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)