The heat is already on for summer seasonal hiring, as quick-serve managers are hiring summer help earlier in the year to have their pick of top-shelf applicants.

Snagajob, a Richmond, Virginia–based hourly employment network, released its annual summer job survey in March. The report found that 23 percent of summer positions will be filled by the end of April, while 79 percent will be filled by the end of May.

Rick Parker, Snagajob’s senior vice president of marketing, says that during the recession, restaurants knew there was a qualified pool of applicants they could tap into at any time. Many waited to hire until they were confident they’d have enough summer business to justify the headcount, he says.

Now, however, with a stronger economy making operators more optimistic for summer traffic, they’re no longer waiting to fill positions.

“They’re hiring earlier this year, and that shows they feel like they have to hire sooner to get quality hires,” Parker says.

Jamba Juice hired early, holding its first National Hiring Day on March 27. The early hiring was a part of the Summer Jobs+ program announced by The White House in January. Summer Jobs+ aims to increase employment opportunities for young people during the summer, and hopes to add 180,000 jobs through public-private partnerships.

After a trip to Washington, D.C., by CEO James White, Jamba Juice signed on to the Summer Jobs+ program and committed to 2,500 jobs. (The company made a summer jobs commitment last year as well, hiring 2,700 for the season.)

The company’s National Hiring Day, held at 80 stores from 2 p.m. to 6 p.m., was its first, and some locations saw lines of applicants 25 people deep. General and district managers interviewed the applicants, says Kathy Wright, vice president of human resources at Jamba Juice, and a select number were selected for a follow-up interview.

“Feedback from our general managers is [that] this was perfect timing,” Wright says of Jamba Juice’s National Hiring Day.

Jamba Juice expects all of its summer hiring to be completed within the next month and a half. The company also expects to go beyond the 2,500 Summer Jobs+ pledge. Wright says the leadership team is very pleased with their hiring outreach. “We would say it was a resounding success,” she says. “The number and quality of the applicants we received was stellar.”

About 23 percent of summer positions will be filled by the end of April, while 79 percent will be filled by the end of May.
Snagajob reported that 10 percent of hiring managers will hire more summer seasonal help this year than they did last year, while 30 percent intend to hire at the same level.

Fazoli’s, the Lexington, Kentucky–based Italian chain, has experienced 20 consecutive months of sales growth. Anticipating a busy summer, the company is looking to increase its staffing by about 500 people for the season, says Dave Craig, vice president of human resources.

“As the recovery continues, business has improved dramatically, so we’re staffing above and beyond what we normally would for the summer,” he says.

Fazoli’s uses a variety of methods to recruit summer staff, Craig says. About 25 percent of hires are found online, with the rest found through more traditional methods, like college campus outreach, in-store recruiting, and open houses.

The majority of Fazoli’s applicants are in their 20s, Craig says, the demographic hardest hit by the recession. This is slightly older than the majority of summer-job applicants, who are mostly high school and college age, a return to the pre-recession norm, according to Snagajob.

“There’s less competition from older, more experienced workers going into the summer market out of desperation,” Parker says. However, the average pay remains about the same as last summer’s, at $10.90 an hour. “The market is a little tighter, but not tight enough they feel they need to pay more.”

Bucking the trend, Fazoli’s is expecting to increase its pay levels. The company’s midpoint compensation is up about 6 percent this year, Craig says. The company also plans to institute referral and sign-on bonuses for staff, anticipating a tighter labor market this season as unemployment eases in some markets.

“We’re going to be adding some more cash compensation to the recruiting process than we’ve had to in the past few years,” Craig says.

A new report released by the National Restaurant Association (NRA) in Washington, D.C., says restaurants have added more than 200,00 new jobs in the past six months. In fact, job growth in the restaurant industry has outpaced the economy, although the industry has yet to hit pre-recession levels.

Hudson Riehle, senior vice president of research for the NRA, says the organization expects 2012 summer jobs to match last year’s more than 400,000 positions, and possibly more.

“The restaurant industry really is a jobs juggernaut,” Riehle says. “There are almost 13 million individuals employed in the industry now … so the industry is an important jobs generator in the national economic infrastructure.”

Of course, all of the new hires could force quick-service and fast-casual operators to dust off their human resources and training skills. Fazoli’s Craig says the company is looking to do some retraining for the operations staff, which hasn’t needed to hire for the last three years.

