If you found this page then you are probably in the same boat we were six years ago. Sales are slipping or flat, you’re spending money on advertising but not really sure if it is working, desperate to try and find some consistency with your dining room traffic.
Today I want to tell you about the only marketing strategy for restaurant that you need.
Catering is Your Marketing Strategy
Let’s face it, we as small, local, independent restaurant operators have to fight for every dollar we earn. We are competing with national chains that spend millions on advertising and much more brand recognition than we can ever hope for.
We have to make sure every dining experience is perfect, otherwise our customers will leave negative reviews everywhere online which hurt us much more than the big boys.
Why? Because the national chains are familiar, consumers will take our online reviews into consideration much more than theirs.
For these reasons and many more I’m going to try and convince you today to shift most if not all of your marketing efforts to promote catering.
If you have never catered for your customers before our eBook has a ton of great information for those just starting out.
Catering allows you to get paid to show off your food. What do I mean by this? Think about it. You get hired by one person to serve possible hundreds of people.
Well if you do your job correctly and present them with outstanding food and excellent service they are going to ask where you are from.
This is where you will need to make sure you have your logo on your clothes or your vehicles so there is no doubt who you are. You should also always have menus and possible coupons to drive traffic from your catering events to your restaurant.
Do you see how one hand washes the other?
You can promote your catering services inside the four walls of your restaurant to your current customers relatively inexpensively. As those customers start to pay for your catering services your product will get introduced to potentially new customers at every event.
Also, catering orders produce much higher tickets than those in your dining room. So wouldn’t you want to try and get as many of these as you can handle?
The days of putting coupons in your local penny saver magazine are over. How are you tracking those radio ads that you spend so much money on? Do people even watch TV commercials anymore?
The best way to get people to buy from you is to let them try the food. Well for each catering event that you rock, there could be a handful of people who are also in charge of ordering catering for their office, or their daughter’s wedding or a number of events. Guess what?
They just got to try your food and see how you operate! I promise if you execute your catering events flawlessly the referrals will start to come and create a snowball effect with your marketing efforts. This is where you will really start to see the benefits.
Spend Your Money Wisely
Like us, you probably don’t have a ton of cash sitting around at your disposal to spend on marketing. Let’s say you’re doing about $500k a year in sales you don’t want to spend more than 3% of sales on advertising.
That gives you about $1,250 a month for advertising ($500,000/12 months*.03). The good news is, you can do a lot with that $1,250!
The other great thing about this is if your average catering order is $200 then you only need to sell less than 20 orders to breakeven on your investment! You would need a couple hundred people to come into your dining room to achieve the same results.
Does that sound much easier? Let’s see what we can do with this money.
The absolute first thing you need to do is print some menus. Depending on how you design your menu you could end up spending $1/piece. Let’s say you print 100 to start, a hundred bucks gone.
Next you could print some flyers, table toppers and posters to plaster your restaurant with. This gives you at least 4 different areas where your customers could see that you are now offering catering services (these three plus your menus).
The good things about these marketing devices is that they are cheap and you can add your other dining room specials to them and rotate them out monthly. All together let’s say you spend another $200, so we are down to $950.
For these last two ideas I’m assuming you are able to design your own artwork with software such as Microsoft Publisher. The whole Office suite is $99/year so technically we should consider $8.25 a month part of your marketing budget.
This next one is optional but you can by a TV for a digital display. These are great because you add as many images as you want to a flash drive and the TV will play a slide show of the images.
Definitely include some catering images but you can also promote any other special you like.
We have had one TV last for 5 years (still going strong) and another for 3 (usb port failed) so let’s assume you get 4 years out of it and spend $400. That is only $8.33 a month!
One of the best ways to spend your marketing dollars in my opinion.
OK if you are keeping up with the math we should have $933.42 left.
When you are first starting you will need to focus on building up your customer database. While these last few ideas are great for reaching out to your current customers, you will need to actively go out and get more.
Acquiring New Customers
The best way to do this we have found is by prospecting. You can buy lists of businesses in your area from data providers that have a ton of information you can use to go after potential catering customers.
Let’s say you spend $400 on a list of 2,000 businesses. Well it might take you 6 months to work your way down that list so let’s consider this a $70 monthly expense.
You bought the list, now what? Well now you will need to go through and pick out which companies might potentially order catering from you.
Once you have weeded out any current customers, other restaurants and any business that don’t quite fit your criteria (company size, industry type, etc.) you will need to work your list!
Create an offer for a free sample of your food. Remember when I said the best way to get them to order is to let them try it? You can choose how big or small your offer is, just remember the better the offer the more responses you will get.
We have even found that many of those who respond to the offer will feel obligated to order from you. Many will also tell you about upcoming events that they could use your for (make sure to follow up on those!).
Once you have your offer you need to start working the list, there are two ways to do this. By phone or by mail.
The better way is by phone but it is more time consuming so if you have a couple hours each week or want to use some of the remaining marketing budget to pay one of your staff to make these phone calls.
