all begins. Chains have been successful in developing fail proof mechanisms to control the consistency of food products. Large commissaries provide large quantities of food and distribute it out to the units. Its mechanization is so large that when McDonald’s recently changed their chicken nuggets from dark meat to white meat, the entire chicken market in the United States felt the change. Independent restaurant guerrillas are then forced to absorb the price structures that can be set by chains. If a chain as large as McDonald’s (with 30,000 units) makes a change to their menu, the entire foodservice industry can feel the impact of that demand.
How is your back of the house measuring up to standards? Are there proper training techniques in place? Are food safety and handling techniques in place? Is turnover affecting your food quality? Are they satisfied with their jobs? These are things that cannot be overlooked or ignored, and can often vibrate the morale of the entire house. Insuring that your BOH can produce quality in times of peak business hours is highly important to independent restaurant guerrillas. Chains elude this issue by inserting bells, whistles, and buzzers to remind the kitchen staff that food is ready. Independent restaurant guerrillas more often rely on the experience and talent of the BOH to produce without such “reminders.” Training becomes the safety net toward consistency for independent restaurant guerrillas, and must always be viewed as the most powerful weapon in the guerillas' arsenal.
Management is the binding factor for an independent restaurant guerrilla. It is the trifocal responsibility of management to bring the BOH, FOH and the customer together. There is no such thing as a natural ability to bind these three together, creating a daily challenge to find comfort and happiness with all three. The most effective managers understand their customer base, their community, their staff and their operations. If any of these components are missing, one can expect weaknesses in the overall performance of their establishment. However, finding this composition is not always an easy chore for either a chain or an independent. Having management that can articulate, analyze and be responsive to both the needs of the establishment and customer simultaneously is pivotal to any business.
What’s the distinction between the independent restaurant manager and the chain manager? As Ron Yudd, author of “Points of Profit Leadership,” indicates, it’s this: “The company or shop is often driven by the operations manual - the product looks like this, the food cost should be this, the delivery time must be less than this and service to the guest sounds like this - and on it goes.” For independent restaurant guerrillas its nothing like this, rather they acclimate to the characteristics of their environment, establishment, location, customer base, staff and menu. Guerrilla managers adopt these traits on a case-by-case basis, making decisions based on the nature of the issue at hand. Because nepotism is a strong peculiarity among guerrillas, finding continuity in the decision making process continues to be an issue for independent restaurant guerrillas.
Finally, independent restaurant guerrillas should always seek to benefit from catering or banquet functions. This is the biggest advantage guerrillas have over chains! Michael Attias, founder of The Results Group, says that “catering and banquets can add up to 30 percent to the bottom line.” Why not look at it this way: it’s an additional 30 percent advantage independents have over the chains. With rare exception, chains typically do not offer these services, which leaves the market wide open for guerrillas.
Functions (as we call them in the industry), allow independent restaurant guerrillas to serve large numbers of people and allow an opportunity to flaunt the products and services that they offer. Everything from hog roasts to lobster boils, and on down to the basic birthday party, the independent restaurant guerrilla is able to accommodate the needs of large groups of people, whereas the chains, (if they do accommodate groups of people), are often left without the capacity to handle large functions, and typically are not designed to accommodate large functions.
In summary, it’s important to remember that independent restaurant guerrillas (as we have defined them here) have unique capabilities that distinctly separate them from corporate chains. Finding those capabilities and capitalizing on them will enhance the survival rates of independent restaurant operators. Utilizing these characteristics and modifying them in creative and unique ways will bring customers to the door, dollars to the till, and satisfaction to your employees. You don’t have to do as the Romans do to compete, rather let the Romans do as you do to identify their audience. Keeping your product quality high, your staff well-trained and knowledgeable of your menu, and keeping your service methods high will cause the chains to fight for every inch of the market share.
This article was written by Eric Hahn, who has an extensive background in operations. A Phi Alpha Theta graduate of Indiana University, Hahn is also a former congressional lobbyist researcher with the National Federation of Independent Business (NFIB) in Washington,D.C.
(for the whole article click here)
Gorilla vs Guerilla - How Independent Restaurants Can Use Guerilla Marketing Tactics to Defeat The Chains ( Part 1 of 2)
Independent restaurant operators represent the American Dream to its finest core. The individual distinction and character the independent restaurant operator brings to the American consumer, should never be outwit by the chains that daunt them. In the 1970’s the independent restaurant held a commanding 85% of the market share. During the 1980’s, chains perfected their strategies through their own survival, and mastered their ability to identify with consumer demand. Today, chains now hold 88% of the market share, leaving independents scrambling to find their voice in the industry.
In times like these, independent restaurant operators are finding themselves tough squeezed by the ever-growing restaurant chains. In some areas of the country, independents have gone out of business faster than the national failure rate, because chains are capturing the majority of the market share. While chains measure consumer demand in terms of macro-economics based on large audiences, independents adopt their strategies based on local or regional demand. When independents let their guard down, they pay for it!
Enter the independent restaurant guerrilla. Jay Conrad Levinson, author of "Guerrilla Marketing" defines a guerrilla as “one who adopts frugality and thrift.” In this essay, we apply this term to the independent restaurant operator and how he adopts “guerrilla” techniques into his everyday working logic. This essay isn’t about pointing out ideas of “try this or try that,” rather it centers its attention on the overall working schematics of what an independent restaurant operator is, and how they can embrace their individuality to their advantage.
Traditionally, chains were not considered a major threat to independent restaurant operators because they were always considered to be fast food. Everyone knew exactly what they were going to eat before they got to the restaurant, and had a good idea of what they were going to spend. The drive-thru windows became symbolic landmarks that people lined up for (which is still the case), but radically different. Chains are now very prevalent in the fast-casual market, and continue to grow into the middle price range of demographics. Restaurant “rows” are confining metro diners in many parts of the country, causing chains to cannibalize their own markets to gain market presence.
