The Power of Restaurant Customers

I’ve just read an interesting article in BusinessWeek about the Yelp Elite reviewers and their power to make or break a restaurant. It is kind of scary to think that these people, mysteriously selected by Yelp (they don’t say the criteria) have so much power and feel entitled to review a restaurant based on their experience of one visit. If one waiter has a bad day, tough luck, the restaurant will go down in infamy because of the review of the Yelp Elite Member.

You can read the complete article here: http://www.businessweek.com/magazine/content/11_24/b4232083260194.htm

Although this seems like a very unfair practice (and it is), you have always to remember everything that I told you: your main marketing expenses should be always focused on your existing customers. It is useless to spend money trying to bring new customers to your restaurant (at least that you just opened it) while neglecting the ones that you already have sitting at your table.

In the past, there were a few prestigious food critics. Only big newspapers and magazines could afford to have foodies in their staff eating at fashionable places and writing a review about them. Because of the scarcity of the critics, 90% of the restaurants never got reviewed and therefore could afford to keep on doing business as usual, even if business as usual meant getting several customers unhappy or even blatantly angry. After all, the maximum damage that they could do is to tell their friends and family, a relatively reduced crowd.

In these days of the Internet and Social Media, everything has changed. All the sudden, the critics could be anyone and their opinions are read by hundreds if not thousands of potential customers. If you already know the place, you make your own opinions based on your own experience, but if you don’t, you probably go online (I know I do) and read the opinions of other people who had eaten there.

With all the restaurant offerings guess which one people will choose? The one with high ratings and reviews or the one with low ratings and nasty comments?

The fact that the opinions can be read by so many people means that each customer counts. Never underestimate the lonely customer that you sit in the crappiest table because you think that s/he will spend little money. S/he could be an Elite member of Yelp or just some foodie blogger with influence over hundreds or even thousands (depending where your place is located) potential customers.

Just that one meal could cost you dearly in future revenues.

If you always follow the model that I preach: bend backwards to please your customers and think that your clients are your number one priority, you will be heads and shoulders above your competitors who think short term profits versus lifelong clients.

Of course, I am partial, but if you haven’t done so, I would recommend that you buy my Restaurant Marketing Strategies book or ebook (just click on the link for more info, it is a VERY inexpensive marketing investment that can bring you thousands in revenue). Read very carefully chapter one and try to apply the learnings to your business.

Your customers will be grateful that you did and your business will get great online reviews.

Happy customers,
Jose L Riesco

Sitting is killing you

As we enter the second decade of the 21st century, there is one thing nearly all modern Americans have in common: we sit all the time. Though our great shift towards computer-based work has done great things for productivity, it has, unfortunately, done terrible things for our health. From increased risk of heart disease and obesity in the long term, to sharply hampered cholesterol maintenance in the short term, the negative health effects of sitting are starting to weigh heavily against the benefits. Even the medical field – the greatest advocates and reducing sitting time – is plagued by this new health issue. Though doctors and nurses get plenty of walking time, it usually falls to the secretaries, billers, and coders to do all the sitting. And, as we can see, something has to change.

This is a great graphic that shows the perils of spending a lot of time sitting...


Via: Medical Billing And Coding

Why You Shouldn't Use Groupon

I often get this question from restaurant owners and managers about Groupon.

Should I use Groupon to attract hundreds of people to my place?

My answer is simple. No, you shouldn't. And the reason is very simple.

It is true that Groupon could bring many customers to your business but the question that you should ask yourself is: Are these the kind of customers that you want?

Not only your profit margin will be minuscule (if any) after all the fees that you must pay to Groupon and all the (big) discounts that you must give to these customers but, by definition, you will bring people who are addicted to bargains. If your hope is to capture these customers so that they will love your place and come back to your restaurant, I have bad news for you: They won't. Instead, they will go to the next restaurant that gives them a new Groupon offer.

If you read my book Restaurant Marketing Strategies or some of the content in this site, you know how much I don't like spending money to attract new customers. Instead, try something different: Spend your marketing budget in your existing customers.

Yes, that's right. Treat your regular customers like kings and queens. Surprise them with something extra that they don't expect. Woo them with impeccable service and excellent food. Give them some free dishes or gift certificates so that they come back another time. Make your best effort to convince them (with facts, no words) that your restaurant is their favorite restaurant in the city.

Not only you will expend less money than trying to bring hundreds of cheap customers to your place, but these customers who you already have in your restaurant will come back and bring their friends and family members with them. They will become your best salesforce because people trust their friends and family members more than any fancy advertising. And, as an added bonus, they will be so happy with your business that they will express their opinions in blogs and forums all over the place.

When somebody is looking to try a new restaurant, they go to the Internet and look for reviews. If yours scores very high in customer satisfaction, this is the best advertisement that you can buy at any price.

Good luck,

Jose L Riesco

The Super Clients

Every small business has these special customers, you know who I mean, the regulars who come often to your place and spend nice money. They love your restaurant and are happy to enjoy a good meal at your place.

