by Jessica Dreiling, Senior Consultant, Integrated Insight
While Germany and the United Kingdom are showing pent-up restaurant demand as bookings have already returned to pre-COVID levels after reopening, it is uncertain how the U.S. market will respond. There is a lot for restaurant owners to consider regarding space optimization, cost savings, and safety requirements when reopening for dine-in guests, but it is also important for them to reassess marketing strategies with the new 2020 conditions.
Proactive marketing can be an effective tool for restaurants, but with limited cash flow, how should restaurants be advertising, and how should marketing priorities change?
Here are 5 Cost-Effective Marketing Strategies that Restaurants Can Implement to Increase Foot Traffic:
1. Proactively Communicate Safety Precautions
Today, more than ever, when choosing where and what to eat, safety is paramount. In fact, search interest for “is food delivery safe” has increased 650% across the U.S. since the beginning of March. Reassuring customers that you understand the concerns for safety and are taking important steps to address the current situation is key.
In addition, a research study by Market Force Information shows that 80% of consumers will be visiting brands that they trust.1 In order to re-establish trust with customers, restaurants will need to look for ways to communicate that they’re taking health and safety seriously.
Communicating the new operational procedures through organic social channels will help customers feel comfortable. However, restaurant operators should focus less on talking about the frequency of cleaning since customers may feel that should have been the standard pre-COVID. Rather, talking about contactless payment, mobile menu ordering, virtual wait lines, and table spacing is a better option.
2. Communicate Support for the Community
Customers with emotional relationships with a brand have a lifetime value of more than 300% and will recommend the company at a rate of 71%, rather than the average rate of 45%. And a Mintel study shows that a company’s charitable giving affects over 70% of Americans’ purchase decisions, while 8 in 10 consumers say it’s important that a company supports a charitable cause.
Companies that make sincere efforts to be part of communities will receive customer loyalty.2 Right now, the communities in need are front-line workers in health care and the black community. With limited cash flow, restaurants can still show support through non-monetary efforts. Examples include social media posts, lighting up store-front signs with support messages, and stating a pledge to uphold safety precautions.
Americans have been living in isolation for months, and on top of that, the current social climate has left them frustrated, sad, and drained. Restaurants that show authentic support for their community will reap the rewards with increased referrals and organic social media reach.
3. Increase Repeat Visitation by Enhancing the Guest Experience
Instead of spending hours creating online content for potential customers to see, restaurants that focus on enhancing the guest experience for their current customers will see the most repeat business in 2020. Cost per Acquisition (CPA) is lower for repeat customers than trying to acquire new leads. And we all know word of mouth marketing is the most cost-effective acquisition strategy.
Rather than spending money on ad campaigns, retraining staff to treat each customer as a valued guest will go farther. Lee Cockerell, former Executive VP of Operations for the Walt Disney World Resort, recommends implementing the Guest Experience Cycle to increase repeat business in one week. This is a tool to ensure every guest is treated like a “VIP” from the first contact with the restaurant until departure.
In our article regarding space optimization for restaurants, we recommend a few ways to elevate the customer experience when wait times will increase due to social distancing requirements. This can include adding an option for virtual queuing and providing for spaced-out waiting areas or outdoor queues.
4. Increase Word of Mouth Marketing with Product Innovation
We all know that Word of Mouth Marketing (WOMM) is the most effective customer acquisition strategy, but what are the steps for restaurants to achieve it? Customers will do the talking for you when a product or experience is unique and different. “Purple Cow” is a marketing concept developed by entrepreneur Seth Godin that states that companies must build things worth noticing right into their products or services in order to sell.
Rather than relying on creative advertising and content production, only to spend money to be placed in a crowded media landscape, restaurants should focus on creating a great product and experience. When these elements provide significant value, restaurant goers will tell their friends.
Seito Sushi, a local Japanese restaurant, created a “build your own” sushi platter for take-out customers when the quarantine started in March. The product went viral on social media and it sold out nearly every day. It may have been the saving grace for the restaurant during the quarantine – all with $0 advertising cost, no additional food cost, and reduced labor cost.
Restaurant innovation does not need to be food-related to gain traction. Adding a surprise-and-delight element such as live entertainment, socially-distanced mobile trivia, and themed beverages can also be effective.
5. Assess Pricing and Promotional Strategies
While all of these strategies can increase foot traffic to your restaurant, focusing on pricing strategies can increase sales of profitable items. In our recent article on menu engineering, we provide a guide on how restaurants can design their menu to improve profitability during these harsh times. Taking a slight price increase on very popular and profitable items will be advantageous to restaurants, as it will all fall straight to the bottom line.
Promotional strategies can improve restaurant sales by attracting new customers. Partnerships with local social media influencers can be a powerful promotional tool when customers are spending so much time online. In addition, providing a coupon in delivery and pickup orders can prompt future visits.
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