(Source: By – Danielle Beurteaux, QSRMagazine.com)

While we at the Epicurus Institute don’t believe economic recovery will be felt in the average home by summertime, we do believe that the public will be far less willing to hibernate throughout the year.

For restaurants, this means an increase in business volume, but with strings attached. The days of spending frenzy of 2005 and 2006 are over and gone, probably for several decades to come. The consumer is totally worn out and candidly, frightened to spend lavishly, on themselves or their family or friends.

Restaurateurs, particularly independent operators must adapt and revalue their menus. By this we mean to deflate the expectations of high priced guest checks to more moderate pricing that will be affordable to the average Joe or Jane.

That means toning down the extravagancies of haute cuisine to a much more comfortable level, with nothing on the menu that would scare away a customer worried about their job security.

It also means using unique in-house marketing efforts to retain business and pump up sales. Unfortunately, it also means giving away things like desserts. Even more unfortunately, it means restaurants must make up for lower tickets by building volume and that means shorter seating times. In some sense, you may have to give your guests the bum’s rush to re-fill that seat several times during the evening.

This is not easy to do. But in-house marketing, fortunately can be cheap. A server walking through the dining room with a plate of freshly baked bread or sautéed onions will usually do the trick. Another great one is to give the children a warm, freshly backed chocolate chip cookie; the scent of these items prompting the senses to trigger hunger, which prompts people, by nature, to order just a little more.

There is a seed change taking place in the consumer’s thinking and the profitable restaurateur will understand this change. Essentially, the desire people held for luxury and things “upscale” has come down to Earth, and is now converted, as it was in those post 9/11 months, to one in which consumers seek comfort, security and sound economics.

In the restaurant world, the days of snooty servers who rattle off a list of complex specials and look impolitely down on their guests is over. Today, servers must be much more cordial, gracious and friendly, giving the guest a feeling of being welcomed into the restaurant as if it were a neighbor’s home.

The food, not merely prices and attitudes must change to meet these altered states. Menus must reflect that desire for comfort and ease. Gone are the days of the truffle and back are the days of the mushroom.

The fundamental desire for comfort food does not mean people want food poor in appearance or lacking flavor or creativity. Rather, a balance must be struck that affords a warmth and security, yet is still visually appealing. The fortunate part of this for restaurants is that often the cost of comfort food is far lower than haute cuisine.

But despite a potential period of growth during the summer season, many of our fellow restaurant operators, laden with heavy debt will not make it through the season. The Institute predicts another wave of closures by mid July and again in mid September as restaurants review quarterly and annual reporting. Many, we fear, will have defaulted by that time on mortgages and business loans, unable to meet their debt loads even with improved summer sales.

We strongly advise these restaurants to invest in a meeting with their banker to see if existing debts can be refinanced, provided the accounts are not already in arrears. Many bankers, aware that businesses are struggling at no fault of their own, are still viable, but could default. It may be possible for the bankers to work out a restructuring of the loans.

It is also particularly advisable to switch operations to a largely cash economy. Another difficult process, but one your accountants or consultants should be able to help with in quick time. This means providing discounts to guests for cash payment and paying your bills on a COD basis, whether necessary or not. Converting to cash will prove to your bankers that your business has taken the major, essential steps towards self-sufficiency.

By doing so, you’ll also save greatly on credit card processing costs, which are going up, not down, as the banks and processors are under their own constraints and cost pressures.

As your client base resumes social life this summer, you have to work twice as hard to build their interest in dining in your eatery. This is going to mean innovative marketing efforts in the community. Consider community incentive marketing. For example, you tell your customers that for every $100 spent, you’ll donate $5 to the local health clinic or food bank. While in past it was more socially acceptable to think in terms of the little league or soccer team, today, people are more concerned about social responsibility than sports and fun.

If you donate food to charity, let people know it and invite people to contribute. You might, for example, have a Thursday Canned Food drive. If someone brings in 5 cans of food (not expired), you’ll give them $5 off their guest check of $30 or more, and let it be known the canned food is destined to a local food charity. Do the same thing with clothing on Tuesdays, and on Wednesday afternoons, use your space to create local job fairs, inviting local businesses to set up tables to interview potential candidates for jobs in your neighborhood. You will find your goodwill rewarded with customer goodwill and loyalty.

