Market Your Restaurant Using the Powerful 80/20 Approach
The community marketing concept rests on the premise that brands are built by communities of like-minded individuals who share their brand experiences with friends and those with whom they have some connection. By identifying those communities and finding creative ways to get them to help recruit your next customers, you can see significant and sustainable results.
Also, most of us agree that the most effective restaurant marketing is local marketing, so the community marketing concept makes perfect since for restaurants.
So how do the 80/20 rule and the 4% factor fit in?
The 80/20 rule is the long held belief that 20% of a business’s customers drive 80% or more of its sales. The 4% factor comes into play when you divide that 20% into smaller segments of 20% each – or 4% of your entire customer base. Once identified, you market to your 4% groups with compelling offers that have extremely high conversion rates due to the targeted nature of the offer.
Highly targeted offers tend to yield higher conversion rates with lower costs.
How important would it be to you to find out that 4% of your fajita lovers drove 70% of margarita sales? How long would it take you to get a “fajita night” email offer out to those customers?
How do you find out about your customers to determine which are the 20% and tailor offers to segments within that group? Well, do you have a customer database, and if so, what is in it?
If you don’t have a customer database, you should probably stop reading now and work on setting one up. If you do, what is in it and what efforts are you making to enhance the data in it? A name, an email address, and birthdays are a good start. Don’t have email addresses? Start collecting them. As far as a communication tool, an email address is your holy grail.
Some ideas on ways to collect email addresses include:
- Fishbowl drops for happy hours
- Raffles and/or door prizes with entry forms including email addresses, favorite menu items, number of visits per month, etc.,
- Simple “mailing” lists, and
- VIP Clubs
Once you have begun building out an effective customer database, you can begin to drill into it to identify your top 20% customers. Once you have identified those customers, you can begin to divide that group into smaller sub segments of customers with commonalities that you can address with very targeted offers.
The goal here is to tailor offers to these sub segments with sky high conversion rates. If you can achieve this you will lower your overall marketing costs, increase sales among your best customers, establish yourself as a brand of choice creating even more customer loyalty, and convert many of these customers into brand ambassadors that can lead to even more good customers.
When you compare the potential payoff of 80/20, 4% factor marketing against your typical direct mail or news- paper ad payoff, the benefits become clear. Isn’t it time to bring your marketing into the 21st Century and start harvesting the benefits?
Are you ready to explore financing options to expand your business? ARF Financial is a lender you can trust. We have a quick and simple funding process. Contact us today to learn more.