It all comes down to money. When chains have large national advertising campaigns, buying power with suppliers, and celebrity or name brand recognition to solidify their position in any given market, the independent operator is always at a disadvantage to compete. The key is finding what advantages the independent restaurant operator has over the chains, and how well they capitalize on the unique characteristics they can offer. In many cases, independent restaurant guerrillas are generally smaller and can embrace their customers’ experience much more personally than chains. Yet, nothing annoys an independent restaurant guerrilla more than seeing a line of customers waiting outside to hear their name called over a loudspeaker. The independent restaurant guerrilla knows that these people are not typically interested in great food, ambience, or service; they’re in line because they already know what to expect and know the consistency. Realistically, they’re in line because they saw the menu or price from a creative television ad. But that’s an entirely different subject, so let’s not go there.
The independent restaurant guerrilla is left with little to compromise. They must turn to what instinctively draws them to the business, define the unique characteristics, and set a new competitive agenda. Independent restaurants can easily modify their prices and standards to meet local demand, which works in their favor. While chains tend to provide “manufactured” products (both quality and presentation), they are much less flexible for adjusting to local consumer demand. It’s the difference between the cookie-cutter. One uses it, the other doesn’t.
It’s widely viewed that if an independent operator has made it past the five-year mark in a community, his chances of survival (even with chains as primary competition) are much better. In spite of this, the independent operator is usually forced into changing his patterns not just because of the fierce competition, but also for the sake of retaining his staff and his customer base. In the long run it can weigh the balance of consistency and making money, which is not a position most independent operators would ever want to be in. This motivates the independent operator in different ways:
First, it causes the independent operator to be more aware of their customer base. Learning and listening to customer demand and meeting those demands, is something that the independent restaurant operator has at his disposal.
Second, it causes the independent operator to coordinate with his staff unique incentives to enhance the customer’s experience. Adjusting the mechanics of your front and back of the house routines can be a huge advantage over chains.
Lastly, it causes the independent operator to review his fixed and variable operating costs which previously may not have been considered.
Resourceful operators fine tune their unique capabilities, and use that as their first line of defense against chains. At times, it can mean an entire overhaul of the operation in order to save it. Chains take a little bit from everyone, (which naturally is a part of our free market system), and it’s important to remember that chains will provide healthy and provocative competition that can bring in dollars for independents. It’s the difference between a limited scope and a wide scope, which puts the independent at an advantage.
--Stay tuned for Part 2 of 2 tomorrow (or you can read the whole article by Eric Hahn here)
In times like these, independent restaurant operators are finding themselves tough squeezed by the ever-growing restaurant chains. In some areas of the country, independents have gone out of business faster than the national failure rate, because chains are capturing the majority of the market share. While chains measure consumer demand in terms of macro-economics based on large audiences, independents adopt their strategies based on local or regional demand. When independents let their guard down, they pay for it!
Enter the independent restaurant guerrilla. Jay Conrad Levinson, author of "Guerrilla Marketing" defines a guerrilla as “one who adopts frugality and thrift.” In this essay, we apply this term to the independent restaurant operator and how he adopts “guerrilla” techniques into his everyday working logic. This essay isn’t about pointing out ideas of “try this or try that,” rather it centers its attention on the overall working schematics of what an independent restaurant operator is, and how they can embrace their individuality to their advantage.
Traditionally, chains were not considered a major threat to independent restaurant operators because they were always considered to be fast food. Everyone knew exactly what they were going to eat before they got to the restaurant, and had a good idea of what they were going to spend. The drive-thru windows became symbolic landmarks that people lined up for (which is still the case), but radically different. Chains are now very prevalent in the fast-casual market, and continue to grow into the middle price range of demographics. Restaurant “rows” are confining metro diners in many parts of the country, causing chains to cannibalize their own markets to gain market presence.
It all comes down to money. When chains have large national advertising campaigns, buying power with suppliers, and celebrity or name brand recognition to solidify their position in any given market, the independent operator is always at a disadvantage to compete. The key is finding what advantages the independent restaurant operator has over the chains, and how well they capitalize on the unique characteristics they can offer. In many cases, independent restaurant guerrillas are generally smaller and can embrace their customers’ experience much more personally than chains. Yet, nothing annoys an independent restaurant guerrilla more than seeing a line of customers waiting outside to hear their name called over a loudspeaker. The independent restaurant guerrilla knows that these people are not typically interested in great food, ambience, or service; they’re in line because they already know what to expect and know the consistency. Realistically, they’re in line because they saw the menu or price from a creative television ad. But that’s an entirely different subject, so let’s not go there.
The independent restaurant guerrilla is left with little to compromise. They must turn to what instinctively draws them to the business, define the unique characteristics, and set a new competitive agenda. Independent restaurants can easily modify their prices and standards to meet local demand, which works in their favor. While chains tend to provide “manufactured” products (both quality and presentation), they are much less flexible for adjusting to local consumer demand. It’s the difference between the cookie-cutter. One uses it, the other doesn’t.
It’s widely viewed that if an independent operator has made it past the five-year mark in a community, his chances of survival (even with chains as primary competition) are much better. In spite of this, the independent operator is usually forced into changing his patterns not just because of the fierce competition, but also for the sake of retaining his staff and his customer base. In the long run it can weigh the balance of consistency and making money, which is not a position most independent operators would ever want to be in. This motivates the independent operator in different ways:
First, it causes the independent operator to be more aware of their customer base. Learning and listening to customer demand and meeting those demands, is something that the independent restaurant operator has at his disposal.
Second, it causes the independent operator to coordinate with his staff unique incentives to enhance the customer’s experience. Adjusting the mechanics of your front and back of the house routines can be a huge advantage over chains.
Lastly, it causes the independent operator to review his fixed and variable operating costs which previously may not have been considered.
