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)

At the low end of the gift spectrum are things like concert and sports tickets or a ham or turkey around the holidays. However, there are also situations where chefs and managers receive items of much higher value like exotic vacations, high-end merchandise and even cash in return for their continued patronage .

As a result of these “gifts”, the restaurant owner ends up paying higher prices on the supplier’s products.

Every restaurant should have a straightforward and well- communicated policy regarding what’s appropriate and not appropriate for employees to receive from suppliers in the form of gifts.

You may think that a few free hockey tickets are no big deal but here’s Wal-Mart’s policy: Wal-Mart employees cannot accept anything from a supplier, not even a free cup of coffee. If they do, and the company finds out, it’s grounds for immediate termination. They don’t want anything to get in the way of employees doing what’s in the best interest of the company.

It’s also good to rotate people out of the purchasing function occasionally. Don’t have the same people control your purchasing decisions year after year. The longer they deal with the same suppliers, the warmer and cozier the relationships (and potential for abuse) can become.

If you suspect someone on your staff is receiving kickbacks, check to see if any suspected supplier’s prices are excessive. Have someone outside of purchasing, like a bookkeeper, do some competitive bidding on a few of your key products with those suppliers. If you’re paying premium prices, it should be fairly evident.
(Source: Restaurantowner.com; October 2011)

Lasting Impact
When a restaurant sends an email, it should not just be words on the screen; it needs to be visually stimulating and exciting to create a lasting impact. Restaurants want individuals to remember their email. The headline has to be attention-getting. If the email is about a new offer, write it in the headline, “Get 40 percent off your next meal!” If someone reads that, they are going to want to know how to get it. Keep the copy short and to the point – use bullet points if need be.

Relevant
It is extremely important to keep the information relevant. Fact – people don’t have long attention spans and they don’t have time to read over things that are of no importance to them. For example, if your restaurant is having new summer specials, send out information about it in May, not in July when summer is almost halfway over. To keep items relevant, ask for some information from the customer, like their birthday and their location. If you own a chain restaurant and the one in San Antonio, Texas is having a special deal for Alamo Day, don’t send that email to other customers around the US as it is not relevant to them.

Provide Value
The recipient of your email is looking for value. They do not want to simply read a general update of your restaurant – they want to know about events, discounts, and great promotions. In one email, a restaurant could provide discounts for a meal and tell recipients to stay tuned for new dishes and promotions. It is not so much to let people know about the new promotions or deals but let them know how it can benefit them. Maybe the new food options being introduced are healthier meals – let them know what the healthier options are and why they should come try them.

Beware of Email Frequency
No one likes to be inundated with daily emails from a restaurant. They are very likely to label those emails as “spam” and not check them anymore. At the same time, however, they do not want to wait months before finding out the next promotion. Email frequency needs to be gauged to ensure just the right impact. The best rule of thumb is to send customers emails at a regular interval but not so much that they will seek to take their name off the email list – for restaurants this seems to be 1-2/month or even weekly for certain concepts.

Include Social Media
Do not forget to mention in all emails that recipients can check out the restaurant on different social networking websites, including Facebook and Twitter. By becoming a Facebook friend of Twitter follower, individuals are provided with additional information about the restaurant and it will further deepen the relationship. As well, it is another great way to promote!

Be Smart Phone / Mobile Friendly
As more individuals are on the go, they check their emails on their mobile smart phone devices, including iPhone, Blackberry, and Android. Restaurants must ensure their emails are mobile friendly. Many traditional email formats do not translate well to the small screens of mobile devices. While the email must always maintain a sense of appeal, it must also be legible so it can be properly displayed on all screens. Furthermore, if the restaurant places any links into the email, these links must also be mobile friendly. The worst thing to happen is to send links that cannot be opened on mobile devices.

Include the Opt-in Link in Every Email
Most people think why should they put the opt-in link for those who have already subscribed to the restaurant’s emails. It might seem silly but there is some common sense behind this tactic. Customers will forward restaurant emails to their friends who they think would be interested in the news you are sending, whether it is about new items on the menu or a new promotional deal. These people may not be subscribed to your email. After they read the content and see the offer, they may want to subscribe to the email as well. A great place to include the opt-in link would be a “P.S” at the bottom.

Email marketing has great potential to provide restaurants with fast response. It is an opportunistic medium that allows restaurants to directly engage their customers. When executed correctly, email marketing can net restaurants increased profits and a solid return on investment.
(Source: Jaime Oikle is the Owner of RestaurantWebGuy.com and RunningRestaurants.com, a comprehensive web site for restaurant owners & managers filled with marketing, operations & service tips to help restaurants profit and succeed.)

