Restaurants and Post-Recession Marketing
There’s been a lot of talk lately about restaurants and marketing post recession. In fact, the San Diego Union-Tribune just did a story on the uptick in business that local restaurants are finally beginning to see. Having worked in restaurant marketing during two “down times,” I can appreciate the cyclical nature of the industry. (I’ve worked with King’s Fish House, Dave & Busters, Buca di Beppo, Souplantation/Sweet Tomatoes). I’ve seen restaurants jump to the knee-jerk reaction, a deep discount, when times are down. And I’ve seen them work to regain their footing once times improve.
Now that we are all headed toward brighter days (I’m trying to stay optimistic) it’s time to start talking about what we can expect to see from post-recession restaurant marketing.
During a recession, it’s common for restaurants to be the first to experience a decrease in sales and guest counts as consumers start to feel the pinch in their wallets. It is also common that restaurants are usually the last to rebound when consumer confidence begins to rise. And while a lot of restaurants have been using heavy discounts to drive people in during the recession, the question every restaurant operator wants to know is, will consumers continue to dine out when the discounts dry up? The answer is most likely “yes.” It may take me a while out of pure stubbornness and principle, but I’ll eat out (or my family will starve) eventually.
According to QSR Web, restaurants will start to slowly back away from discounts and begin to offer special menus and value deals. Some will even begin introducing higher-priced items to offset the cost of discounting. And what does this mean for our favorite online discount source, Groupon? Restaurateurs may stop using the popular site, or some may simply limit the use or close the gap between retail price and the offered discount.
Another popular site, Yelp can help give restaurants an added boost when it integrates its user reviews with Open Table’s reservation functionality. Although most restaurants are already taking advantage of one or the other, the ease of having all the information about a restaurant and being to make reservations in one spot (plus earning points for making reservations) is going to help the industry grow and help restaurants attract new guests. The partnership also means that these platforms can be integrated into restaurateur’s strategic marketing plans. Whether that’s encouraging their VIP’s to write reviews, rewarding people who give them reviews, hosting a Yelp Elite event, or participating in Yelp restaurant week, options are starting to present themselves as the economy begins its rebound.
These are just a few of my predictions. I would love to hear your thoughts about where the restaurant industry is heading.
It seems as though the successful restaurants have created a perceived value to get customers in…well knowing that the items that are drawing people in are not the items people usually end up ordering.
I think discounting is always a bad practice. In my opinion it tells the customer, “Yes, we usually over charge you, but times are tough so we are willing to give you a break.” A better idea may be to offer a lower cost menu item. If the business usually sells Fillet, perhaps a well cooked nicely marinated skirt steak could do the customers wallet some good. 9 times out of 10 the customer is there for atmosphere anyway. Discounts bring out the “Clippers.” No business wants the “clippers.” The coupon clippers are a horrible, needy, never happy group of consumers around like cancer to eat a business with a low immune system.
After speaking with a restaurant owner, and hearing from other business employees, Yelp has a pretty terrible reputation.
The story goes that a Yelp representative contacts the business owner and offers for sale some type of expensive package that allows them to edit reviews (ie remove the bad ones) from the business’ Yelp page. The owner turns it down, and soon after lots of negative reviews just happen to appear.
I’ve heard this first hand from a couple sources. Yelp is a popular tool, so I wouldn’t recommend an owner completely ignore it. But be forewarned.
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Thanks for your comments Jordan, Chad and Chris. “Value” is obviously different for everyone. Restaurants need to determine what its value perception is and then decide if that’s the direction to go in. Should it be embraced or re-branded? With so many tools out there, it’s easy to dilute a brand. Strategic planning and analysis is imperative.
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