Resourceful operators fine tune their unique capabilities, and use that as their first line of defense against chains. At times, it can mean an entire overhaul of the operation in order to save it. Chains take a little bit from everyone, (which naturally is a part of our free market system), and it’s important to remember that chains will provide healthy and provocative competition that can bring in dollars for independents. It’s the difference between a limited scope and a wide scope, which puts the independent at an advantage.
--Stay tuned for Part 2 of 2 tomorrow (or you can read the whole article by Eric Hahn here)
Choosing The Right Tools To Market Your Restaurant
Restaurants are bombarded today with people selling all kinds of marketing ideas. This year has been difficult for many restaurant segments with lower consumer spending, higher prices and stiff competition. Restaurateurs are inundated with all kinds of buzzwords, gimmicks, advertising proposals, magazine advertizing, website improvements, email marketing ideas, viral marketing schemes, mobile marketing, coupon promotions, direct mail proposals, customer retention programs and many more.
How do you choose? Where do you invest your marketing dollars? How do you know what will work? What is a waste of money?
You could use what many restaurateurs use; a technique that I call “mud on the wall marketing”. You throw a bunch of mud balls on the wall and see what sticks. In other words, they waste a lot of money on things that don’t work to hopefully find something that does work. This is costly and unproductive.
Marketing is like taking a vacation to North Dakota to see the sights. What would be your first step? You would get a map, locate the attractions that interest you and plan the trip. Restaurant marketing is the same process.
Marketing without a plan is pure luck and very expensive. However, if you spend a few minutes planning your program, you can almost guarantee results quickly. Here is a thumbnail sketch of the process:
Step 1 – Evaluate your needs. What is it you want? Are you busy on the weekends, but can’t fill those seats during the week? Are you busy at night, but have no lunch trade? Is it a general slowdown all day long? The answers to your questions become your goals for your restaurant’s marketing plan.
Step 2 – What can you afford? What have you done in the past? How do you focus on your goal? What will set you apart from competition? Choose the tools that fit your restaurant. Be creative, venturesome and unique. Throwing a bunch of coupons in a newspaper isn’t the answer.
Step 3 – Restaurant marketing is not synonymous with advertising. There are three components to restaurant marketing – communicating your message, selling your product and delivering your product. All three aspects must be addressed in your plan.
Step 4 – Schedule your marketing efforts over the timeframe you choose. Get staff involved and determine how you will measure results.
Use these steps and your results will be spectacular. Do it once and you will never go back to “mud on the wall” tactics that rarely produce results.
How do you choose? Where do you invest your marketing dollars? How do you know what will work? What is a waste of money?
You could use what many restaurateurs use; a technique that I call “mud on the wall marketing”. You throw a bunch of mud balls on the wall and see what sticks. In other words, they waste a lot of money on things that don’t work to hopefully find something that does work. This is costly and unproductive.
Marketing is like taking a vacation to North Dakota to see the sights. What would be your first step? You would get a map, locate the attractions that interest you and plan the trip. Restaurant marketing is the same process.
Marketing without a plan is pure luck and very expensive. However, if you spend a few minutes planning your program, you can almost guarantee results quickly. Here is a thumbnail sketch of the process:
Step 1 – Evaluate your needs. What is it you want? Are you busy on the weekends, but can’t fill those seats during the week? Are you busy at night, but have no lunch trade? Is it a general slowdown all day long? The answers to your questions become your goals for your restaurant’s marketing plan.
Step 2 – What can you afford? What have you done in the past? How do you focus on your goal? What will set you apart from competition? Choose the tools that fit your restaurant. Be creative, venturesome and unique. Throwing a bunch of coupons in a newspaper isn’t the answer.
Step 3 – Restaurant marketing is not synonymous with advertising. There are three components to restaurant marketing – communicating your message, selling your product and delivering your product. All three aspects must be addressed in your plan.
Step 4 – Schedule your marketing efforts over the timeframe you choose. Get staff involved and determine how you will measure results.
Use these steps and your results will be spectacular. Do it once and you will never go back to “mud on the wall” tactics that rarely produce results.
Tuesday, March 3, 2009
More Help for Tax Time: 25 Tax Deductions for Entrepreneurs
You might want to check out an informative slide show featued in Business Week in which Bernard Kamoroff, a CPA and author of "422 Tax Deductions for Businesses & Self-Employed Individuals," identifies 25 write-offs that you may qualify for without even knowing. When in doubt, check with your accountant to see if these apply to you. To view the slide show, click here.
The "Ordinary and Necessary" Standard for Deductible Expenses
Kamoroff says business owners can reduce their tax bills by deducting expenditures that the Internal Revenue Service doesn't explicitly outline, but are nonetheless legitimate business expenses. In general, a purchase must be "ordinary and necessary" in your trade to be deductible. Few of the often-overlooked write-offs on their own will cut your tax bill substantially, but in aggregate, they can be worth the time and effort to track and deduct them. "They're all nickel and dime, but boy they can add up," Kamoroff says.
For example, two of the most overlooked write-offs, according to the National Association for the Self-Employed, are the hom office and vehicle deducations. If you use your car or truck for business, you can deduct work-related expenses for gas, maintenance, insurance, and other costs, either using the IRS's standard mileage rate or by calculating the actual costs.
If you travel for business then you may also be able to deduct some of your travel costs. Business-related meals and entertainment are only 50% deductible, although you can't write off expenses that are considered "lavish and extravagant." If your trip is exclusively for business, lodging and transportation costs are fully deductible. If the trip mixes business and personal matters, you may still be able to write off some business-related expenses.
Aside from big write-offs like travel or home-office deductions, plenty of other expenditures can save you money on taxes. If more than half your cell phone use is for business, you can deduct the cost of the business-related calls. Write off your Web hosting and domain name charges. And deduct the cost of business-related books, magazines, and newspaper subscriptions.
Meticulous Records a Must
The key to taking these small deductions is keeping track of your expenditures, so that you can show an auditor that your write-offs are truly business-related. "It is very important that they keep meticulous records, because the IRS is going to be pretty aggressive," says Chas Roy-Chowdhury, head of taxation for the Association of Chartered Certified Accountants. But business owners who take legitimate deductions, and have the receipts, invoices, or other records to back them up, can maximize their tax savings.