2)  Communicate Regularly
Determine the frequency of your newsletter. If your restaurant regularly offers special dinners, events or fundraisers, then a monthly newsletter may be appropriate. If your menu changes every season, consider a quarterly e-newsletter. If your menu is fairly fixed, then a spring/summer and winter/fall newsletter may be most appropriate. Don’t go overboard and send out a newsletter every week. Your customers will get bored and tune out quickly. What’s more, their Internet service providers may think that you are sending spam to their email accounts.

3)  Keep it Scannable
People don’t read email carefully; they scan quickly to get the gist of your messages, then they move on. If you write a long essay, your newsletter will get ignored or deleted. Use short sentences. Like this. It works. You’re still reading.

4)  Break it Up
Keep your messages clean and readers will respond. Avoid heavy designs or long blocks of text. Headlines, color blocks, and images help draw the eye through the message. Use dividers to separate sections. Include white space between stories. In addition, try to avoid large image files that clog people’s mailboxes and prevent them from receiving your message.

5)  Light Up the Links
Label all links with underlines or use buttons. Add action verbs near each link, like “learn more” or “visit our site”. Don’t assume that people will know that images are links — put buttons and text on top of photos.

6)  How Do I Get On the List?
It’s amazing how many emails don’t include instructions on how to subscribe to the list. This is a fundamental mistake. Your emails are your #1 viral promoter. Don’t expect anyone to go to your site looking for the sign-up page. Every email, every time, should have clear and simple instructions on how to subscribe. Readers instinctively look at the footer for subscribe instructions. You lose them if it’s missing.

7)  Who Are You?
Regardless of what’s in the main body of your e-newsletter, you should use the footer to tell your background story. Every message should include an “About Our Restaurant” section, along with “About this Newsletter” and links to the main sections of your website. It won’t get read every time, but the message will sink in.

8)  Offer an Offline Incentive
Tired of getting false data in response to forms? Too many 123 Main Streets in your database? Try offering an incentive that has to be sent in the postal mail, such as a coupon offer for a free dessert or glass of wine. People will cough up the most protected private data for the simplest reason. And it’ll be accurate if they want to receive the coupon in the mail.

9)  Tell Them To
If you want people to forward your email — just ask. Add text and buttons that say “forward to a friend” in multiple places. Readers respond to these reminders. A little encouragement goes a long way.

10)  Make It Easy
Your tell-a-friend form should be as painless as possible. Every step you remove increases the chances that forwards will happen. Fill in the forwarder’s email address automatically. Provide suggested text that the forwarder can edit. Use separate boxes for 5-10 friends’ names (a single big box gets fewer forwards). And be absolutely sure to include a big mention of your privacy policy.

2. Offer free wi-fi. It encourages people to stay longer and make your eatery their “third-place”, and also shows reciprocity, as you are giving them something without expecting anything in return.

3. Be purveyors of “fresh” and “quality.” Emphasize aromas and the visual process of preparing food. It can be as simple as displaying a colorful basket of produce.

4. Establish strategic partnerships with key artisans on a regional basis. Look for products or brands that reflect your target customer’s idea of small purveyors.

5. Work diligently to ensure a consistent yet local and unique experience. Repeat efforts at least once a quarter, as the customer has a three-month memory.

6. Nurture brand evangelists by caring for them and fostering expertise. Invite local opinion leaders to a party or
event at your restaurant.

7. Give back. Support a local philanthropy or deserving individual, and don’t be afraid to toot your own horn.

(Source: kyra.com)

8. When you duck and cover, customers can’t see you.
The classic knee-jerk response to a recession is to reduce expenses any way possible. But taking yourself off your customers radar by reducing or eliminating PR efforts puts you out of sight – and the subsequent drop in revenues will put you out of your mind. Cutting your visibility during a recession – or anytime for that matter – stops the conversation with  influential media and your customers. It tells people that you are no longer in play and your are putting your business and brand at risk. This is the time when you need to create meaningful stories that change the way people feel about your company. You cannot do that if you are hiding.

7. The agency effect is a multiplier
A good PR agency, though focused primarily on visibility, can also deliver much more – hard hitting copy aimed both internally and externally, business development strategies, a fresh perspective on your restaurant and audiences. Likewise, a solid PR strategy goes deeper than just getting the word out. It can help define and develop and, in tough times, protect your brand, articulate those values and practices central to your operating strategy and most important to your customers, and position you properly for future success.

