industry thoughts from Clarteza

Last year Clarteza was approached to provide a point of view on Return on Investment (a.k.a. ROI) as it relates to restaurants. We believe, that  ROI is an important issue for any business so we decided to write this piece.

Marketing ROI continues to be one of the most complicated and difficult things to measure, giving those who know how to effectively do it a major competitive advantage. Technology and sophisticated statistical tools play an important and costly role in the ability to effectively measure and predict the ROI but the fundamentals of a marketing mix remain the same. And a restaurant business, like most businesses, affords the opportunity to influence each of those elements in a different way.

The key issue in marketing ROI is: How do you optimize all elements of your marketing mix: product, price, promotion & place for best results in your market? How do you achieve synergies between individual elements for optimal outcome?

A backdrop to any discussion of ROI must begin with one critical acknowledgment:  In the last few years, the way consumer experiences each marketing element has changed dramatically, especially in the areas of promotion, communication and advertising.  The consumer is in the driver’s seat, and brands and services, including restaurant businesses, are switching from a ‘monologue’ with consumers, to a ‘dialogue’ where consumers directly engage with a brand or a product and collectively influence the overall state of consumer perception. Restaurant reviews on Twitter, Facebook or simply through word of mouth can make or break your restaurant, so treat your customers right and they will reward you; if not, they can break you.

With that in mind, before you start examining your ROI make sure you have all the key marketing elements working from a consumer-centric mindset. Are your customers happy with your restaurant offerings? Does your restaurant cater to their needs? Is your pizza priced correctly? Are you selling in the area that generates traffic? You may have more control over some elements than others. A premium place typically yields a premium price, so as a restaurant owner, you may need to make trade offs on these elements of your marketing mix. Promotion, communication and advertising efforts work best if your pizza tastes great, or as we say with consumer brands: “your product delivers on its promise”.

Informed by a deep understanding of your consumer and a sense of the possible relationship your restaurant can forge, you are ready to define the positioning of your restaurant.  Start with a simple premise of clearly articulating what your pizza restaurant is all about and what it has to offer. While doing so, shed your emotional attachment and view your restaurant not as you do, but as your customer will.  This means telling your “story” within the context of your restaurant goer’s life – what matters to this customer. To do so, you need to understand how the pizza restaurant fits into their lives.  What is it all about and why should the consumer care? This will likely require some research, interviews, talking to customers, and monitoring trends. Then create a stimulus (paper, video, a combination of each) that represents your positioning and can be used to elicit feedback from your consumer base, if desired.  A short set-up paragraph that frames up a need your customer may have, or a mindset your customers share, will increase your odds of making an emotional connection right from the start.

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For example: Restaurant name, a headline and your idea can be positioned like this:

Pop’s Pizza Palace: Bring your family together with our family recipe 

With the hectic pace your family keeps these days, it is easy to feel like you are simply rushing from one thing to the next, with no time to connect with each other.  You try to plan meals so that everyone can sit down at once, but it seems like someone is always jumping up from the table to go on to the next activity.

Now,  let Pop’s Pizza Palace bring your family together with our own family recipe!  Our mouth-watering pizza recipe, passed down through generations,  consists of all natural ingredients, combining the freshest vegetables, the leanest meats and the most wholesome flour.  Bring your family in any night of the week for a meal that is certain to keep your family together until the last slice is gone!

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Once you have identified the key message you want to communicate, you must consider the most effective vehicle(s) for your message.

IMPORTANT: Your communication objective and your key message should inform the communication channel you choose, and the message may need to be altered to work well within the medium.  To successfully engage consumers in a two-way conversation, the message, the medium and the moment must be relevant to potential customers and create “stickiness”.

Ideally, your marketing plan will be integrated, including multiple channels of communication to optimize your reach and allow for targeted messaging.  To foster dialogue, the easiest solution is to have a Facebook Page and a Twitter account to start spreading the word.  Ask friends and family to be a part of a movement. Engage them, talk about pizza, create messages that are helpful and interesting to your clients. Find what engages them:  Is it interesting factoids about pizza, its origins, your ingredients, your personal story? Whatever it is, have a dialogue about it.

In addition, make sure that your pizza restaurant is also part of an online network like Citysearch/Metromix – so people can find it. Registering with Opentable for reservations will also help. Finally, investigate the possibility of participating in an interesting event, promotion, something tied back to the community which can create some ‘buzz’ around your restaurant business that your customers will care about. Again, it’s about a bigger meaning and creating a conversation.

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In summary, while coupon redemption and ROI may be one aspect of assessing a marketing plan’s effectiveness, a complete understanding involves more complex constructs as described above. Most important are fundamental marketing elements such as defining your restaurant’s target market and positioning territory (e.g., What are you all about and why should your restaurant goer care?), and the tailoring of your message to appropriate communication vehicles.  It is critical to address these fundamentals upfront in order to provide the context for evaluating your marketing plan later.

When you focus on ROI only, you may lose focus of the bigger picture and key elements that make up the ROI. Applying complex and expensive analytic models to a local restaurant may not be a worthwhile solution. You will see your ROI reflected in your restaurant revenues if you get the elements of the marketing mix right.

P.S. Excerpt from this piece, and our name, were mentioned in Trade Magazine: “Pizza Today” that distributed over 40,000+ copies!