The "Ordinary and Necessary" Standard for Deductible Expenses
Kamoroff says business owners can reduce their tax bills by deducting expenditures that the Internal Revenue Service doesn't explicitly outline, but are nonetheless legitimate business expenses. In general, a purchase must be "ordinary and necessary" in your trade to be deductible. Few of the often-overlooked write-offs on their own will cut your tax bill substantially, but in aggregate, they can be worth the time and effort to track and deduct them. "They're all nickel and dime, but boy they can add up," Kamoroff says.
For example, two of the most overlooked write-offs, according to the National Association for the Self-Employed, are the hom office and vehicle deducations. If you use your car or truck for business, you can deduct work-related expenses for gas, maintenance, insurance, and other costs, either using the IRS's standard mileage rate or by calculating the actual costs.
If you travel for business then you may also be able to deduct some of your travel costs. Business-related meals and entertainment are only 50% deductible, although you can't write off expenses that are considered "lavish and extravagant." If your trip is exclusively for business, lodging and transportation costs are fully deductible. If the trip mixes business and personal matters, you may still be able to write off some business-related expenses.
Aside from big write-offs like travel or home-office deductions, plenty of other expenditures can save you money on taxes. If more than half your cell phone use is for business, you can deduct the cost of the business-related calls. Write off your Web hosting and domain name charges. And deduct the cost of business-related books, magazines, and newspaper subscriptions.
Meticulous Records a Must
The key to taking these small deductions is keeping track of your expenditures, so that you can show an auditor that your write-offs are truly business-related. "It is very important that they keep meticulous records, because the IRS is going to be pretty aggressive," says Chas Roy-Chowdhury, head of taxation for the Association of Chartered Certified Accountants. But business owners who take legitimate deductions, and have the receipts, invoices, or other records to back them up, can maximize their tax savings.
Going Commercial: Firms Tout Video Ads
by Pete Barlas in Investor's Business Daily, posted 2/11/2009
When Jim Kaskade wanted to help promote his wife's new online store last year, the couple didn't settle for Web-display or text-search ads.
Instead, they turned to San Mateo, Calif.-based Jivox. Using Jivox's video-making and ad-placement technology, Kaskade created a 23-second video spot for the startup, GreenEdge Kids, which sells eco-friendly children's products.
Jivox is one of several little-known companies, including Boulevards New Media and SpotMixer, trying to cash in as they help small businesses get a piece of the growing online video ad market.
Many of these companies are following Google, (GOOG) the Web's search leader, which launched a similar video ad program for businesses in February 2008.
A Big Future?
GreenEdge launched its video ad campaign during the Christmas shopping season, so it's too early to quantify its effect. But Kaskade believes video ads have a place alongside — if not higher than — banner or search ads.
"If you have somebody looking at a 30-second spot, they are learning about your business for 30 seconds," he said. "So it's much more significant than looking at text ads or banner ads that have very little information." Small businesses should adapt their marketing to changing times, says Phil Leigh, an analyst for research firm Inside Digital Media.
"The Internet has basically destroyed the Yellow Pages, and local businesses are having a hard time distinguishing themselves and even getting found," he said. "Video is crucial to the future of the Internet for all businesses including small businesses."
Jivox debuted in September. The company wants to make getting into online videos easy and cheap. Companies can create a 30-second video ad on the site for free using their own video or by using stock photos, videos and music Jivox provides. Jivox then places the completed ad on its network of more than 600 local TV, radio, newspaper and weather Web sites. The list includes a network of newspaper sites operating under the Examiner.com name and Kron4.com, a TV station in San Francisco.
Jivox places the ads to reach a targeted audience, says Jim Gustike, the company's head of marketing. "The ads appear only where it is locally applicable for that business," he said. "That is the special sauce behind the Web site."
Jivox customers include small retailers, restaurants, cosmetic surgeons, dentists, handymen and bed-and-breakfast inns. Jivox won't say how many small businesses have signed up. But the recession hasn't dampened growth, Gustike says. "We had our concerns as we saw our economy declining," he said. "But companies are trying to keep their businesses going, and they are searching for new ways to market themselves and set themselves apart from everybody else."
For just $250, a small business can show its video 17,000 times across Jivox's network of sites, a measurement known as an ad impression. Kaskade says he created an ad in a little more than two hours.
He paid $500 and got 70,000 impressions for the ad. For Kaskade, the price was too good to pass up. "I couldn't get that for bricks and mortar; 500 bucks to get 70,000 people to come through my door? You have got to try it," he said.
Hitting The Target
Kaskade also took advantage of the ability of the service to target the ad to specific locations. He started out placing the ad on local Web sites in San Francisco and Seattle, areas known for their environmental friendliness. Jivox also allows advertisers to offer discount coupons while the ad is running. While many large companies use video more as a branding device, small businesses have more immediate needs, Gustike says.
"Small businesses are looking to sell products, so there has got to be results from your marketing activities," he said. Video ads are just a small fraction of the online ad market. But they could play a more vital role as Internet connections get faster and users grow accustomed to online video. By 2013 sales of online video ads in the U.S. are expected to grow to $4.6 billion vs. $587 million last year, says research firm eMarketer.
In November, Internet users in the U.S. watched 12.7 billion videos online, up 34% vs. the year-ago period, says research firm comScore. Advertisers' ability to track whether somebody watched an ad is helping to boost online video ad sales. But a more fundamental issue might be at play, says Thomas Harpointer, chief executive of AIS Media, an Internet marketing and Web services company. "People are lazy," he said. "We all prefer to watch a video rather than read a full page of text — it's just easier."
(for the original article click here)
When Jim Kaskade wanted to help promote his wife's new online store last year, the couple didn't settle for Web-display or text-search ads.
