Restaurant Industry insights a must read for interested in this domain !
Quick Industry Overview: The US restaurant industry includes 480,000 restaurants with combined revenue of $400 billion. Companies like McDonald’s, YUM Brands (KFC, Pizza Hut, Taco Bell) and Darden restaurants (Olive garden, Red Lobster) are considered as major players. It is highly fragmented. The top 50 largest companies hold just 20% of the market. Demographics, consumer tastes and personal income drive demand. Large companies have advantages of purchasing; finance and marketing while small companies offer superior service or food. On whole restaurants compete with companies that serve meals or prepared foods, warehouse clubs, delis and convenience stores. In addition they compete with home cooking.
Restaurant industry’s marketing is simply and clearly based on the following “four Ps as Wikipedia says Product, Price, Promotion and Place”. All these four Ps are interconnected and determine the outcomes of the rest. Restaurant industry gets the major chunk of retail food dollar because of the differentiation factor and value added service it provides. The promotional dollars spent in developing, pricing and placing their products separates a restaurant from the rest in terms of brand recognition and quality.
Digital Impact: Evolution of web2.0 has had a significant impact on the restaurant industry. It has not only increased the reach of a particular restaurant but also has increased the competitor base of the same restaurant beyond its imagination. Customers tend to provide feedback about their experiences in various social platforms and these inputs have become an influencing factor in the decision making process. Yelp.com is the major source of these discussions and plays a major role in promotion or de-promotion of a restaurant.
Every restaurant has to have their presence in Internet; Website, Facebook page and digital marketing especially in Google are compulsory ones. Reaching out via email once in a month or during special circumstances such as new product launch, new branch opening and promotion in the form of deals keeps the customer engaged. Customer retention increases significantly because of these activities. Living Social Deal and Group On are other deal providers that increase the customer traffic and help in reaching out to new customers.
Key performance indicators of restaurant industry can be identified from the number of visits made directly to the restaurant URL, visits driven from Google, visits done to look for the location of the restaurant, home delivery orders taken from websites such as eat24.com. Calculating these numbers will depict the clear picture of how traffic is driven and what sort of promotion works for the particular restaurant. The numbers of emails opened and resulted in business are also an indicator that shows the customer interest in particular restaurant’s happenings
Solving the customer’s indifferent [bad] experiences and getting feedback consistently from them to improve the quality of their experience are the important factors that effect businesses in a positive way. With the evolution of Digital media it is strongly advised for every restaurants to develop their own friends’ circle that actively engage in Internet discussions and spread a good vibe. I do feel that there has to be someone within the restaurant or a consultant who keeps track of the things that are going about the restaurant in the Internet and update their activities such as menu, newsletter, and ambience according to them.
Bottom Line: Customers happiness comes before everything!