Tourism activities this summer more so than any year since the 1930’s, will be local, not regional, national or international as in the past as more people learn to enjoy local attractions. We expect far less vacations and many more staycations. But a staycation is an equal tourism opportunity for restaurants. Network your business more than ever before with local tourism attractions, hotels, and organizations and be creative about it. Put up signs that say “Rediscover Your Hometown”. Try creating local tourism packages… like mutual discount offers with cinemas, attractions and even the town hall. Yes, when someone pays their water and sewer bill, let town hall give them a coupon good at your business. Do the same with banks for mortgages and auto dealers.

In towns that usually have an influx of tourists; many locals are accustomed to hiding in season to avoid the crowds. Well, this year, crowds may not happen as they have, but the locals may need a little cajoling to bring them out to enjoy their own community’s features. Use that as a marketing tool.

In other words, while we expect that summer will bring more trade than winter and spring, it will be an uphill battle to maintain your business. We believe it is both sound policy and good economics to try every intelligent and some good old fashioned crazy methods of marketing to build business volume.

As for the future, the media hype about recovery is just that – hype. With more than an estimated 30 Million Americans unemployed or unable to find work, recovery will be a slow process that could take years. The stock markets have effectively scared off young investors for at least a decade. With home values in flux in this deleveraging period, uncertainty will prevail for a few years and restaurateurs must consider that uncertainty as well as the general fear during this economic Depression. If restaurateurs can adapt, not only will they survive, but should do very well.

Remember, it’s cool to be cheap. Work with that in mind and you should prevail and prosper.

(Source: By – Robert Angelone, RestaurantReport.com)

Day In The Life Of A Restaurant Owner

Here is a common scenario on any given weekday at any given restaurant:

The owner is prepping for lunch (to save labor cost, of course). He gets called out of the kitchen for a phone call by one of the wait-staff. It is a telemarketer. He waste five minutes on the phone explaining that he does not need a deluxe emersion blender at the moment.

The bookkeeper spies the owner out of the kitchen and calls him into the back office. She has a question about last night’s paperwork. The owner spends fifteen minutes trying to sort out tips that don’t match their credit card receipts (even though the wait staff should not have been allowed to go home with mismatched paperwork).

Finally the restaurant owner starts back to the kitchen when a local fundraising group arrives, seeking a donation. Who can say no to the Girl Scouts/ Boy Scouts/ Jimmy Fund/ Make a Wish Foundation/ Middle School Track Team? Or any of the other various groups that ask for donations on an almost daily basis. So he takes another ten minutes making out a check and getting a tax deduction form and returning it to the office to the bookkeeper, who has another question about last weeks liquor order.

Meanwhile….Customers are now starting to trickle in for lunch. Because the owner has been dealing with every single item thrown at him, he has not prepped for lunch. Which means when things get busy in the dining room, the kitchen will get backed up and customers will leave unhappy. Get the picture?

As a restaurant owner it is imperative that you learn to JUST SAY NO! No, I can’t help you with that at this moment. No, I can’t take a call right now. No, you will have to wait a few minutes.

Take Steps To Avoid Common Restaurant Owner Pitfalls

So, how could this restaurant owner keep his customers happy and still manage his business? With these simple steps:

1. Learn to delegate tasks to others (like the staff he hired).
2. Learn to prioritize tasks.
3. Have clear guidelines that all staff is expected to follow.

Let’s take a look at that scenario one more time, avoiding the pitfalls of the other day.

In the kitchen the Prep Cook is doing the lunch prep. Of course this means the restaurant owner is paying the cook. But sometimes it is more cost efficient to pay someone else than try to do it yourself. All the prep cook has to do is prep and get ready for lunch. He won’t be dashing in and out of the kitchen for phone calls and impromptu meetings. Lunch will be ready to go when customers arrive.

Telemarketers continue to call, almost hourly during the workday. But the restaurant owner doesn’t have to deal with them, because of the policy that wait staff should just take a message.

The restaurant owner reviewed the paperwork policy with the staff, including the night manager and bartender, who collect the server’s money and credit card receipts at the end of the night. No one is to be dismissed until their paperwork matches 100%.  Now the restaurant owner doesn’t have to pay his bookkeeper to try and figure out the paperwork, nor does he have to waste time doing it as well. And all the other questions the bookkeeper has? She knows that the restaurant owner will meet with her each day at 2:00 pm (after the lunch rush) to go over them. Now she can also be more productive, since she won’t be chasing her boss all over the place.