This is cold calling but since you are offering free food, you generally get a more open minded response on the other end of the phone. I try to make this clear as soon as possible on the call, this takes their guard down.
Let them know who you are, why you are calling (to promote catering) and see if you can speak with the person who handles catering. When you reach that person try to find out how often they order and for how many people.
If you like those answers you may want to tell them about your offer right then and see if they would like to schedule it.
If you don’t like those answers thank them for their time and let them know you will be sending out menus in a few weeks.
You get to set your parameters. For example, if someone orders weekly for 20 people, they better get that offer!
If someone orders quarterly for 20 people, well maybe you add them to your database for future postcards but don’t send them the free offer.
If someone orders once a year for 20 people, well you probably won’t want to send them anything.
Start with the smaller companies and work your way up the list so you can get some practice with the phone calls. After a handful you will find a groove.
If you choose to do this by mail, you will need to design a catchy postcard (not like the one above) with your offer described on it. I recommend only sending out 200 of these at a time.
You have to send at least 200 to get bulk postage rates and if you send any more than that you might have trouble keeping up with the responses from the mailing.
We used the mail technique when we first starting promoting catering we would average about a 3-5% response rate. So for every 200 post cards we might get 6-10 responses.
This technique is more efficient than the phone calls but not as effective. With printing and postage you will spend about $.60 a piece or $120 for this mailing.
Either way, you need to work that list and you still have over $800 remaining for your marketing budget.
I know this part sounds like a lot, well, it is. It is also the most important part. Our catering software actually automates this process taking some of the burden off. Check out our review of that software to learn more.
Marketing to Current Customers
As your database grows, we will be using most of the remaining budget to market to your current customers. At least once a month you should be sending them a postcard and an email. Email services are relatively cheap and some even offer it for free until you get a certain number of subscribers.
Once you have over 200 contacts on your catering database the postcards are also relatively cheap to promote specials or coupons.
You may also want to use this remaining budget for things like bridal shows and business expos. These are great ways to promote catering and we have seen a ton of success with these.
Only after you feel like you have completely maximized your budget for promoting catering should you use your marketing budget to promote the dining room. Applying the same techniques of course!
Deal with Less Customers
Like I mentioned earlier, it takes hundreds of more customers to create similar sales as your caterings can produce.
For example, our dining room data base has over 8,000 contacts on it while are catering database is around 800 customers.
Catering represents about 30% of our sales, and we do that with 1/10 the amount of customers as the dining room! Just from a customer service stand point this will create a lot less stress for you.
That is not to say you won’t have to get involved with the customer. For wedding or large company picnics there can be quite a bit of back and forth with the customer.
Imagine What You Can Do in One Year
I know time flies, especially when you are running a restaurant but one year is a long time to see some results with your catering operation.
What if you were able to get 5-10 new catering customers a month? At the end of your first year that is 60-120 new customers!
For every 10 of those maybe you get 2 referral customers, there’s another 12-24 customers, just from doing a good job at the event!
Weddings are especially important, at most weddings there are other engaged couples or siblings. We did wedding for all three children in one family before!
Then there are the accidental referrals you get just from people attending events you performed. These people didn’t get referred to you by your other customers they just saw how you operated and tasted the food. Maybe you get 1-2 of those a month.
Do these number sound outrageous? Not at all, you could very easily have close to 150 catering customers at the end of your first year of launching a catering program.
Maybe each customer is good for $500 worth of sales throughout the year. We are talking about an extra $75,000 in sales that you didn’t have last year!
If you can get each customer to spend $750 throughout the year then we are talking about $112,500!
You are also only spending $15,000 to get those sales. Do you think if you spent $15,000 on radio ads you would see an extra $75,000-112,500 in sales? If you can then please let me know what your magic formula is!
I’m not talking about a magic formula. I’m talking about hard work that pays off. You need to create a system for your marketing strategy: constantly reaching out for new customers and staying in touch with your current customers.
Then it just becomes a numbers game, the bigger your database, the more responses you will get.
If you are doing this correctly you will experience times throughout the year where you might just be so busy producing the orders you have sold you don’t have time for prospecting.
This happened to us 2-3 years into really promoting catering and the snowball effect was really taking off. There were some months where we had 100% catering sales growth months!
These months we were all just running around crazy until we could hire another catering staff member or promote someone from the restaurant.
If you experience these times you probably want to slow down on the marketing so you can keep all of your current customers happy. Plus you don’t want to attract a potential new customer and then not be able to give them an awesome experience.
After you get caught up and can catch your breath, get back on that list!
This is a methodical way to constantly grow your catering sales which should also lead to overall sales growth for your entire restaurant.
This is how we have grown our catering sales by over 30% each year since 2012 so I know it works.
I know this is a lot to take in but take it one step at a time, a year from now you will be thankful.
If you have any questions or other effective market strategies for restaurants I would love to hear about them in the comments below!