Restaurant Local Store Marketing – Using A Loss Leader To Attract New Business

LSM Tip #2

Hey, car dealerships have been doing it for years. Putting a fantastically priced car in the very front of the lot to attract customers. Even if they price it below cost, they still believe it will attract buyers to other vehicles.

So do the same with your products. To bring new business to your restaurant promote a low cost item at cost or less. A dessert or appetizer heavily discounted can attract customers for your more profitable entrée. This works for most concepts just be a little creative with the products you offer. Remember you want to make money on the total meal even if you lose on part of it.

Be smart – only use products that look good and you can prep earlier to help keep the labor costs down.

To Higher Profits!

RStevens

Local Store Marketing Ideas – Sampling Your Products

I have been asked to expand on some of the points on the Local Store Marketing Ideas for 2011 (post Jan 12 and excerpt from 50 Ways To Build Your Sales) so I shall take several each week and see if I can elaborate on each of these points.

Sample products to prospective customers on a regular basis.

All food franchises have promotions, specials, etc.,  that they are trying to promote. If those specials are able to be sampled in small portions it is a great way to draw new and existing customers through your doors to try the special or just as a way to promote your store and products.

This is also a great way to promote products that are slow moving, are new to the menu or are near the end of shelf life. After all it would be better to give them away to customers by trial promotion than throwing them in the bin!

If you are in a shopping mall you may be limited to your lease line but try to move a little way from your store or onto a different walkway than your customers would normally use.

Some quick ideas

A new beverage, hot or cold, can be sampled in 2 oz sample cups (available from all reasonably sized paper cup wholesalers). Write “50 cents” on the side of the cup and explain to the guest that they will receive a 50 cent discount if they return the empty cup and buy a drink at full price. A great way to induce trial and the cup redemption helps to keep track of how well the sampling is working.

If you sell cakes or any other ambient product that can be cut into bite-sized pieces, put them on a plate and place them near the cash register with a small printed sign (don’t forget your logo and description ) with toothpicks. This is also a great way to use products that are almost out if shelf life and to grow sales. Self sampling is a great idea and doesn’t cost too much in labor.

Use your best people

Sampling works best with great personalities. The better the engagement with your customer the more chance they will try your products. So use your best people. If you are using your team to sample products ensure they are in a clean uniform and are the best team member you have. Go through a script with the team member and ensure that they are fully aware of the product and its ingredients and any other information your customers need to know. For example if the product is gluten free or is not suitable for people with nut allergies.

Remember with product sampling it is a long term investment in your business and although the customers may not come back to your store on that day, you have planted the seed in their mind for the next time.

Franchise Restaurant Expansion – Are You Ready?

For the last few years I have been doing some work for a large coffee franchise as mentioned in my last post. This franchise has in the past gone through some enormous growth in unit numbers but is still basically an owner operator business with the majority of franchisees owning only one store.

As per most coffee stores, average check is low and cost of goods, with a commodity like coffee, is high and does vary greatly with the market.

The single most asked question from the franchisees is….. should I open a second store?

My answer in 85% of the cases has been a resounding no!!

I know that it is a bit of a blanket answer but, just because you have a successful business does not mean that you can translate that success into a second store.

It does not matter how good you are, there will always be some dilution of your skills, standards and business acumen when you are spread out over twice as many outlets. You cannot be in two places at once which means that you will have to take a big step and trust someone else to do the important things that you have always done yourself.

So where are you going to get this clone of yourself? From your existing store of course. Now you have taken your best employee and moved them to the new store leaving the second best to take up the slack. Good thinking considering you will only be at your existing store 50% of the time. Oops, that’s wrong because the new store will take up a larger percentage of your time for at least the first three months. That means with you spending only 30% of your time at your existing store your second best employee is looking after your livelihood!

Geez what is wrong with this scenario?

Let’s also take into account the added financial burden as well as significantly more hours spent at work and less time with loved ones. We all know how much stress these add to our lives.

It is not impossible and many people become successful multi-unit franchisees, but plenty of care and forethought are needed prior to this decision. Months if not years of planning and successional training are required to ensure even the operational aspects are in place let alone the financial planning and forecasts needed.

So if you are planning to expand for the first time, good luck and good planning.

RStevens