Remember the fundraising group? Thanks to a new policy, there is a standard amount for the first ten groups who ask for a donation every month. Each group gets $20.00. Once the $200 mark is met, that is it for that month. Groups are asked to return the next month, if they would like a donation. The wait staff can track any donations and receipts right in a handy binder next to the cash register or POS system.

So there you have it. Simple steps to becoming a more productive restaurant owner. Hang up your cape and learn to delegate, prioritize and organize instead.

(Source: By Lorri Mealey, About.com Guide)

Increase Restaurant Cash Flow
Obviously, the best way to increase a restaurant’s cash flow is to increase sales. This is much easier said than done, especially during the current recession. However, that doesn’t mean increasing a restaurants cash flow is impossible. You can ramp up your advertising with little to no money, using social media sites like Facebook or Twitter. You can run various restaurant promotions, like two-for-one dinner nights or early bird specials to lure in budget-conscious patrons. When sales are slow, it is not the time to slash our advertising budget. Sometimes you need to spend some money (albeit, not very much money) to make some money.

Consider Taking Out a Restaurant Business Loan
A short-term business loan can help keep your restaurant in the black until business resumes. However, if traditional bank financing isn’t an option some small businesses turn to online lending companies that offer small business loans in the form of cash advances. Often called a merchant cash advance, these companies let businesses borrow against future credit card sales. They typically have much higher fees than a traditional bank. For example if you want to borrow say $50,000 you could end up paying back as much as $65,000 over six months. Varying amounts based on volume are taken out of your daily credit card receipts to repay the advance which can cut into your daily cash flow. While it is tempting to take a cash advance for your restaurant, be careful that you aren’t miring your business deeper in debt.

Decrease Restaurant Overhead
If you find that your restaurant sales are not covering your expenses, it’s a good time to start trimming fat from inventory, payroll and other areas. Analyze your menu usage and see if there are items that aren’t selling. By decreasing your menu you can limit the amount of inventory you need to order each wee. Also cross utilizing menu items  helps reduce waste and save money.

Be proactive about asking for help. If you know, you are going to have a hard time making the month’s mortgage payment, call your bank and ask for an extension. They do not want you to go out of business. They may extend your deadline or even restructure your loan, to help you make ends meet.

If certain days of the week are slow, like Monday dinners or Tuesday lunches, reduce the number of staff working – both on the floor and in the kitchen. Now is a good time for the restaurant manager or owner to work some overtime (that’s why you keep them on salary and not hourly).

(Source: By Lorri Mealey, About.com Guide)

Restaurants added a net 230,000 jobs during 2011, their strongest performance since 2006. In addition, the restaurant industry finished the year only 20,000 jobs shy of fully adding back the 366,000 jobs lost during the recession. Complete recovery is expected in early 2012.

In comparison, the overall economy added a net 1.6 million jobs during 2011, which also represented the strongest gain since 2006. However, the economy has added a total of only 2.7 million jobs since the recovery began, or roughly 30 percent of the nearly 8.8 million jobs shed during the recession. Even factoring in stronger growth in the years ahead, the nation will likely not be back to its pre-recession employment level until 2014.

Looking ahead to 2012, job growth in the restaurant industry is projected to remain healthy. The National Restaurant Association expects restaurants to add jobs at a 2.3-percent rate in 2012, a full percentage-point above the projected 1.3-percent gain in total U.S. employment.

The projected 2012 gain will represent the 13th consecutive year in which restaurant industry job growth outpaces the overall economy, which will continue to provide a much-needed stimulus in a challenging economic environment.

Source: kyra.org; February 2012

According to the 2012 Restaurant Industry Forecast, approximately half of restaurant operators questioned said getting credit and/or financing was more difficult in 2011 than it was in 2010. Conversely, one out of 10 said it was less challenging.

“It is getting better,” said Hudson Riehle, senior vice president of the NRA’s Research and Knowledge Group, “but growing a restaurant operation is intrinsically dependent on the ability to obtain financing. That said, after being in the fifth year of economic weakness, options have improved somewhat, but they still are not what they were before the onset of the recession in 2007. Consequently, operators do still report challenges in obtaining necessary financing.”

