March 13, 2012
Chef’s Corner-Corned Beef & Sauerkraut Burrito
March 15, 2012

Current Restaurant Marketing Tactics Aren’t Working.
2011 will be remembered as the year of the daily deal. Many restaurants continued using traditional marketing tactics, but also have surrendered to the promise of daily deal providers such as Groupon and social media, with Facebook fan pages alone increasing exponentially. However, these traditional tactics and the newer tactics have performed well below expectations in attracting customers. Below is a quick analysis of many of the traditional and newer marketing tactics that restaurants relied on in 2011:

Daily Deals: While most of the customers visiting restaurants are from within a 2-mile radius, daily deal providers such as Groupon typically drive customers from 3-5 miles on average, and these customers never come back once the deal disappears.

TV/Radio Advertising: Expensive to produce, hard to target and impossible to measure; which is not an option for most restaurants.

Local Newspaper Advertising: No longer effective because of declining circulations.

Search Engine Marketing (SEM)/Search Engine Optimization (SEO): Most customers do not discover restaurants via search engines. Plus, SEM/SEO is time-consuming and requires a lot of expertise that most restaurants do not have.

Social Media Marketing: Another approach (e.g. Facebook) that is promising but takes too much time and effort, and difficult to measure Returns on Investment (ROI).

Punch (loyalty) cards: Customers easily lose them and don’t want to carry too many cards. With POS-based punch cards, customers can’t easily tell the score (how far along they are with respect to the reward) adding one more hurdle to their adoption.

Referrals drive customer visits to restaurants
So how can restaurants increase marketing effectiveness and ROI? It is important to first understand three key truths that most restaurants already know about their customers:

Food is social: What was true in the age of cavemen is also true today. People love to talk about food and restaurants, with family & friends. When a menu item or an experience is good or bad, restaurants can be sure that their customers are going to talk about it!

Referrals drive customers: Over 70 percent of the customers walking in to restaurants come because someone they know recommended the place to them. Most restaurants know this but often struggle to find ways of cashing in on this behavior to drive more customers.

Customers are technology savvy: Mobile and social media technologies have grown exponentially, and are being adopted by customers of all ages not just the younger demographic. 

Social loyalty is the right marketing strategy For 2012
A new marketing strategy is required for 2012 – a strategy that empowers consumers to use the technologies that they are already comfortable with (mobile and social media), and allows restaurants to track and reward customers for doing what they already like to do – spread the word about their food/brand and refer their friends, family, and colleagues. We call it Social Loyalty.

Five key secrets of social loyalty: EEARS
A social loyalty solution incorporates the best of natural customer behavior, the best of mobile and social media technologies into a very easy-to-use solution that drives social media ROI. These capabilities include:

Engage: Restaurants should engage their customers with a mobile-phone based loyalty program. Some restaurants create forms or setup kiosks for customers to sign-up for a customer database using emails or phone numbers. With 44% of phone-carrying customers already using a smartphone, the best way of engaging customers is by using location-aware smartphone apps.

Empower: Restaurants need to realize that if 70% of their customers are coming per word-of-mouth, they need to empower their loyal customers to not only write reviews but also to post them on their own social networks like Facebook. Smart phones are social devices and by using smart phone apps, restaurants can empower their customers to write reviews within their premises. A restaurant is an important part of a loyal customer’s life.

Amplify:Smart restaurants can use customer feedback and post them directly on their social media presence to further amplify the word-of-mouth. 

Refer: A restaurant’s loyal customers drive referrals. Restaurants need a way to measure the referrals their customers are generating and reward individual users in order to keep them motivated.

Sustain: Once customers are engaged with a restaurant, restaurants should re-engage these customers by sending them context-specific campaigns like “Hey! Haven’t seen you for 2 months; Please visit again and get an added incentive,” etc. in order to bring them back. 

2012 is going to be the year in which restaurants demand marketing solutions that deliver real results and a substantial ROI; and social loyalty solutions are going to deliver.

Source: 2/15/12

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