6. PR helps you hit the bulls-eye
You will not catch me saying this often, but sometimes stories get out there without the help of a concerted PR effort – you know when this happens, and it is not usually the story you want the major local paper to pick up. But these stories are uncontrolled and can take on a life of their own. PR helps you ensure accuracy and make sure your message hits its intended target. Targeted messages, as we all know, are consistently the most effective, but they must be crafted and pitched in precise ways. Good PR pros specialize in finding the right avenues, including online and mobile, which offer the best chance for establishing a dialogue with the right audience.

5. Real bang for your buck
PR, though not without expense, is one of the most cost-efficient tools available for creating brand awareness and ultimately increased sales. In the current environment, that is no small consideration. When PR initiatives incorporate cost-effective methodologies, including new media placements and unconventional tactics, the efficiency is redoubled. With the media hungry for every new success story – strong PR can gain an extra dimension of effectiveness.

4. Metrics that matter
Measuring the efficacy of marketing and advertising is ultimately rather simple; did we sell more due to our efforts, or not? PR success is not so easily pigeonholed, but that does not mean it has less value. Though we recognize that everything is about the bottom line, PR has different aims, and therefore a different set of metrics. But what are they? Is it how many times the same press release was picked up and redistributed when we google ourselves? Is it eyeballs, is it reach? Is it more valuable when a blogger writes about your restaurant, or when you’re in the Local Herald or on CNN? Or is it how people react and change the way they feel about your restaurant. What counts most in terms of PR efforts are the perceptions and reputations created and built. These, though perhaps not as quantifiable as marginal cost or direct sales, are priceless and immensely powerful.

3. It’s not what you know or who you know, it’s how well you know who you know. Know what I mean?
The current economic environment has put a high premium on trust and reputation, which for restaurants and other businesses translates to strength of brand. This is partly what good PR is all about – letting customers know you through objective sources. In contrast to marketing or advertising, which endeavor to push a product on an intended audience, PR builds awareness and invites audiences to come to your restaurant. While the former might seem more important during a recession – push that one widget to make one more sale – the latter is a foundation for future success (create awareness of the widget and the widget  makers, and the scores of people who love the widget.)

2. The power of position
The real counterpoint and compliment to consumer-based brand awareness and reputation is your restaurant’s stature in the business community. In a recession, how well you stack up in relation to your competitors reaches your customer’s ears and eyes at least as well as more over marketing messages. PR helps you emphasize or spin your strengths or shortcomings, which is critical in this challenging time.

1. Carpe crisis
To paraphrase the president’s former chief of staff, Rahm Emanuel, a crisis is a terrible thing to waste. Now is the time, as your competitors are hunkered down, to seize market share and spread your good word. And do not give up. Over the past 50 years, U.S. recessions lasted an average of 11 months, whereas economic growth endured, on average, six years. Consistent messaging and outreach in time like these will win the race. You will loose far more by dropping out. Opportunity is knocking for those marketers and businesses willing to see these costs as an investment, not an expense, and to invest in themselves and their brand. The odds and statistics are on their side, for a change.

(Source: Kentucky Restaurant Association)

1. Start with the front door.
The first impression analogy is true. Make a trip to Home Depot, Lowe’s or whatever hardware store you have close and pick up a $25 gallon of rust proof or exterior paint and spruce up your entrance.

2. How about those welcome mats?
You might need to sit down with your linen supplier; can you customize your mats to include your logo? A splash of color? The price will vary on your linen contact – but that first impression is worth a small investment.

3. How about some planters?
A potted plant in a contemporary metal planter is between $20-$30 dollars. In addition, some green will lighten the spirits of your patrons.

4. Replace the handle on the bathroom toilet.
That little sign that says, “please lift handle” or “hold handle down at least 10 seconds” has to go. You can pick up a new handle and guts from the hardware store for less than $20. Having your bathroom clean and in working order gives your guests confidence in the cleanliness of your entire establishment, not to mention the savings on your water bill.

5. Make a green move.
Spend $100 on energy efficient light bulbs. This one will pay you back as months go by, and you can tell your customers you are embracing the Green Movement.

6. How about the items on the tables?
Are they clean? Does the vessel holding your condiments need to be replaced? For $3-$4 a table you can buy new baskets or buckets. New vases, new candle holders, salt and pepper shakers and numerous other trinkets are inexpensive and refresh your tabletops.