The report determined that single-unit and multiunit franchisees experienced more credit and financing roadblocks than independent restaurateurs did. Comparatively, less than half of independent operators reported similar difficulties.

The study further found that operators in the quick-service and fast-casual segments of the industry reported the most difficulties in trying to access capital. Nearly six out of 10 respondents said financing was harder to come by in 2011 than in 2010.

In a segment-by-segment breakdown, 53 percent of family-dining operators said accessing capital was harder in 2011 than in 2010, while 46 percent of casual-dining and 41 percent of fine-dining restaurateurs reported similar findings.

Source: National Restaurant Association; by Elissa Elan, February 23, 2012

2. Invite local businesspeople to your restaurant as a guest. They may bring much repeat business.
“I bring them to the restaurant and they like what they see, they like the food, and they come back, then they pay, naturally,” Silverberg says.

3. Don’t be afraid to make cold calls. They can attract local businesses to dine with you.
“I ask myself what’s the worst thing that could happen. If someone says no, they’re not turning me down, they’re turning down the idea,” Silverberg says.

4. Get creative. Think about how you can market your business without spending a fortune.
“There’s not a lot of extra money out there to spend on marketing, so you have to be creative,” says Kenny Moore, founder and president of Andy’s Burgers, Shakes & Fries.

5. Use coupons. These should have a limited period of use to draw back repeat business.
“The coupon might bring them back in sooner if they only come in once a month. We usually give them seven to nine days to use the coupon,” says Lenka Keston, director of marketing and business development for Silvergreens.

6. Never overlook social media as a free marketing tool.
“Traditional advertising can be incredibly expensive, so social media can be very appealing to restaurants because it’s free,” says Jeremy Gregg, executive director of The Plan Fund.

7. Let your customers know you’re on Facebook or Twitter. Also encourage them to “like” your restaurant.

8. Respond to any online complaints quickly. They can be an easy marketing opportunity.
“If our customers feel strongly enough to post about something we did (or didn’t) do, we feel we need to take that seriously and respond with a sense of urgency,” says Neal Dennis, COO of Andy’s Burgers, Shakes & Fries.

9. Run competitions on social media. You can then use the results as free marketing collateral.
“This helps consumers feel connected to your restaurant,” Gregg says.

10. Market to your current customers.
“The No. 1 best way to build your business is to build repeat business,” Gregg asserts. “This means differentiating yourself on food quality, ambience and customer service. Price is the least important because all of your competitors are likely around the same price point.”

(Source: rmgtmagazine.com; Amanda Baltazar; January 2012)

“If you overspend, the chance of failure only rises,” Beef ‘O’ Brady’s CEO Chris Elliott notes.

2. Embrace patience and a long-term outlook. Since opening Another Broken Egg Café in 1996, founder Ron Green has received regular calls about expanding the concept. He long resisted the temptation to “sell, sell, sell” and only added what his system could handle. As a result, Green never assumed more financial risk than necessary and never spread his corporate staff so thin they couldn’t execute.

“So many concepts seek growth before they have their feet under them, which can create lower revenues and greater expenses,” Green says.

3. Screen partners. From investors to prospective franchisees, Green has made it a practice to exhaustively screen all prospective partners. With franchisees, he assesses their ability to run an efficient, effective, and profitable establishment, while he examines if investors can stomach his patient approach.

“If you’re not doing your due diligence up front and have someone pull out down the line, you can be left with some costly troubles,” Green says.

4. Step back. Operations expert Anna Eddy suggests all in-house leaders occasionally step away for one shift to observe gaps in service and inefficiencies, such as seating new guests, delivering drinks, or producing all dish components in the kitchen at the same time.

“Close these gaps and you’ll have better service, more fluid shifts, improved revenue, and reduced costs,” she says.

5. Train and train well. Before opening a new Another Broken Egg Café, franchisees receive six weeks of training at the company’s headquarters in addition to another 3-4 weeks at the new store. Green knows installing comprehensive and thorough training for operators as well as frontline staff is critical to the company’s sustainability.

“The restaurants that fail are those that aren’t managed or trained properly,” Green says. “We make sure our stores know how to execute.”

