Aaron Ellard
Right? And yet they keep coming.
As we know, restaurateurs are born out of a passion for the industry and often the drive to be your own restaurant boss outperforms certain rational decision-making skills. So considering there will surely be no end to new restaurants, what do restaurant owners need to do to future-proof their business?
1. Know your numbers. Here’s some simple math to keep in mind:
Average profit margin of a successful restaurant before the pandemic
2. Recognizing the simple math that was guiding the restaurant industry for years is no longer applicable.
Some new expenses that have come into play in recent years and especially since March 2020
The pandemic has created fundamental changes in the way restaurants operate: Consumers have widely adopted the usage of food delivery apps; restaurant fees to use delivery apps have increased 150%; restaurants need to compensate workers more in order to retain staff; Global markets are driving up prices for packaging and fulfillment. By the time you add this up, the math doesn’t make sense anymore.
Adding it up:
These added costs are significant; assuming your restaurant is busy and running efficiently, you’re still facing a zero profit unless you find ways to cut on costs or increase prices.
3. Use your brand to increase the perceived value of your product
You and I both know the experience you’re providing your guests is worth it. But will your customers understand a price increase? If you’re just starting out, how can you position yourself in a price range that is sustainable long term?
Your brand is not your logo, or your Instagram profile. Your brand is how your business is perceived in the hearts and minds of consumers. How well you position your business using brand strategy depends on your ability to communicate your vision in a way that resonates with your audience. A well executed strategy allows you the freedom to control your price point and the value perceived by your customers.
Control over perceived value is the path to higher profit margin or more market share – or both. It works like this:
High Perceived Value / High Price Point -> Smaller market share (Major Tom)
High Perceived Value / Low Pricepoint -> High Market Share (Tokyo Street Market)
High Perceived Value / Perfect Price Point -> Large Market Share (Cactus Club)
4. Reinforce your brand at every customer touch point
To reserve space in the hearts and minds of your customers your business needs to be memorable, distinct, and consistent. If you put yourself in the shoes of your customers, what are the visual cues that will stand out to them when they think of you? It could be the presentation of their food, an interaction with their server, the cardstock used for your menu, a drink coaster, your website, the sign on your door, a matchbook they stuffed in their pocket – an endless list of brand cues begin to form an overall experience that is memorable.
The more you take advantage of opportunities for visual cues reinforced with consistent messaging, the more you create a distinct and memorable experience. By doing this not only will you grow a loyal customer base, but your customers will also become fierce advocates for your brand. Word of mouth can be a powerful marketing tool, especially when your own message is relayed the way you intend it.
5. Diversify your revenue by reaching your customers where they are at
Your customers are more primed than ever before to buy a subscription, order online, or participate from home. Take this opportunity to expand your reach and diversify your revenue with direct to consumer sales like shelf stable sauces, dinner kits, or a home delivery service. A reusable jar with your label on it is one way to constantly remind your customers of your brand before they even leave their home.
The more sales channels you create stemming from your kitchen, the more you can subsidize your overall labour costs while getting your brand in front of people. Consider how even an extra 15% of revenue can decrease the impact of fixed costs, and increase the efficiency of your prep team. You can turn your kitchen into a revenue center that generates sales throughout the day, instead of a cost center that supports your dining room.
To do this well, you need an effective and functional website that can sell products, collect customer emails, and/or process recurring payments. You can leverage tools like zoom and MailChimp to connect with customers and host cooking classes, and local fulfillment companies are available in every major city to help you with scheduled deliveries. The more control you have over these revenue building brand touchpoints, the less you will rely on 3rd party apps like Doordash who steal your brand equity (and sales).
6. Repeat a process
When it comes to building brand recognition and recall, your audience needs consistent and constant reminders of who you are. Repeat yourself often and integrate a marketing schedule into your production schedule. This will set expectations with customers, reinforce your messaging, and create efficiencies in your team.
Start by creating a social media content calendar and be sure to include regular photoshoots. Plan out your recurring themes and mix in unique content in intervals. You should incorporate video, candid live stories, and consistent messaging.
Next, bolster your marketing with media partnerships, influencer campaigns, and paid advertising on a quarterly schedule so you are always reaching new audiences. Use consistent messaging and show off your brand in the best possible light. Focus on promoting products with your best margin; if this is a subscription to your cooking class or home meal kits – do that. When paying for advertising the most important element is to measure results.
As you complete the process a few times you will notice steady growth in sales, your following and traffic. Give your brand time to gain traction, but don’t hang on to tactics that don’t work. And don’t forget, you can’t do everything yourself. Find out how Monitor can help you reach your goals – Let's go! ->
