Restaurant busy in a recession

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Keeping a Restaurant Busy in a Recession

Why just opening the door isn’t enough....

In a recession, fewer customers and falling revenues drive many restaurants into defensive management - cutting prices, economising on quality, reducing staff. But taken to extremes, these tactics can actually make things worse, sending the business into a downward spiral. The result? Uninspiring food, unhappy customers and disgruntled staff.

When business is slack, it’s tempting to jump on the bandwagon and offer big discounts to generate more trade. The downside of this strategy is that it squeezes already-tight margins and can cheapen the offer in the eye of the consumer. In a buyer’s market, customers expect more than a price reduction. They want a premium product and an enjoyable experience.

So how does a restaurant stay profitable in a recession? The answer is the same as it does when there’s no recession: by focusing less on drastic cut-backs and more on efficiency and effective marketing.

By changing the emphasis from negative to positive, restaurants can find ways not only to survive this temporary crisis, but to actually increase their turnover.

Marketing starts in your dining room

Start your marketing strategy in your restaurant. Take a fresh look at it, inside and out. Get the opinion of friends, regular customers, staff, even strangers off the street. Ask them what you could do to improve on what you’re offering. Try and pin people down to specific points such as menus, food quality, pricing, service or surroundings. Ask them to be honest and frank rather than kind. Above all, listen to what they have to say with an open mind, without taking offence.

Afterwards, discuss the results with your staff and decide together on how you are going to respond. You’re a team and it’s time to pull together.

Keep it simple

Your offer should be clear and simple. Check that your A-boards and signs are well-written and easy to read and not crowded with too much information. Are all your current promotions well-displayed and properly explained? Have staff been suitably briefed on how to sell them to customers? How long is it since you last reviewed your menu? Surprisingly, many restaurants still believe that customers want an extensive choice. Comment cards tell a different story.

Diners say time and time again that they’re confused by too many options and find it hard to make their choice. They want a smaller, more precise menu and won’t think any the worse of you because of it.

And think about the benefits – a smaller menu means fewer ingredients, less waste and shorter preparation time in the kitchen, not to mention less storage space and reduced packaging.

Look after your regulars

Regulars are the bread and butter of any restaurant business and making them want to come back is the cheapest and most effective form of marketing. When it comes to increasing sales, building up a solid base of regulars pays dividends. So look out for unfamiliar faces and make a special effort to make them feel welcome. Talk to them, find out what they like, be enthusiastic about your product, tell them what’s coming soon and give incentive vouchers for your next special event.

Customer profiles

If you haven’t already done so, start a customer database. Collect names and contact details by starting a birthday club. Having a list of everyone’s ‘big day’ provides a good excuse to get in touch with them a few weeks beforehand with a tempting offer – a birthday cake or a free bottle of wine for a party of four, for example. Over time, you can expand the information to include personal likes and dislikes, family profiles, leisure interests, work connections etc. with a view to designing promotions around your customers. See our feature on building a customer database for more information on how to do this on your computer.

A good promotion will pull in the customers

Hard times demand new tactics. It’s no longer enough just to open the door and put out an A-board to attract passing trade. If a restaurant wants to do well, it must fight hard for its share of the market.

And to do that it must add value and colour to its product. An ongoing stream of new promotions gives customers a reason to come back, especially if you and your staff sound enthusiastic about them. Try a French cheese & wine week, a tapas evening or an Indian curry night.

Make friends with local businesses

Go out and introduce yourself to local businesses, tell them where you are and what you offer. Swap business cards so that you can add them to your database. Persuade your chef to stand in the local shopping mall in his whites, doing a survey on what people eat. Get him to ask for contact details in exchange for the chance to win an evening meal for two. Go to your nearest department store or the foyer of any large business premises and swap staff names and email addresses for an entry in a prize-draw for a three-course dinner. It may cost you a few free meals but you’ll be gaining hundreds of valuable prospects. Consider teaming up with another business outside hospitality in a joint marketing venture. For example you could persuade the local car showroom to give away £50 vouchers towards a meal in your restaurant as a special thank you to everyone buying a new car. You don’t have to bear all the cost yourself. You could ask the car dealer to fund it or at least split it between you. Joint promotions like this can produce startling long-term benefits and help you establish your venue amongst a whole new group of people.

Compete with takeaways

According to media reports, there’s been a huge increase in takeaway food sales. The public are buying take-away food to eat at home and washing it down with supermarket beer and wine. At an average cost of around £7.50 a head, the cost for a family of four is around £30 and someone still has to do the washing at the end of it. With some imagination, most restaurants could come up with a menu for this price and still make a modest profit, whilst gaining an excellent marketing opportunity. As well as having four new people sample your menu, it’s a chance to sell up on other items. Make them feel welcome, get them to fill in a customer contact form, ask them to tell their friends, suggest they come back for a birthday treat.

It’s teamwork

Successful marketing isn’t just the work of the owners or managers. It takes the combined effort of everybody involved in the business to be effective. Staff who haven’t got the ‘get up and go’ or simply can’t be bothered to participate should re-think their career in hospitality. The employment market is currently saturated with good, keen workers who would love a chance to get back into a positively-run business. This period is a wake-up call for owners and managers everywhere. The good times are still possible, we just have to work that bit harder to make them happen.

‘Diners say time and time again that
they’re confused by too many options
and find it hard to make their choice.
They want a smaller, more precise
menu and won’t think any the
worse of you because of it.’

‘Persuade your chef to stand in the local
shopping mall in his whites, doing a
survey on what people eat. Get him to
ask for contact details in exchange
for the chance to win an evening meal
for two.’