POS Software

How Much Money Should I Spend on Marketing for my Restaurant

Here’s a question you should be asking. How do I determine what kind of money to spend on my marketing? Well, the real question I think is what’s a customer worth to you? If you don’t know what a customer is worth to you, you really need to nail it down. I’ve seen plenty of studies, you know, restaurant-wide, but you should look at your average ticket item. You should figure out how often you think your customers are coming back to visit you, and if you changed a few things, maybe you could get them to come back a little more frequently, then how frequently would that be and what would they be worth I think you should be thinking in terms of the lifetime value of the customer.

 

Here’s a very good example. One of our customers owns a deli, and her average ticket for a customer is right around $14, and she thinks that her customers visit her once a week, so that means that her customers are worth about $700 a year. Now, I guess you could argue how long these customers would be customers of hers for a lifetime, but I think it’s safe to say that if you’re doing a really good job and people like your restaurant, and they’re coming in there about once a week, there’s no reason that they won’t come back to visit you for as long as they are in the area. Well, if you figure that the average person moves about every seven years, I think seven years is actually a pretty good time.

 

So her lifetime customer is worth seven times $700. That’s not bad for a deli. She’s approaching a $5,000 value for a customer. So when it comes to getting that customer and hanging onto that customer and getting that customer to buy more product from you, your efforts should be around about thinking in terms of that person is worth about $5,000 to you.

 

They should also be thinking in terms of well, how could I make that person maybe worth $10,000 to you. How could I get them to come back more, or how could I get them to spend more on average with me when they’re here. This is part of your strategic thinking. Your strategy should be around these kinds of things.

 

What do I need to do to get people to come more often, spend more money, and get more of them in my store? You need to understand who they are, what they’re doing, and what kind of money they’re spending. Do some math, really understand what they’re worth to you, and then kind of back into how much can I really afford to spend because I think that people shortchange themselves on this. They start thinking, Oh, I spent too much money on marketing I’ve spent too much money on that advertising campaign that didn’t work out.

 

It needs to be thought of in terms of what is it costing me to get a customer, what is it costing me to keep a customer? What is it costing me to get that customer to spend more? That’s the formula for growth, and you need to do it from a standpoint of what is it really worth to me, so do some math, think about your customers, think about your ticket items, think about how maybe you can increase those ticket items, and think about how you can increase frequently, and think about how you can get more people to come into your restaurant because if you want to hit your goals, you got to understand what are they worth to you, how frequent can I get them to come visit me? How can I get more of them, and how can I get them to spend more money with me when they’re here? If you’re thinking in terms of those things, you’re thinking in terms of growth, and it all starts with really understanding the value of your customers.

 

Here’s a question you should be asking. How do I determine what kind of money to spend on my marketing? Well, the real question I think is what’s a customer worth to you? If you don’t know what a customer is worth to you, you really need to nail it down. I’ve seen plenty of studies, you know, restaurant-wide, but you should look at your average ticket item.

 

You should figure out how often you think your customers are coming back to visit you, and if you changed a few things, maybe you could get them to come back a little more frequently, then how frequently would that be and what would they be worth. I think you should be thinking in terms of the lifetime value of the customer. Here’s a very good example: One of our customers owns a deli, and her average ticket for a customer is right around $14, and she thinks that her customers visit her once a week, so that means that her customers are worth about $700 a year.

 

Now, I guess you could argue how long these customers would be customers of hers for a lifetime, but I think it’s safe to say that if you’re doing a really good job and people like your restaurant, and they’re coming in there about once a week, there’s no reason that they won’t come back to visit you for as long as they are in the area. Well, if you figure that the average person moves about every seven years, I think seven years is actually a pretty good time. So her lifetime customer is worth seven times $700. That’s not bad for a deli.

 

She’s approaching a $5,000 value for a customer. So when it comes to getting that customer and hanging onto that customer and getting that customer to buy more product from you, your efforts should be around about thinking in terms of that person is worth about $5,000 to you. They should also be thinking in terms of well, how could I make that person maybe worth $10,000 to you. How could I get them to come back more, or how could I get them to spend more on average with me when they’re here.

 

This is part of your strategic thinking. Your strategy should be around these kinds of things. What do I need to do to get people to come more often, spend more money, and get more of them in my store? You need to understand who they are, what they’re doing, and what kind of money they’re spending. Do some math, really understand what they’re worth to you, and then kind of back into how much can I really afford to spend because I think that people shortchange themselves on this.

 

They start thinking, Oh, I spent too much money on marketing I’ve spent too much money on that advertising campaign that didn’t work out It needs to be thought of in terms of what is it costing me to get a customer, what is it costing me to keep a customer? What is it costing me to get that customer to spend more? That’s the formula for growth, and you need to do it from a standpoint of what is it really worth to me, so do some math, think about your customers, think about your ticket items, think about how maybe you can increase those ticket items, and think about how you can increase frequently, and think about how you can get more people to come into your restaurant because if you want to hit your goals, you got to understand what are they worth to you, how frequent can I get them to come visit me? How can I get more of them, and how can I get them to spend more money with me when they’re here? If you’re thinking in terms of those things, you’re thinking in terms of growth, and it all starts with really understanding the value of your customers.

In using Kroid POS Software, you are assured that you spent efficiently for a POS system that can automate your restaurant’s ordering and payment processes.