Have you been wanting to jump on the bandwagon and participate in daily deal websites? This new craze has caught the attention of many small businesses and has contributed to the success of independent businesses, but you may be wondering how have they been able to still profit when using these websites and why others fail at it.
The four important points below will help you to win at this new marketing game:
1. Negotiate hard- the Split. The key to using these daily deal websites is to negotiate. Take the leader in daily deal offers, Groupon, for example. Traditionally Groupon offers a 50/50 split, meaning that the restaurant keeps 50% of the sales from the promotion and 50% is given to Groupon for its services. This does not include processing fees of about 2.5%, which your restaurant pays.
So how is it that recent deals with Groupon have been obtaining an 80/20 split that allows restaurants to receive a larger portion of revenue per promotion? Many critics believe that the leader in this daily deal phenomenon is now feeling the heat from its many competitors. It is suspected that Groupon’s new negotiating tactic is an attempt to grab hold of new markets in order to grab marketshare away from new competitors such as Google, Facebook, Amazon, Living Social and hundreds of locally focused deal a day sites.
Another possibility implies that Groupon implemented an 80/20 deal because its competition is eating into its margins. If this theory is true, how long can Groupon continue to offer restaurants a larger portion of the pie without repercussions? So stand your ground and negotiate, you have nothing to lose. There are so many of these daily deal guys waiting to do business with you. Your phone will not stop ringing.
2. Ask for customer data. Like any small independent operation, the economy has hit hard at home and consumers are watching their budget. When you opt to participate in any daily deal website program, always request customer data. Things like email addresses, names, or zip codes at the least. The reason you are giving out a lot of your profit is to acquire new customers (at least that is what you are promised). Once you get customer information, you can add them to your e-mail newsletter and also can invite them for their birthdays or even to join your restaurant’s VIP club. Don’t expect all of them to convert, but some will. This is a big win for you business.
3. Put a limitation on days to use voucher. Don’t be swayed by a good sales pitch, negotiate the days your offer can be used. Make sure the restrictions states that the voucher can be used on days you are not busy. For instance; slow day like Mondays, Tuesdays and Wednesdays. No Fridays or Saturdays, you are always busy on these days. Make sure also that a gratuity and taxes clause is added to enable you to tag on your 18 or so percentage at the restaurant. These little things help you to get your profit back.
4. Calibrate your offer below your average ticket per person. It is important to look closely at what makes sense for you and not what the sales person wants. For example, if your average ticket per person is $10.00 don’t go ahead and do a “$40.00 worth of food and drinks for $20.00.” You will lose your shirt or skirt this way. A restaurant whose average is $10.00 should look to do $10.00 for $5.00. At the end you can pocket much more and still get your food cost back for acquiring that new prospective customer.
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The experts are now saying that the U.S. economy had some substantial amount of economic depression. As if we already don’t all know this or experience it in our businesses. These so called experts are also now saying the economy is getting better. Duh. We know that one also. More people are eating out. Things are getting better. Well not that much. We know we have to do something to bring people back and get more people in. When I say more people in, I am not talking about Groupon. While there are many marketing ideas out there to implement, independent operators as I know are not interested in promises. They want results. But good sales guys have sold operators pet rocks with no results and you are tired of the run around.
So what does an operator do in 2011, when many competitors have lost close to 30% of their revenue or even closed down in the last two years or so?
1. Your service has to be top notch: Once the experience is great, people will still love coming back. But if your service is alright but not great, no matter how much marketing you invest in, people they will not stay.
2. Use every opportunity to collect customer data: I mean invest in touch point simple technologies, like e-mail, text messages, social media marketing and post card. These tools deliver when used with the right tactic and frequency. In 2011, you are in the business of experience and customer data. YOU MUST HAVE BASIC DEMOGRAPHIC information about your customers. Who are they? When during the day do you see business people, older adults, teens. You already know they like to eat and what each group loves in your restaurant. Do you have a sales goal for 2011? Which part of your business are you looking to grow? Take out, lunch business or dinner?
4. Invest in DIY: As an operator, you don’t have a marketing department or have money to throw around to pet rock sales guys. Stop spending $850.00 to send coupons in Valpak, Money Mailer, Coupon envelope to 100,000 homes and getting less than 100 of the coupon prints back. Do the math, what is your return on investment (R0I), it is 0.01 %. Not even 1%. Think about that. I know you were use to these types of marketing back in 1999, but this is 2011. Things have changed and human needs has also increased. It is no longer valid to have a great restaurant in a great location with great food and service. You need to retool and have an integrated approach. Don’t spend all your marketing dollars in one program spread it around and put more money in the one that deliver the best result.
You need to invest in simple yet effective tools that can help you keep anyone who comes to your restaurant back and also get new ones. Eighty percent of your customers are repeat business and twenty are new customers. The more you bring in the old, the more money you make. Here are some marketing tools to use:
1. E-mail marketing- more info
2. Social media marketing - more info
3. Text message - more info
4. Birthday post card; Expensive but can be replaced with a good e-mail program. Not constant contact. But one that allows you to send automatic e-mails to your customers on their birthday or anniversary. You have to be strategic.
Stop doing the same things of last year. No wonder why you keep getting the same result. Sorry if my tone is a little hard, I am just tired of people telling operators what they them selves know does not deliver result but keep telling you to buy it anyway. You have been sold a pet rock!!
Try and get these things as a packaged offering if you can, for effectiveness and good time management. If you do these things, you will surely win in 2011.