But these customers are not just good clients, they are also very powerful influencers and if you do the right thing, they can become your best sales force. Let me explain what I mean.

Whenever you have very happy clients, you can "leverage" them to spread the word about your restaurant. If you are familiar with my Formalized Referral System in a Box, you know that you can pamper these customers by offering them gift certificates for them (and this is VERY important) for their friends and family members to come again to your restaurant and get a nice discount.

Why would you like to give something to clients who come regularly anyway? Because by giving them a free meal or a discount you prove three things directly to them:

1. That you care about them. There is not just about the money but you genuinely want them to be happy and have a great experience dinning at your place.
2. That you appreciate their patronage and are willing to demonstrate it not just with words but with a gift.
3. You pamper their ego since you, as the owner or manager of the restaurant, acknowledge their presence and reward their company. Everybody likes that.

But there is another very important benefit that although it may be not obvious to them, it will happen anyway:

By surprising your best clients with a gift, you will exceed their expectations.

This will translate in them telling all their family and friends how great your place is and how nice you are. This is sales at its best. Genuine, spontaneous praise of a business by a person you trust and like. The amount of potential customers and sales that this initiative will bring to your restaurant is priceless.

I recommend you that you take a hard look at your regular customers and make a conscious decision to approach them and give them a reason to be really happy that they visited your place.

Just one word of advice: don't be cheap here. If you just give them a free dessert or glass of wine, it is a nice gesture but it won't woo your customers. If you do this, make it stand out. Complement their whole meal, bring them a bottle of a complementary good wine, give them a gift certificate that they can use in their next visit... you get the point.

Think about this as a proven marketing investment that will bring you good reputation and many new customers. It is way better to spend money with your best clients than to waste it in newspapers or yellow pages ads trying to bring new customers all the time.

Good luck and happy meals,

Jose L Riesco

The impossible customers

You all know who they are. Angry people who are looking for an excuse to blame everybody around for their unhappiness.

I met a few of these when I was managing my own restaurant. Actually, we had several who were regular clients and keep on complaining all the time: about the temperature of the food (too hot or too cold), about the service (too slow or they didn't spend enough time chatting with them), about the music (too loud or they just didn't like it, could we please turn it off?)... you get the point.

Now, if you have read my book or just my blogs and articles, you'll know that I always advocate to bend backwards to please your customers. But what if the customers are impossible to please? What can you do to please those customers who no matter what you do will always complain?

First I will tell you what no to do. You don't want to confront them or to argue with them. This is exactly what they are looking for. They have rage inside and a good fight with a waiter, manager or restaurant owner will give them satisfaction and perhaps an excuse for a free meal.

What you need to do is to diffuse the situation. Try to no take their criticism personal (it is not) and give them alternatives to their complain. For example, when they asked me to turn off the music, I explained to them that I understood that they wanted to talk but most people were enjoying the music so I lowered the music a bit and relocated them to sit on a different table farther away from the speakers. That didn't make them happy but they complied and I took the arguments for them to complain about.

Try to work a solution with them and if everything else fails, offer them a free meal and let them know that perhaps next time they should look for a different restaurant. If they appreciate your place, they will come back and hopefully behave next time. If this doesn't happen and you see that they come over and over and always complain, well, there is a point to cut your loses. Let them know that this is the last time that you serve them and invite them to visit a different restaurant next time.

I still remember the case of a couple, the guy quite introverted and his wife always complaining about every single thing. They used to come to my restaurant and although, they spent good money, no server wanted to wait their table because they were impossible to please. At one point, I had them with them so I approached their table and I told them that since they never seemed happy with our food or service, I will complement them their dinner that night and invite them never to come back to my place. The impact was immediate. The always quiet husband looked at her wife and told her in a quite angry tone that he really liked my restaurant and wanted to stay so she better be quiet.

After that day, things changed for the better. Although she still complained here and there, her attitude was very different and she behaved almost normal.

The point that I am trying to make is that you must always please your customers but also you can select the customers that you want. After all, if you can't make some customers happy, no matter what you try, what's the point? It is not good for either of you. Besides, they will have a negative influence on the rest of your clients.

Treat your customers the best you can and eliminate the ones that cause you problems or disruptions. In this way, your restaurant will be always full of happy people and that's what you want.

Happy meals,
Jose L Riesco

Playing safe or the dead of originality

I was listening on the radio today how most of Hollywood new movies are sequels. 27 of them for 2011! Marketers and corporate suits are killing any original or non-mass market directed movies.

 Audiences are mainly preteens and teens and more and more adults are staying home creating thus a vicious circle, after all, who wants to spend a small fortune to watch a movie that has more special effects than plot?

When you think about it, the same happens to restaurants. When you travel, more and more restaurants are chains or franchises. People like to go to places that are familiar with and feel comfortable ordering and eating. 

Personally, I prefer independent films and independent restaurants with substance. I like the discovery of nice, unique places where the owners great you and the food is a surprise. Perhaps I am more open than most Americans to all kinds of food, perhaps I like the uniqueness of a family (or boutique) restaurant.

