February 26, 2013 |

2009 April: Marketing Matters

By Pizza Today

2009 April: Marketing MattersSaturday morning, February 7th, 2009: I paused from an early morning jog. The earth was rotating into position and I had to be ready. Then, right on schedule at 6:47 a.m. Honolulu time as the sun peaked over Diamond head, I turned 50.

The only glitch in this picture perfect day was that the restaurant for which I had dinner reservations closed their doors three days earlier, a victim of the sudden drop in tourism.

Nick’s Fish Market had been a Waikiki “tourist favorite” landmark for 41 years. Their food and table service was second-to-none. But, when the steady stream of fully loaded jumbo jets with cash-carrying tourists dried up, the $250,000 a month overhead quickly became unsustainable. So the owner locked the door for the last time with nothing but a few paintings under his arm and a handful of memories.

Nick’s biggest problem was that its success was predicated on people coming to it from all parts of the globe. You have no such problem. Your customers are sitting in your own backyard, and a little tap on the shoulder from time to time will keep them loyal to you. Here’s three ways you can keep the wind at your back during these troubled times.

1. Save money — It is your own customers who are most likely to spend money with you (as opposed to some stranger who’s never even heard of you). So, the first step to keeping precious dollars in your bank account is to stop wasting money advertising to people who will not likely spend money with you. Think about it: with a dismal two percent average response rate, generic mass-marketing has a built-in 98 percent waste factor. You pay to reach 98 people who won’t buy from you, just to reach the two who will. Why not just target those two? A customer loyalty database enables you to eliminate wasteful spending.
2. Make money — Okay, now think about this: If you have a customer ordering twice a month, and spending $15 each time, that’s $30 a month for you. What if you could generate one extra visit? Now that customer is spending $45 with you — a 50 percent increase. These extra visits are easy to generate, too. Just staying in touch from time to time keeps you “top of mind.” Understand that every day at 4 p.m., $167 million is transferred from open wallets to restaurant cash registers. Staying on your customer’s “short list” keeps a bigger pile of that cash heading your way. An automated customer loyalty system does this for you.
3. Make MORE money — Now that you’ve slashed your marketing budget and have your regulars coming in more often, it’s time to target your competitors’ customers with laser-like precision. Instead of dropping big discount offers to entire neighborhoods, you can now send non-customers offers that will bring them in for a first-time visit (without putting those same offers in front of regulars). This is a simple procedure when you have a customer database. You simply purge regular customers from “new-customer” mailings.

Warren Buffet says this economic decline “will be long and deep.” Advertising efficiency and customer loyalty will keep you in the game. ?

Kamron Karington owned a highly successful independent pizzeria before becoming a consultant, speaker and author of The Black Book: Your Complete Guide to Creating Staggering Profits in Your Pizza Business. He is a monthly contributor to Pizza Today.