Instead, they turned to San Mateo, Calif.-based Jivox. Using Jivox's video-making and ad-placement technology, Kaskade created a 23-second video spot for the startup, GreenEdge Kids, which sells eco-friendly children's products.
Jivox is one of several little-known companies, including Boulevards New Media and SpotMixer, trying to cash in as they help small businesses get a piece of the growing online video ad market.
Many of these companies are following Google, (GOOG) the Web's search leader, which launched a similar video ad program for businesses in February 2008.
A Big Future?
GreenEdge launched its video ad campaign during the Christmas shopping season, so it's too early to quantify its effect. But Kaskade believes video ads have a place alongside — if not higher than — banner or search ads.
"If you have somebody looking at a 30-second spot, they are learning about your business for 30 seconds," he said. "So it's much more significant than looking at text ads or banner ads that have very little information." Small businesses should adapt their marketing to changing times, says Phil Leigh, an analyst for research firm Inside Digital Media.
"The Internet has basically destroyed the Yellow Pages, and local businesses are having a hard time distinguishing themselves and even getting found," he said. "Video is crucial to the future of the Internet for all businesses including small businesses."
Jivox debuted in September. The company wants to make getting into online videos easy and cheap. Companies can create a 30-second video ad on the site for free using their own video or by using stock photos, videos and music Jivox provides. Jivox then places the completed ad on its network of more than 600 local TV, radio, newspaper and weather Web sites. The list includes a network of newspaper sites operating under the Examiner.com name and Kron4.com, a TV station in San Francisco.
Jivox places the ads to reach a targeted audience, says Jim Gustike, the company's head of marketing. "The ads appear only where it is locally applicable for that business," he said. "That is the special sauce behind the Web site."
Jivox customers include small retailers, restaurants, cosmetic surgeons, dentists, handymen and bed-and-breakfast inns. Jivox won't say how many small businesses have signed up. But the recession hasn't dampened growth, Gustike says. "We had our concerns as we saw our economy declining," he said. "But companies are trying to keep their businesses going, and they are searching for new ways to market themselves and set themselves apart from everybody else."
For just $250, a small business can show its video 17,000 times across Jivox's network of sites, a measurement known as an ad impression. Kaskade says he created an ad in a little more than two hours.
He paid $500 and got 70,000 impressions for the ad. For Kaskade, the price was too good to pass up. "I couldn't get that for bricks and mortar; 500 bucks to get 70,000 people to come through my door? You have got to try it," he said.
Hitting The Target
Kaskade also took advantage of the ability of the service to target the ad to specific locations. He started out placing the ad on local Web sites in San Francisco and Seattle, areas known for their environmental friendliness. Jivox also allows advertisers to offer discount coupons while the ad is running. While many large companies use video more as a branding device, small businesses have more immediate needs, Gustike says.
"Small businesses are looking to sell products, so there has got to be results from your marketing activities," he said. Video ads are just a small fraction of the online ad market. But they could play a more vital role as Internet connections get faster and users grow accustomed to online video. By 2013 sales of online video ads in the U.S. are expected to grow to $4.6 billion vs. $587 million last year, says research firm eMarketer.
In November, Internet users in the U.S. watched 12.7 billion videos online, up 34% vs. the year-ago period, says research firm comScore. Advertisers' ability to track whether somebody watched an ad is helping to boost online video ad sales. But a more fundamental issue might be at play, says Thomas Harpointer, chief executive of AIS Media, an Internet marketing and Web services company. "People are lazy," he said. "We all prefer to watch a video rather than read a full page of text — it's just easier."
(for the original article click here)
How Forming A Community Can Help your Restaurant
According to Wikipedia the definition of the term community is still being debated by sociologists. For our purposes, a community is a group of people that are related by a common bond and usually in the same area. From a restaurant marketing perspective the common bond is your restaurant and its proximity to the group. The group is your guests and prospective guests.
There is a lot of buzz in the restaurant business about viral marketing, online marketing, social marketing and all of the great things that can be achieved online. Yes, a lot of the marketing trends are very adaptable to the Internet and the constant resources being developed there. The Internet IS a valuable tool, but should not be the only element of getting new customers and maintaining business at your restaurant. If you rely only on the Internet, you will miss 30% to 40% of your customers and prospective customers. Those are the ones who don’t have computers and the ones who don’t fully embrace the technology.
Your restaurant marketing plan needs to develop what I call your “branded community“. That is a group that is defined by the use and potential use of your restaurant. They reside in an area that a reasonable person would define as your potential marketing area. It could be a 2 mile radius, 3 mile radius or much smaller or greater – but clearly within a distance a guest would be willing to travel on a fairly regular basis to visit. Who are the members of your community? The answer depends on the type of restaurant, demographics and structure of the area you have defined as your marketable community area.
Your restaurant community may include:
residents
businesses
groups and associations
athletic teams
government offices
schools
hotels
The list could go on, but generally can easily be defined by just a quick drive within your community area.
Once you have defined the members of your restaurant’s community, you have to define how you will communicate with them. Commonly, the most recognized method of communication is advertising. However, normal advertising like newspapers, direct mail and even yellow page ads are expensive and not very productive. Can print media advertising be useful? Perhaps, but there are many more productive and less costly ways to get your messages to your community.
With today’s available connectivity through the Internet along with old proven direct one on one marketing, you have numerous options. A few ways to get your restaurant’s message out to the community include:
email
website and/or blog
social websites like youtube, facebook, myspace and others
direct mail
personal visits
flyers
membership in groups and associations
involvement in community events
becoming a source for community information and communication
Your type of restaurant may not be able to utilize all of the above methods, but should use as many as possible to reach your full potential. By looking at a common restaurant business model, we can explore the use of each communication method. The business model we will use is the family restaurant with a hundred or more seats in a suburban market of a major city. This model would encompass all of your community members listed above. Here are some marketing ideas for communicating your message using each of the methods above:
Email – Perhaps the most cost effective and best tool available today is the use of email to keep in touch with your customers. As long as you keep the communication valuable to the recipient, it will drive more business to your restaurant than any other single tool.