6. Rightsize the operation. Upon his arrival as CEO, Kerry Kramp pushed leaders throughout the Sizzler system to examine spending and efficiency. His team analyzed guest traffic rates to better manage production, purchasing, inventory levels, and staffing. They investigated areas where technology might offset manpower and analyzed the elements that might be outsourced as well as what could or should be accomplished in-house.

“If you’re not digging down deep into these performance metrics and getting everything in line, then you can do some serious damage to the business,” Kramp says.

7. Bring back barter. A centuries-old practice, barter has been reborn in the recession era as restaurants look to keep cash on hand and attract new customers.

Barter exchanges, both local and national (the publicly traded International Monetary Systems, for instance, is the nation’s largest), allow restaurants to accept “barter dollars” from registered barter partners on the full cost of meals. Earned on the restaurant’s wholesale dollar, that barter currency can later be redeemed for any number of products and services from advertising to plumbing.

8. Spend money, make money. At Grub, co-owners Denise DeCarlo and Betty Fraser take advantage of credit card companies’ cash-back and incentive programs, returning thousands of dollars to the business each year. In many cases, points can be multiplied on select purchases.

9. Make repairs in-house. Whenever possible, DeCarlo and Fraser have employees make repairs to their operation’s early 20th Century bungalow, a measure to offset hefty contractor fees. In fact, the co-owners have even adopted a regular practice of hiring people with “handyman” skills in addition to restaurant experience.

“We’ve had a couple of waiters who could have walked out of Grub right on to the site of Extreme Home Makeover,” Fraser says.

10. Have an energy audit. Given rising energy costs, many operations are turning to energy audits. Courtesy of business assistance from Urban Solutions, a nonprofit economic development agency, Miss Saigon Restaurant received an environmental audit and consulting. As a result of the audit and implementation, the San Francisco restaurant is reaping annual savings of $5,000 on energy, more than $6,000 in water, and another $6,000 in waste pickup.

(Source: rmgtmagazine.com; Daniel P. Smith; January 2012)

Employee theft is a $11 billion problem in the U.S. and accounts for 4 percent of restaurant sales according to the National Restaurant Association, but it need not be, says Dan Smith, CEO of BevIntel, a beverage auditing service in Louisville, Kentucky.

Alcohol is typically stolen through three methods, he says—deliberate theft, spillage and overpouring.

“It’s a combination of all three that’s hurting restaurants,” he explains. “Employees often don’t realize that giving a drink to a friend or pouring someone more so they get a better tip, really is stealing.”

So what can you do to ensure your restaurant isn’t losing money through your drinks program? Smith offers these tips:

• Communicate with your employees and make them understand how you make money in a restaurant. Let them know what your expectations are.
• It’s an important part of any restaurant to comp frequent guests, but make sure it’s only on occasion. It’s important to keep it controlled. Have employees write down any comped drinks with a brief explanation.
• Allow employees to give away a certain number of free drinks but they should not exceed that number. And give them guidelines (preferably written) about giving away freebies.
• Spillage is especially a problem in busy restaurants, and becomes even more so during holiday season when there are a number of parties. Make sure your bar is set up correctly so that in a rush nothing is missing. It’s about being organized, being disciplined.
• Use jiggers to control the pours for cocktails—especially for holiday parties. Control spouts can also be added to liqueur and wine bottles but can be frowned upon in fine dining restaurants whose owners often think they cheapen the experience for the guest.
• Let your staff know what your disciplinary actions are in case you catch an employee walking out with a bottle of alcohol in his or her bag.
• Detail all your expectations in an employee manual and have employees sign off to show they’ve received it.
• Teach employees not to empty bottles of wine or liqueur into a customer’s glass even if there’s only a little there. It all adds up.
• Draft beers should never be topped off.
• Point out to employees that if they “steal” it hurts the restaurant. This could lead to it going out of business and then they won’t have a job at all.

Source: Restaurant Management Magazine, By Amanda Baltazar, December 2011

Problem: Increasing sales through customer acquisition is the most expensive and least productive method for driving profits. It is a restaurant’s own customers who are more likely to visit and spend money, yet most owners expend 90% or more of their marketing dollars in an effort to drive “new” traffic, which in most cases represents less than 10% of a restaurants growth opportunity.

Solution: Significant sales increases are more easily obtained through staying top of mind with current customers and giving them frequent reasons to return.

