Every owner has the same question on their mind when deciding how much money to budget for restaurant advertising:
Am I getting the most bang for my buck?
It’s time to think seriously about the forms of restaurant advertising that produce the best results for you, and provide the highest return on investment (ROI) over time. In this eBook, we focus on three forms of restaurant advertising that reach the largest number of potential diners with the best ROI today:
- Outdoor Signage
- Email Marketing
- Online Pay-for-Play
… and how to know when they are actually paying off.
Download this free eBook today to see how these three restaurant advertising strategies can attract new customers and keep your restaurant marketing plan delivering a positive ROI.
Excerpt from Chapter 4:
Getting the most out of your restaurant’s advertising strategy is critical, especially when marketing dollars are limited. And, with so many traditional and digital opportunities available to the restaurateur, it can be a daunting task to understand where to spend those dollars. And then, how do you calculate the return on your investment (ROI)?
By creating, calculating, and consistently monitoring your marketing or advertising budget, you can not only see how dollars are performing, but you also can gain valuable insight to make future decisions much easier.
While not all marketing expenses can be easily connected to dining sales directly, there are a variety of “softer” metrics that will work with your entire strategy. They can provide you with data that will help you promote your restaurant more effectively.
Here’s a few steps to get you started on better understanding the performance of your advertising or marketing — and how much these dollars can add to your top and bottom line!
First things first. You’ll need to get a handle on what your current marketing expenses are.
Gather up all the invoices and receipts that encompass the cost of your marketing strategy. There are several options for creating an actual budget document, from the common spreadsheet to more complex accounting software. Anything you can use to track them accurately is your best bet.
It’s important to understand that not all marketing and advertising has an easily calculated, monetary ROI. Marketing can often benefit your overall brand and affect your business in less obvious ways. But, every marketing effort is important to your overall strategy, and can help drive new and repeat customers to your restaurant and increase check averages, if carefully planned.
Let’s take another look at our steak special. From our calculations, we know hard numbers such as sales, as well as gross and net profit. But what about accounting for the expense of your restaurant’s website?
As a step in their dining decision, your customer visits your website after they received an email about the steak special. There, they can hopefully see photos of the dining atmosphere they would experience were they to visit.
Your website is important in that customer’s decision process, but difficult for a restaurant owner to attach a specific ROI value to — even though it’s a true marketing expense with costs incurred to develop and maintain it.
If you ran several email campaigns in a given year, you could spread your website costs against each one in order to help spread them out and attribute them to your ultimate ROI. This would make your break-even figure higher (as the costs of the website have increased your marketing expenses line item) but it is a more realistic look at your net profit.
On the other hand, you can also apply “soft metrics” to figuring out ROI for your website and whether or not it’s helping you meet your restaurant’s marketing goals.
While the value of your website itself can be nebulous in terms of monetary ROI, it’s still important to make sure it’s performing well enough for the dollars you are investing in it.
One way would be to take a look at your website analytics and note any traffic spikes during the time of the steak special’s promotional period. This can give you insight into the relationship between a specific offer’s effect and how your website performs normally.
You might want to put more marketing dollars into improving your website’s performance via SEO or pay-to-play tactics during non-promotional periods. That way, you can be found more easily by diners that are researching your specific cuisine or geographical location at any time, not just when you have a special promotion.
You can also look at soft metrics for the email sent about the steak special. If promotion of the offer was only done through restaurant email marketing methods, and several emails over the year are sent with specific offers, the restaurateur can see which emails perform better overall, at what times of days, and on which days during the week.
By combining hard and soft metrics, you can get an overall view of the dollars spent with your advertising opportunities and the ROI they’ve delivered. Then you’re set to make better marketing decisions that drive the growth of your restaurant!