Website or Blog – By now the restaurant industry has embraced the assets of having a website. An extension of the website is a blog for your community. The blog is a way to be a central source for events in your area, publicizing your restaurant specials and events, featuring members of your restaurant community and entice new business from people who find it on the Internet or through your advertising the web address in other media. For an example of an effective community blog visit The Sand Key Blog. This blog gets only 50 to 75 unique visitors per day. That is 1500 people a month checking your community blog. What other resource do you have that communicates with that many guests and prospective guests? The goal here is not a lot of “hits”. It is quality visitors keeping up with your “restaurant community”.
Social Websites – Within the last few years the prominence of socializing through huge online chat and video communities has become fairly popular. Populated by a big 18 to 34 year old crowd, these sites can be helpful to reach prospective guests through posting your restaurant information in these digital jungles of worldwide content. While not the highest priority as far as marketing options, you can create your presence and perhaps create some buzz.
Direct Mail – If you can generate, buy or create a mailing list that encompasses a big portion of your restaurant community, use it occasionally to promote special events, offer values or to distribute a newsletter. Direct mail is still effective, but costly. It is another tool that encompasses a portion of your community area that may not be reached any other way. If you choose to use coupons, this is a way to measure effectiveness and new business.
Personal Visits – In all of the fuss about the Internet, media advertising and viral marketing, sometimes we forget the old way restaurants grew before technology became part of our daily lives. There is still no more potent marketing tool than direct personal contact. One restaurateur I know uses daily visits to businesses in his area with food samples. He has a preset package of food samples that keep well. He delivers these to several businesses daily along with menu’s. It is extremely effective, but time consuming and moderately expensive. The results are immediate and long lasting.
Flyers – This low cost method of developing business in your community is effective. A simple half page flyer left on the counter of local businesses such as hardware stores, beauty salons, car washes, barbershops and similar places where residents visit can be a reminder that brings customers in the door more frequently. New comers in the area visit these shops and may get the implication that your restaurant is the community favorite.
Membership in Groups and Associations – Your restaurant is an extension of your personality and the people you associate with. Organizations publish membership lists which become prospective guests. Many groups have meetings at lunch and your restaurant becomes a natural location. Don’t forget these inevitable committees that organizations create to accomplish their goals. Offering your restaurant as a meeting place can boost sales.
Community Events – Events that occur in your area of influence become opportunities for participation to solidify your restaurant’s position as a contributor to the quality of life in the area. A neighborhood wide garage sale is a perfect place to cruise the area with coffee and snacks provided by your restaurant. That church fund raising dinner may include one course from your kitchen. How about Girl Scout cookies from the local troop as a palate refresher as guests leave. Build your involvement to build loyalty and customer counts.
Source for Information and Communication – An earlier paragraph explained how to create a blog for the community. You can also have a designated area in your restaurant for notices, flyers, business cards and announcements that bring your restaurant community together in the restaurant.
Forming your community may take a little planning and thinking, but the results are rewarding. Chain restaurants cannot compete with this conceptual marketing plan. They tend to rely on mass media to communicate with the masses. You can make inroads into customer loyalty and the feeling of belonging the chains could never match. The rewards will be more frequent visits to your establishment and less volatility in times of economic downturn. Once you get the customer in the door, pamper them like they were a guest in your home. The guest will talk about you and your operation to everyone they meet. This is true viral marketing.
There is a lot of buzz in the restaurant business about viral marketing, online marketing, social marketing and all of the great things that can be achieved online. Yes, a lot of the marketing trends are very adaptable to the Internet and the constant resources being developed there. The Internet IS a valuable tool, but should not be the only element of getting new customers and maintaining business at your restaurant. If you rely only on the Internet, you will miss 30% to 40% of your customers and prospective customers. Those are the ones who don’t have computers and the ones who don’t fully embrace the technology.
Your restaurant marketing plan needs to develop what I call your “branded community“. That is a group that is defined by the use and potential use of your restaurant. They reside in an area that a reasonable person would define as your potential marketing area. It could be a 2 mile radius, 3 mile radius or much smaller or greater – but clearly within a distance a guest would be willing to travel on a fairly regular basis to visit. Who are the members of your community? The answer depends on the type of restaurant, demographics and structure of the area you have defined as your marketable community area.
Your restaurant community may include:
residents
businesses
groups and associations
athletic teams
government offices
schools
hotels
The list could go on, but generally can easily be defined by just a quick drive within your community area.
Once you have defined the members of your restaurant’s community, you have to define how you will communicate with them. Commonly, the most recognized method of communication is advertising. However, normal advertising like newspapers, direct mail and even yellow page ads are expensive and not very productive. Can print media advertising be useful? Perhaps, but there are many more productive and less costly ways to get your messages to your community.
With today’s available connectivity through the Internet along with old proven direct one on one marketing, you have numerous options. A few ways to get your restaurant’s message out to the community include:
website and/or blog
social websites like youtube, facebook, myspace and others
direct mail
personal visits
flyers
membership in groups and associations
involvement in community events
becoming a source for community information and communication
Your type of restaurant may not be able to utilize all of the above methods, but should use as many as possible to reach your full potential. By looking at a common restaurant business model, we can explore the use of each communication method. The business model we will use is the family restaurant with a hundred or more seats in a suburban market of a major city. This model would encompass all of your community members listed above. Here are some marketing ideas for communicating your message using each of the methods above:
Email – Perhaps the most cost effective and best tool available today is the use of email to keep in touch with your customers. As long as you keep the communication valuable to the recipient, it will drive more business to your restaurant than any other single tool.
