Basically, there are three ways of growing a restaurant business. First, attract new customers. Second is to increase volume per transaction. Third is to increase the frequency with which customers buy. So what we mean by that is, we need to get new customers into the restaurant. We need to insure that we offer customers more so that they buy more food or whatever product we sell and then we need to ensure that they keep coming back.
In order to attract customers, we need to craft a good marketing message; good, unique selling papers with your very good offers to impress these customers. And then we need to identify our target market because we don’t have resources to sell to everyone. We need to target our market to make sure we sell what people want. The next thing we need to do is to select the best medium to which we place our marketing message. And where the very cost effective place of our advert is. So that is the third way.
The next part is how we increase the volume per transaction. To do that we need to structure our business in such a way that it is focused on the needs of the customer, not just on the services you provide because one of the problems that most restaurants are facing is that they just focus on food and other services. However, in order to succeed as a business, the focus has to be in terms of what it is that the customer needs instead of just focusing on food.
You also need to focus on the demands of the next generation, what the customers will need in the future. It is very important that we keep asking questions all the time: What else? And what next? And then we discuss the increasing volume per transaction – this is the increasing frequency with which people buy. To do this, we always need to understand that the current situation is focused on relationship. So we should have a good relationship with our current customer because they already trust us. This is very important because trust and friendship play an important role.
When people like you, they trust you, they will buy from you. So now we need to create a database of our current customers. We need to grow our network. We need to develop our guidelines. We need to start the relationship from beginning in a good way. We need to program for referrals. We need to acknowledge and reward and we need to reciprocate. And finally, marketing is Psychology and Mathematics. Psychology because we all decide emotionally. It does not matter whether it is the President of USA or a cleaner. We all buy emotionally. Secondly, you need to know your numbers. It’s very important because you are in a question of buying a business. You need to buy customers. We only justify our discussion logically. And we say marketing is also mathematics. Cost effectively, you need to know how much it costs you. So you need to acquire customers because in the final analysis marketing is about buying customers. You need to know the cost of customer acquisition, the lifetime value of customers and the gap between initial purchase and profit.
There is good news and bad news. The bad news is that it’s a very difficult process of marketing. You are given marketing fundamentals here because when you understand these marketing fundamentals and when you are speaking with a marketing agency, you know what questions to ask them. If your marketing process is simple, it can be easily copied. However if it is complicated, your competitors will not do it either. You see, the gap between success and failure is a minute difference.
Most of your competition, when you think of business growth, all they think about is attracting new customers. That’s the only way to know how to grow the restaurant. Remember, restaurant business growth is about customer acquisition, it’s about ensuring that you make your current customers happy and it’s about compound prospective. Your goal as a restaurant owner should be to basically reach critical mass. Critical mass is a point where you no longer need to search for customers where a current customer becomes your missionaries and bring in clients for you. And you can do that through compound prospective. You bring in customers and those customers bring in more people for you. So it’s like 250 people just working on your behalf.
Because once you reach that point, you do not need to do anything again; you’ve reached the point where your airplane is trying to lift off the ground. Once your air bound, everything else become easy. Once you arrive at the critical mass where you do not need to go and look for customers again, it becomes easy for you. Just remember this, “You do not get customers to get your sell. You sell to get customers.” Remember this when you make your sell: you get customers. Most business owners want to get customers to make their sell. The customer is very important because you make money from repeaters. The initials make you money and repeaters make you wealthy. So if you want to be wealthy, focus on repeaters not on initials.