Q: I’ve never advertised for my chain of five casual restaurants. Each time I added another store, my total revenue went up and so did my per-store revenue. Actually my per-store revenue only slightly went up when I added my second store. With the third and the fourth, the average per-store revenue was the same as my first. But with my fifth store, while there was a slight increase in total revenue, my per-store revenue went noticeably down. Most of my friends told me that it’s time now for me to advertise or else my revenue will be “in more troubled waters.”
I have a business-friend who has a chain of more than two dozen retail stores selling sports goods. That’s about five times more stores than I have and yet he also doesn’t advertise. When I told him about my fifth store, he asked me about its location relative to my four other stores. He said it’s most likely that it’s the bad location of my fifth store that drove down my per store revenue. It’s not my lack of advertising budget.
My other friends told me I shouldn’t listen to my sports-store friend. Restaurants are different from retail stores of sports goods where the different brands of, for example, sports shoes and their own advertising, carry over and benefit the sports store. So what do you think Marketing Rx? Do I need advertising now to go on winning in my marketing?
A: We should start with at least two clarifications. First is the meaning of advertising. What is it not? It’s not only TV, radio or newspaper or magazine. So what is it? Advertising is basically communicating. And for you with your five restaurants, advertising is about communicating with the customers of each and all of your five restaurants.
So to your question if you need advertising to go on winning in your restaurant marketing, that’s asking if you need communicating to your customers to grow your business. Obviously, you do need that. And in all these years and with each and all your restaurants, you’ve been advertising, you’ve been communicating to your customers.
If you were not using TV or radio or newspaper or magazine as your advertising media in that communicating, then what ad media were you using? If you think about it, it’s your store, your restaurant. You’ve used your store not only as the venue for your restaurant service marketing but also for communicating with your target customers about your menu items, about the kind of eating experiences your menu items and your service staff and eating place can give.
Your friends or you yourself may ask: “Can my restaurant perform this function over and above its true function as a service outlet?” Of course, it can. For the support Ps (i.e., price, place and promo) of the marketing mix, multiple functions are the rule; singular function, the exception.
For example, take the sales rep in a B2B company providing logistics services. It’s usual to find that this company has 6-8 major clients responsible for some 70 percent to 80 percent of each total revenue. One key account may in fact have a 15-percent share of business. The company will usually assign such a key account to a top PSR [professional sales representative] who, aside from performing the selling function, also is the ad media, the promo and PR agency to this key client account.
Or consider the packaging of an FMCG [fast moving consumer good] brand on the shelf of a self-service store like a supermarket. In a supermarket, a brand’s packaging is not just a container but is the brand’s point-of-purchase ad media repeating the message the shopper may have seen in the brand’s TV ad or heard in its radio ad. Also, it’s the brand’s point-of-purchase salesman shouting to the passing shopper to buy the brand it’s carrying.
That’s basically the multiple tasks you are asking your restaurant as a store to also perform, that is, be your advertising and promo (A&P) media. Just look at those highly decorated approach and entrance zones of Greenbelt 3, 4 and 5 restaurants. You can’t but see their A&P ad media purpose. Or get inside Italiani’s and around one table in its dining zone, hear a quickly assembled band of 4-5 waiters belting a loud birthday song. That takes on the character of a promo event a la Close-Up’s “Lovapalooza.” It’s the restaurant’s dining zone that’s serving the function of an event promo media.
For your restaurant, you have a choice for your advertising or communicating to your customers as to the A&P media to use. You can go along with the traditional tri-media of TV, radio and newspaper. This option you obviously have found not to your liking for your chain of five restaurants. Or else you can treat your restaurant and its different store zones as your A&P media. This has been in effect your choice.
If you’re not that conscious and deliberate in this A&P treatment of your resto and its several store zones, there’s a lot to be said in favor of being deliberate and systematic about the whole idea. You can develop a business growing A&P media campaign at the store level by designing your resto’s several store zones as your A&P media. For details about how to go about doing this, inquire about Salt & Light Ventures’ seminar-workshop, “Consumer Insighting for Business Growing in Restaurant Service Marketing.”
Keep your questions coming. Send them to us at MarketingRx@pldtDSL.net or drnedmarketingrx@gmail.com. God bless!