Website or Blog – By now the restaurant industry has embraced the assets of having a website. An extension of the website is a blog for your community. The blog is a way to be a central source for events in your area, publicizing your restaurant specials and events, featuring members of your restaurant community and entice new business from people who find it on the Internet or through your advertising the web address in other media. For an example of an effective community blog visit The Sand Key Blog. This blog gets only 50 to 75 unique visitors per day. That is 1500 people a month checking your community blog. What other resource do you have that communicates with that many guests and prospective guests? The goal here is not a lot of “hits”. It is quality visitors keeping up with your “restaurant community”.
Social Websites – Within the last few years the prominence of socializing through huge online chat and video communities has become fairly popular. Populated by a big 18 to 34 year old crowd, these sites can be helpful to reach prospective guests through posting your restaurant information in these digital jungles of worldwide content. While not the highest priority as far as marketing options, you can create your presence and perhaps create some buzz.
Direct Mail – If you can generate, buy or create a mailing list that encompasses a big portion of your restaurant community, use it occasionally to promote special events, offer values or to distribute a newsletter. Direct mail is still effective, but costly. It is another tool that encompasses a portion of your community area that may not be reached any other way. If you choose to use coupons, this is a way to measure effectiveness and new business.
Personal Visits – In all of the fuss about the Internet, media advertising and viral marketing, sometimes we forget the old way restaurants grew before technology became part of our daily lives. There is still no more potent marketing tool than direct personal contact. One restaurateur I know uses daily visits to businesses in his area with food samples. He has a preset package of food samples that keep well. He delivers these to several businesses daily along with menu’s. It is extremely effective, but time consuming and moderately expensive. The results are immediate and long lasting.
Flyers – This low cost method of developing business in your community is effective. A simple half page flyer left on the counter of local businesses such as hardware stores, beauty salons, car washes, barbershops and similar places where residents visit can be a reminder that brings customers in the door more frequently. New comers in the area visit these shops and may get the implication that your restaurant is the community favorite.
Membership in Groups and Associations – Your restaurant is an extension of your personality and the people you associate with. Organizations publish membership lists which become prospective guests. Many groups have meetings at lunch and your restaurant becomes a natural location. Don’t forget these inevitable committees that organizations create to accomplish their goals. Offering your restaurant as a meeting place can boost sales.
Community Events – Events that occur in your area of influence become opportunities for participation to solidify your restaurant’s position as a contributor to the quality of life in the area. A neighborhood wide garage sale is a perfect place to cruise the area with coffee and snacks provided by your restaurant. That church fund raising dinner may include one course from your kitchen. How about Girl Scout cookies from the local troop as a palate refresher as guests leave. Build your involvement to build loyalty and customer counts.
Source for Information and Communication – An earlier paragraph explained how to create a blog for the community. You can also have a designated area in your restaurant for notices, flyers, business cards and announcements that bring your restaurant community together in the restaurant.
Forming your community may take a little planning and thinking, but the results are rewarding. Chain restaurants cannot compete with this conceptual marketing plan. They tend to rely on mass media to communicate with the masses. You can make inroads into customer loyalty and the feeling of belonging the chains could never match. The rewards will be more frequent visits to your establishment and less volatility in times of economic downturn. Once you get the customer in the door, pamper them like they were a guest in your home. The guest will talk about you and your operation to everyone they meet. This is true viral marketing.
Tax Tips for Independent Restaurateurs
Few restaurant owners find it easy to navigate Internal Revenue Service rules as they apply to their business. Yet an understanding of changes in the tax code may save them money and avoid audits. We asked Lisa Haffer, a lawyer and certified public accountant who works as a tax partner in the Cincinnati office of SS&G Financial Services, for an overview of several new IRS provisions that operators may not be aware of.
“What do owners need to keep abreast of?
Among the areas often missed by restaurants and their CPAs are: tax treatment of smallwares and expansion costs, potential exclusion of tenant-improvement allowances from income, gift-card deferral rules, and five-year depreciable life for most restaurant equipment.
What are the issues regarding gift-card deferrals?
Gift cards are a very hot area with the IRS, and one area tax examiners are likely to focus on when auditing a restaurant company. Restaurant operators may not be aware there are two tax-deferral opportunities for gift-card revenue: a one-year and a two-year deferral of unredeemed gift-card revenue.
But there's a catch, right?
Operators may not be aware of the requirements that must be adhered to for the more generous two-year deferral. For example, the same taxpayer that sells a gift card must be the one who redeems it. So gift-card sales by a franchisee that can be redeemed across the nation at another franchise location may not qualify for the two-year deferral. Using the two-year deferral also requires you to attach a statement to the tax return each year, setting forth the activity in the gift-card liability account.
FICA tax credits are generating interest because of new benefits to operators. Can you explain the advantages?
For years FICA credits could not be used to offset alternative minimum tax. As a result, taxpayers either ended up with a surplus of unused credits that they carried over from year to year, or they simply elected not to claim the credit at all.
What changed?
Effective for credits generated in 2007, FICA credits and the Work Opportunity Tax Credit can be used to offset alternative minimum tax. So credits generated in 2007 and future years are going to be very valuable to restaurants and their owners.
Can you explain the new “bonus” depreciation rules?
Most assets of any business that were placed in service in 2008 qualify for the 50 percent so-called “bonus” depreciation. For restaurants this actually translates into a 60 percent depreciation deduction. If that seems confusing to operators, I advise leaving the math up to their accountants. But restaurant owners should understand that this 60 percent figure is in contrast to 20 percent under the former law.
Are there other IRS issues operators need to be aware of?
They should ask a tax professional about the recent IRS extension of the favorable 15-year depreciable-life provision for leasehold improvements and other restaurant property, which includes buildings. It's a complicated issue.
(to read the original article by David Farkas, go to www.chainleader.com/article/CA6617994.html?industryid=47554)
“What do owners need to keep abreast of?
Among the areas often missed by restaurants and their CPAs are: tax treatment of smallwares and expansion costs, potential exclusion of tenant-improvement allowances from income, gift-card deferral rules, and five-year depreciable life for most restaurant equipment.