7. Update your menu, take -out menus , and special event brochures.
Office Depot offers paper specials and copies have never been cheaper. Spend some time with the calculator and make sure your prices are correct and then spend $50 to have a copy editor read the menu so that they can identify grammar and spelling errors before you print.

8. Get those carpets cleaned!
A professional cleaning service will rid your carpet of the dull haze covering your floors.

9. If your customers can see the waiter/waitress station, it has to look professional.
Pick up some matching storage containers and make sure they are labeled and your staff is trained on the organization system. If your customer can see clean and  organized in the front of the house, they believe the back is clean and organized.

10. Take one hour and go online.
Make sure your business is part of the free Google Local Business Center, listed on yellowpages.com, Yahoo, and Bing. When you search, is your business name found? Are your phone number, address, and hours of operation correct? Make FREE work for you. Embrace technology and use it to market your business.

(Source: Kentucky Restaurant Association)

Simply put, the dish room is a numbers business. On average:

• Every three people your restaurant serves creates one rack of dishes
• 50 cents per run, per rack is considered optimal efficient for most dishwashers
• Nearly half of restaurants are not running at optimal efficiency. In fact, many are running per rack rates of 70 cents or even a dollar. In short, they’re bleeding money in the dish room!

Apply those numbers to your establishment. If you serve an average of 150 people per day, you’re likely washing at least 50 racks per day. Over a month’s time the difference between 50 cent racks vs. one dollar racks is $750 out of your bottom line. Over a year the difference is several thousand.

Operators looking to bridge that efficiency (and monetary) gap can take a number of simple steps.

#1 Replace Racks
Are the racks worn? Pegs missing? Being racked properly? If your equipment is worn and you’re only getting 9 plates on the rack instead of 20 – the ramifications are obvious. Also, make certain employees are racking glass in a glass rack and dishes in a dish rack. This prevents breakage and reduces the number of cycles required. With racks costing as little as $20 to replace, it is easy to see how quickly the cost of replacing broken or worn racks can be recouped.

#2 Have Dishwasher Inspected
It’s wise to have your dishwasher looked at monthly by your chemical supplier to ensure it’s operating at peak efficiency. Are the temperatures right? Are the jets at right angle? Have they worn? Are you getting 20 lbs. of flow pressure during the rinse? Sometimes the jets can wear in as little as six months, increasing utility costs.

#3 Replace Curtains, Arms, and Jets
When times are tight, restaurateurs often try to hold out as long as possible to replace items. The dish room is one place where this strategy can be penny wise and pound foolish. Worn curtains let heat escape which can increase energy costs, worn jets also can allow too much water through. It costs 3 cents per gallon to heat and run water through the cycle – so wasted waster adds up to wasted money.

#4 Presoak Silverware
It is important to properly pre-soak silverware from a cost, as well as sanitation, perspective. Take the full 15 to 30 minutes required to presoak silverware. If this is done, then silverware can be run through wash cycle twice, rather then three or four times – which can be a real savings.

#5 Check Final Rinse Flow Pressure
Final rinse pressure and optimum range is 20 to 25 pounds per square inch optimum. Most machines have a gauge you can use to check yourself. Too little pressure and you get a poor rinse. Too much pressure and water usage goes up and the jets spray everywhere.

These simple steps could help your restaurant save thousands each year on utility and even labor costs- allowing your staff to spend less money in the dish room.

Facebook
Boasting over 500 million accounts, you can’t afford to not pay attention to this behemoth daily destination of your customers. Can be connected to Twitter and LinkedIn easily. www.facebook.com

Twitter
Real time conversations and information in 140 characters or less. Think conversations about your industry, interest and your menu items. www.twitter.com

LinkedIn
Widely used for business and professionals to network and keep in contact. Integrates well with Facebook and Twitter feed. www.linkedin.com

FohBoh
Front of the house, back of the house. Where the industry meets, networks and information is shared. They also offer an array of services dedicated to helping your business (at a cost). www.fohboh.com

Yelp
Directory site where you can post basic information. Allows users to review and comment about your establishment. You can respond to reviews, tread lightly though. www.yelp.com

City Search
Another directory site much like Yelp but not as centered around user reviews as Yelp. www.citysearch.com

Fishbowl
Endorsed by the National Restaurant Association, tech platform provides email newsletter and add-ons such as customer retention programs. Designed for the restaurant industry. www.fishbowl.com

Constant Contact
Popular basic email newsletter service with ability to see end user data like open rates. www.constantcontact.com

Mail Chimp
Very similar to Constant Contact but with more control over look and feel. www.mailchimp.com