Michael J. Rasmussen

How many of you have experienced this scenario? Business has been slowing down over the summer and your financial partner tells you to search out various marketing programs that should be tried to attract new customers. You grumble gruffly under your breath, "I make Pizzas not find customers." What does he think? I have a marketing degree?

Coincidentally, that next moment you get a solicitation to have your restaurant listed on the back of a register tape at a prominent local grocery store. The sales person has a month-end closeout deal where you can receive double the exposure for an additional $100. You do not counsel with your financial partner or check the salesperson's references, nor did you figure a way to measure results to determine if it worked. But you had to hurry and make a decision so you did it. Sound familiar?

Over the next two months, you start over five other programs including coupons with local papers, radio, printed menus, and, of course, the infamous "Val-Pak" type program. Again, no budget or counseling with your financial partner, no system to measure results, no tracking of coupons redeemed, but business did spike over the summer. Then you have a life-changing meeting with your financial partner.

You clean the restaurant, ensure a proper physical inventory is taken, and make sure you have the prior years plan available to review. This past summers' sales beat the prior year, and it appears all of the marketing efforts paid off. You are excited and feel well prepared. Then you meet.

You start the meeting reviewing operating results, employee turnover, and the usual restaurant operational talk. Then your financial partner asks for all of your marketing data, programs used, costs and results. You sink fast in your chair, lower your head, and honestly tell him that you have nothing. You have the amounts spent on the various programs, mostly, but cannot tell him where the results came from and which program worked or why. Your lesson in marketing and measurement is about to begin.

Many times, operators spend money on several ideas and sales go up, but in many cases, only half of them work. If proper tracking is in place, you can potentially save thousands of dollars in wasted marketing, so let's look at some of the basics of tracing and measuring marketing.

Rule #1:

Marketing without measurement is waste. Marketing with measurement is Return on Investment (ROI). Marketing is a science, not an art. Test. Measure. Results. Test. Measure. Results.

  • Spend the time to clearly determine how you will measure the costs of the proposed marketing program including an allocation for indirect overhead associated with the program such as company labor and other fixed resources.
  • Interview other restaurateurs who have implemented the identical or a similar marketing program and question their process and results to increase your chance of obtaining similar results.
  • Develop a budget and stick to it. Additional costs always creep into a marketing program once adopted due to unforeseen circumstances.

I remember sleeping through Marketing 101 in college and somehow remembering how important it was to measure the results from any marketing program.

Rule #2:

All Marketing programs should be measurable.

  • Adopt a company rule that enforces compliance with measuring all programs.
  • Provide time separate from marketing where you can review and account for the results of any marketing program.
  • Establish a communication channel to report results to management and staff. Manage expectations and explain deviations from expected results.

Rule #3:

Create consistent marketing measurement tools. Company vision is impaired from inaccurate data.

  • A simple measurement tool for any marketing program is the impact on sales revenue period to period. Build this reporting capability into your financial statements.
  • Ensure results are included in management reports and the data is accurately reported. Monitor closely that data has not changed and company decisions are utilizing accurate data.
  • Retain all data and results from each marketing program. Consider developing a history of programs attempted with documented results. Build a library of marketing programs to streamline future attempts at new ideas.

Once you have a reporting tool to measure the results of each specific program, you can determine what works and what doesn't. Having a history of when you did a promotion, coupon or other idea, and how much you spent and how it affected your bottom line will help build a toolbox of easily accessible weapons to boost sales.

Rule #4:

Learn from the experts. Counseling with your advisory team provides valuable experience and knowledge.

  • Ask the experts. Don't let pride get in the way of asking an associate restaurateur or getting online with www.pmq.com. Ask others who may have attempted a similar program.
  • Don't be afraid to fail. Do your research. Take each program on with passion. Be willing to be fully accountable to management, and report results and accept responsibility both for successes and failures.
  • Create a company culture which promotes new marketing ideas and programs. Create a rewards program to employees who can be your best spokespeople for your restaurant. Money talks to employees. Reward them for referrals.

Sometimes your best marketing tool is knowledge. Many of you are business owners, entrepreneurs and pizza makers, not marketing experts. Ask for help and listen to the experts. Never overlook some of the best marketing you already have: your employees. If you create reward programs where they can earn bonuses, prizes or benefits, they will become your marketing department.

Rule #5:

Creating and retaining customers is the pulse of your restaurant. Treat your marketing programs as you do your heart: tracking, measuring and monitoring. We only have one heart in life. Give it priority in your business.

  • Whether you're an independent not desiring to expand or part of a national franchise, building your restaurant brand will occur through effective marketing and consistent promotion in the marketplace.
  • Your restaurant value is directly related to your attention on building your brand. Customer service, food quality and reputation all build the brand.
  • Retaining marketing results and narrowing down the expected resources required to increase and retain customer base builds a sustainable competitive advantage creating a barrier to entry in your immediate marketplace. Remember a quote from Big Dave Ostrander: "Your number one asset in your restaurant is your customer list. Be diligent in measuring your marketing programs. Create simple and painless procedures to build and retain your list."

In summary, you probably have as many good ideas you are spending time and money on as you have bad ideas. Start tracking each promotion, measure the results and decide where the smart money is being spent. Eliminate what doesn't work and redirect that time and money into developing new and better ideas and keep a history of these ideas. When business is off, refer to your toolbox of successful ideas and start kicking your competitors' butts.