What are the issues regarding gift-card deferrals?
Gift cards are a very hot area with the IRS, and one area tax examiners are likely to focus on when auditing a restaurant company. Restaurant operators may not be aware there are two tax-deferral opportunities for gift-card revenue: a one-year and a two-year deferral of unredeemed gift-card revenue.
But there's a catch, right?
Operators may not be aware of the requirements that must be adhered to for the more generous two-year deferral. For example, the same taxpayer that sells a gift card must be the one who redeems it. So gift-card sales by a franchisee that can be redeemed across the nation at another franchise location may not qualify for the two-year deferral. Using the two-year deferral also requires you to attach a statement to the tax return each year, setting forth the activity in the gift-card liability account.
FICA tax credits are generating interest because of new benefits to operators. Can you explain the advantages?
For years FICA credits could not be used to offset alternative minimum tax. As a result, taxpayers either ended up with a surplus of unused credits that they carried over from year to year, or they simply elected not to claim the credit at all.
What changed?
Effective for credits generated in 2007, FICA credits and the Work Opportunity Tax Credit can be used to offset alternative minimum tax. So credits generated in 2007 and future years are going to be very valuable to restaurants and their owners.
Can you explain the new “bonus” depreciation rules?
Most assets of any business that were placed in service in 2008 qualify for the 50 percent so-called “bonus” depreciation. For restaurants this actually translates into a 60 percent depreciation deduction. If that seems confusing to operators, I advise leaving the math up to their accountants. But restaurant owners should understand that this 60 percent figure is in contrast to 20 percent under the former law.
Are there other IRS issues operators need to be aware of?
They should ask a tax professional about the recent IRS extension of the favorable 15-year depreciable-life provision for leasehold improvements and other restaurant property, which includes buildings. It's a complicated issue.
(to read the original article by David Farkas, go to www.chainleader.com/article/CA6617994.html?industryid=47554)
Monday, March 2, 2009
The National Restaurant Association's Industry Forecast for 2009
The National Restaurant Association’s forecast for 2009 projects that while overall restaurant industry sales will increase in current dollars by 2.5 percent over 2008 figures, the numbers translate to an inflation-adjusted decline of 1.0 percent. But this doesn’t have to be your destiny. You don’t have to continue rolling up your sleeves and going to work each day, doing the same things over and over, somehow magically believing and hoping, maybe this year will be different. (Go to http://www.restaurant.org/ to read the original press release)
To get different results you have to do something different. The Travel and Dining Association (TaDa) is here to provide you with a coordinated group of programs to help you market your restaurant and increase your profits. There are only 3 proven ways to increase your profits: attract new customers, increase visits from existing customers, and upselling your existing customers. TaDa has programs to help you excel in each of these areas. Or are you willing to settle for the standard pre-tax profit level in the restaurant industry of 3.8%? Which would equate to just $25,589 in profits on restaurant sales of $673,404.
If you join TaDa, you won’t have to be complacent about low profits any longer. Did you know that the single most cost effective way to increase sales is to personally invite your existing customers back more often? And that other owners who have done so, in combination with using a customer database, direct response marketing and an effective referral program, have increased sales as much as 64% over three years while industry sales were increasing just 3-5% per year. And of course an 18% net profit on a larger sales volume is so much better than a 3.8% of the old smaller sales volume, providing owners over $270,000 in pre-tax profits instead of $25,000. These are the kind of results that change your life and retirement plans.
TaDa will help you implement and automate the processes mentioned above, and has numerous other programs to help you increase your profits. For example, TaDa’s Travel Thru Dining sweepstakes lets you offer your customers the chance to win a trip to anywhere in the world valued at $25,000. TaDa also has a Restaurant Ambassador program which motivates high school students to graduate by rewarding them with a free trip and computer while allowing you to harness the power of community goodwill and make it work for you. Our members also receive professionally written press releases which they can distribute to their local media outlets to garner free advertising for their restaurant.
To get different results you have to do something different. The Travel and Dining Association (TaDa) is here to provide you with a coordinated group of programs to help you market your restaurant and increase your profits. There are only 3 proven ways to increase your profits: attract new customers, increase visits from existing customers, and upselling your existing customers. TaDa has programs to help you excel in each of these areas. Or are you willing to settle for the standard pre-tax profit level in the restaurant industry of 3.8%? Which would equate to just $25,589 in profits on restaurant sales of $673,404.
If you join TaDa, you won’t have to be complacent about low profits any longer. Did you know that the single most cost effective way to increase sales is to personally invite your existing customers back more often? And that other owners who have done so, in combination with using a customer database, direct response marketing and an effective referral program, have increased sales as much as 64% over three years while industry sales were increasing just 3-5% per year. And of course an 18% net profit on a larger sales volume is so much better than a 3.8% of the old smaller sales volume, providing owners over $270,000 in pre-tax profits instead of $25,000. These are the kind of results that change your life and retirement plans.
TaDa will help you implement and automate the processes mentioned above, and has numerous other programs to help you increase your profits. For example, TaDa’s Travel Thru Dining sweepstakes lets you offer your customers the chance to win a trip to anywhere in the world valued at $25,000. TaDa also has a Restaurant Ambassador program which motivates high school students to graduate by rewarding them with a free trip and computer while allowing you to harness the power of community goodwill and make it work for you. Our members also receive professionally written press releases which they can distribute to their local media outlets to garner free advertising for their restaurant.
Help for Independent Restaurant Owners
Welcome to the TaDa Blog! TaDa was created to provide independent restaurant owners with the tools they need to not only to be able to compete against large chains and franchise establishments but also to succeed. If you're an independent restaurant owner or work at an independent restaurant, we hope the information in this blog can help keep you updated about what's going on in the restaurant industry. We're here to give you the best advice and tips on how to market your restaurant, boost your sales, increase your customer base, and most importantly increase your profits. Please share your comments and opinions with us and we'll make sure they get posted.
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