Example: A customer visits your restaurant twice a month. They are continually influenced by other advertising and offers, so they are dining in other restaurants as well. Imagine if you had a way to reach out and provide them with continual and repeated reasons to visit and spend money with you. Just one more visit per month is a 50% spending increase from that customer.

MISTAKE #2: Using The Wrong Media

Problem: Yesterday’s mass advertising media are in complete free-fall. They are no longer delivering the eyeballs they used to. The world has moved to the web.

FACT: Post Office losses are accelerating due to declining volume

FACT: The top 25 newspapers are hemorrhaging money

FACT: Radio has its lowest audience since Arbitron started keeping statistics

FACT: Today’s 18-34-year-old customer prefers email to direct mail.

Despite the fact that mass advertising is increasingly irrelevant and terribly expensive… the most dangerous aspect, is that it doesn’t work at all – unless it is discount driven. And since your offer is piled in with competitor’s offers – the bigger discount wins.

Solution: Building your own database of customers allows you to connect directly with them inexpensively… with offers designed to encourage a visit – without competing with competitor’s ads and offers.

MISTAKE #3: Suicidal Offers

Problem: Discounts have become the crack cocaine of restaurant marketing. And like any drug, it requires more and more to get any response at all. And, as we’ve just seen – the nature of the mass-advertising beast – is that the steepest discount wins.

Discounts hurt you in five ways:

1. They make the restaurant appear desperate
2. They reposition the restaurant as a low-end operation
3. They attract bargain hunting “junk traffic”
4. They murder sales and profits
5. They train customers to “wait” for the deal

Solution: Discounts should be used sparingly, and only for driving new traffic. Customers brought in from discounts should be immediately enrolled in a customer data base or rewards program for follow-up marketing.

MISTAKE #4: Reach & Frequency

Problem: Restaurant owners (especially independents) do not have the deep pockets to sustain an extended marketing campaign. They advertise when the budget allows or on an occasional basis in reaction to slowing sales. This leads to a downward spiral of boom and bust marketing.

FACT: Consumers buy, when they are ready to buy… not when a business owner decides to advertise.

FACT: On any particular day only 3% of your marketplace is ready to spend money with you. That explains mass-advertising’s dismal response rates.

FACT: Continual repetition is required to attract new prospects – and more importantly, it is needed to prevent customer erosion from competitor advertising.

Most owners over reach with too little frequency… this squanders marketing dollars because they only reach a tiny fraction of those ready to buy now.

Solution: Narrow the reach and increase the frequency. Rather than advertise to 10,000 people once a month, you’re better off reaching a zone of 2,500 people 4 times during the month. That insures that you are in front of all 2,500 at or near their dining cycle.

IMPORTANT: Enroll these people in your rewards program and then move on to the next zone. You must reach those most likely to buy from you – with enough frequency to instill a habit. Then, you must maintain that frequency (a rewards program does this automatically) – to prevent competitors from influencing YOUR customers.

MISTAKE #5: Obsessive Acquisition – Negligent Retention

Problem: Operators today, continue to pour most of their marketing dollars into expensive acquisition… yet, do little or nothing to nurture the relationship with those who are attracted to the restaurant. This traps owners in a vicious… Spend, Acquire, Lose Syndrome…

As a result many owners become frustrated at the “ineffectiveness” of marketing and cut back. This of course leads to slowing sales. Owners react by launching some form of discount offers in an effort to prop up sales. And the downward spiral begins…

Solution: You’ll never fill a bathtub without a stopper in the drain. And the same principle applies to marketing. Discounts should be used sparingly to drive new traffic. When new prospects arrive, immediately invite them to join your rewards program. This allows you to build a protective wall around your customers and keep them from being drawn away by competitors.

FACT: 7 out 10 new prospects will not return to your restaurant without a follow-up offer.

Summary: Mass advertising is “expensive.” Rewards marketing is “inexpensive.” Discounts train customers to “wait.” Rewards motivate increased “spending.” Reallocate part of your marketing budget to a rewards program that gives your customers continual and repeated reasons to visit, keeps you “top of mind” – locks in loyalty, encourages increased spending, and runs on auto-pilot. It worked for my restaurant, it works for our clients…it will work for you too.

(Source: RunningRestaurants.com; Kamron Karrington; November 2011)