For more information about how to fully utilize marketing tools for your business visit Dining Dialog’s website and learn how we can help increase the foot traffic to your restaurant.
How to remove negative reviews and bad reviews on yelp series
By the way, welcome to our new local restaurant marketing blog. You will find the best how-to information to use for your restaurant, bar and business here. Lot’s of good information for independent operators and small chains. Enjoy this first post.
At the beginning of this year, I went around many of our clients to ask them how we might be able to help their restaurant grow and increase their sales in 2011. To my amazement, apart from slow revenue, economic issues and the urge to do Groupon, the number one issue that is keeping many operators unhappy and helpless is the issue of online reviews about their restaurant.
What is sad about this is that many owners feel helpless and do not know what to do about this issue. I don’t know about you but if your entire business depends on what others feel and say about you and your business, you will take it personal. That is what I realized with many owners, they take every comment personal. How about restaurant operators who can care less about online reviews. Well, that approach is not the right one though. People can write what they like as long as it does not affect their business they say. Yea right!! As business owners, I know it is completely impossible to satisfy every customer’s need. Every positive comment mentioned or posted on the internet affects your business for good and every negative comment can damage your reputation and business. As the old adage goes, a happy customer tells one friend, an unhappy customer tells ten. Eighty four percent (84%) of consumers will check online for reviews before making a purchase. Especially the outgoing crowd 25-45 year old who are tech savvy and use smart phones. People are constantly checking yelp and others to see what other people have written about you in order to make a decision whether to spend their money at your restaurant or not.
Alright ! I can hear people reading this article and saying to themselves, I know I have to pay attention to my reviews but how do I start and what do I need to do about it. Let’s look at some ways not to be found on line.
1. Don’t be found without having full access to your review accounts online.
The number one sin operators commit is not creating or having access to their restaurant online profiles on social review websites. You see, all these websites; Yelp.com, Urbanspoon.com, City search, Google reviews ( the 4 most important ones ) has a simple link for you to click on to secure your restaurant name and own the profile and information. You need to simply sign up and update your information on these websites and keep the information in a safe place. Make sure that you know how to login and respond to queries and comments. If you delegate this task to an employee, make sure you have the username and password. Also the user name and password should be in your name. Never use an employee’s e-mail address to set up the account. If you set up an account with an employee’s e-mail address, when that employee no longer work for you, you just lost everything.
2. Don’t be found without positive reviews from your happy customers.
Reminding your happy customers to write positive reviews is an important aspect of your business in this digital age. You see, 7 years ago, you don’t have to bother about someone going to some website and sticking it to you. Today, many consumers are doing this because they know they can and you really can do little or nothing about it. Even a former employee who you let go will go online to yelp or rant about your business. While you know what they are saying is wrong and untrue. You can bury that negative comments by simply asking your happy customers to kindly write positive reviews about your restaurant. The reason this is not just necessary in helping you rank well, the positive reviews push the bad reviews down. The more positive reviews you get the better people look at your establishment favorably and like to visit. For example if you have 3 bad reviews last year and 22 positive reviews this year, consumers will look at you favorably than having 6 bad reviews and 9 good reviews.
3. Don’t be found not responding to comments or replying reviewers
Once you have searched for your restaurant on social review websites, claimed and updated your profile. You now can respond to a bad comment or thank someone who wrote a good comment. On Yelp.com for instance, you can publicly respond to a comment or privately respond to the person who wrote the comment. Even though you do not agree with the negative comment because you know it is a mis-representation of what happened. You have to be careful not to relay your anger to consumers. Don’t call anyone names or use profanity. Be respectful. You can respond directly to the person. And when you do, ask them if they would be kind to discuss the matter over the phone with you the owner. If it’s something you can correct or need to correct, ask them to come back and you will give them a 25 % discount on their food or something. When this person shows up, you can approach them to again kindly rewrite their review. You see, what you are doing is turning the negative situation to a positive one.
4. Don’t be found not present on review websites mobile apps
In the United States , we have over 300 million cell phones and many people are using their phones instead of their computers. Since the iphone was launched few years ago, over 65% of cell phone users are now smart phone users. From Blackberries to Gooogle Android phones. Almost all the social review websites all have a mobile application where people depending on their location can find the nearest restaurant, post reviews and comments about your business. If your restaurant is not on these mobile apps, you are losing out to your competition. The more positive reviews and stars you have the more you will rank as one of the top favorite places to visit. You don’t have to pay anything or go ahead and hire someone to build a mobile application for you in order to achieve this mobile status. You can achieve this by simply having positive reviews than negative ones.
As you can tell, it is important for you to maintain and manage your reputation online. The future of your business in this digital and mobile age depends on it. Take hold of your reputation and control your business online.
Written by Ola. Ayeni, Chief Idea Officer, Dining Dialog - Full service restaurant marketing company and Icare partner of Sysco Foods, based in Naperville, Illinois. www.diningdialog.com, e-mail: firstname.lastname@example.org, 1.888.424.9666. He brings fresh and creative ideas to his clients, speaking at national and industry trade events about mobile marketing, new media and social network marketing. Ola also writes for industry publications, and has been published and quoted in Loyalty Magazine, American Express Smartbrief, The Food Channel, Internet Retailer, Quick Service Restaurant Web (QSRweb.com), My Food Service News, SmallBeeBiz.com, Food and Beverage Underground, Website Magazine, Mashable, Chicago Tribune, Newsweek Magazine, Screen works, ReadWrite Web, Restaurant Report, Mobile Marketing Magazine, and quoted by many respected publications including CPG Matters and Coupon Info Now.