If you own a franchise, I guess you are in luck since people seems to love chains; however, if you own a small independent restaurant, don't despair, some people still love their neighborhood independent restaurants.

I would suggest that you maximize the difference with the large chains. Here are some things you can do to that effect:

• Create a unique ambiance that reflects your food and style, different from the chain restaurants.
• Offer unique dishes, not the typical fare that franchises offer.
• Greet the customers, learn the names of the regulars and talk to them. People loved to be recognized and acknowledged.
• Change menus or at least offer different specials often. It is very difficult for franchises and big chains to modify their menus since standardization is part of their game.
• Suggest or even cook dishes out of the menu for special customers. Big chains can't do this.
• Treat each customer differently. If you make a mistake, compensate the customers. Big chains have policies and procedures and often they can't complement a failed service, just offer some freebies.
• Don't spend money in advertising and PR. Leave this for the big chains. Instead, use referrals as your preferred way to bring new customers. I would suggest that you download my free Restaurant Referral System in a Box and setup a formalized referral system for your restaurant.

And here you have it. The good news is that you have a lot of control over each aspect of your restaurant so you need to maximize this strength.

Good luck and happy meals.
Jose L Riesc

Sliced bread and other marketing delights

This is an interesting video from Seth Godin. If you don't know Seth, you should. He is a marketing genius with tremendous creativity. Worth a few minutes of your time to get inspired.

When Your Clients Are Not Your Number One Priority...

If you have been reading the news lately, you are probably familiar with the AT&T mistreatment of one of its customers. If not, you can read the article here: http://www.examiner.com/x-39728-Tech-Buzz-Examiner~y2010m6d3-Cease-and-desist-threatened-over-emails-to-ATT-CEO.

Of course, after the damage was done, the company responded trying to mitigate all the bad press, but it was already too late. The reputation of a company already vilified by many of its customers because of network failures suffered a terrible blow.

If you read my book or just many of my articles or blogs, you'll realize the importance that I give to putting your clients as your number one priority. No other part of your business is as important as having and keeping your clients happy. Nothing else matters, if there are not clients, there is no business. Period.

In this times where bad news spread at the speed of light, there is incomprehensible to me that a large corporation such as AT&T (which, by the way is my phone carrier, but only because of the iPod) still affords to make these mistakes. One disgrunted customer is all it takes to have the blogosphere fuming with negative comments that only help to tarnish the company's reputation.

Your business is not as visible or large as AT&T's but the same principles apply to you. Treat your customers ALWAYS as your number one priority and you will create a loyal base of fans who will promote your business, giving you the best possible advertising (and free on top of everything).

If you forget this simple rule, you will pay the price by having your place trashed in blogs, social media networks and forums all over the place. It is not a good investment and it is not, definitely, a good philosophy to run any business.

Have a great day,

Jose

Social Media

A friend sent me this video today and I want to share it with you.

If you are still questioning if you should use Social Media to market and/or promote your restaurant, I'm sure that this video will be a big eye opener.

Enjoy it...




PS: By the way, speaking of Social Media, please don't forget to follow me in Twitter at www.twitter.com/jlriesco and my Restaurant Marketing Strategies Facebook page

The Trouble with Yelp

The food service industry as a whole has had decidedly mixed feelings about Yelp, the San Francisco-based internet company that provides user-generated reviews about a variety of businesses, including restaurants.

As I wrote last year, Yelp had many owners suspicious because it seemed like the only way to get good reviews to display at the top of a restaurant’s profile was to shell out a monthly “advertising” fee. The fee has been pushed hard by Yelp sales reps and can run anywhere from $300 to $1,000 a month.

Paying the fee allowed owners to choose the top five reviews for their restaurant to display. It seemed most restaurant owners had one of two reactions: resignation at having to pay the fee to avoid bad reviews or outraged, stubborn resistance to being forced to pay to make bad reviews go away.

Over and over again Yelp has denied manipulating bad reviews in order to generate sales of their advertising packages to small businesses. And still to this day the suspicion remains among many inside the restaurant industry and out that Yelp just isn’t squaring with the subjects of their reviews on how the process really works.

Yelp’s decision to walk away from a $550 million dollar offer from Google late last year didn’t help the company’s image any either. The inherent trust most people place in the Google brand could have gone a long way towards clearing the air with Yelp’s small business customers.

The public relations problems that continue to dog Yelp seem to be a fix of their own making. This is what you get for tangling with the strongest tradition on the internet: fostering the free flow of ideas a
nd information. Companies like Google, Wikipedia, and Facebook have succeeded because they opened up access to information and placed few filters on how that access was used and digested.
Yelp’s business model seems brilliant, even revolutionary on paper: collect user-generated reviews about local small businesses and then sell the opportunity to manage those reviews back to the businesses being reviewed. But the approach flies in the face of what the internet has been all about since its inception. It would be like Google selling celebrities “advertising” memberships to have bad stories about them pushed down in the rankings on search results pages.

Yelp’s leadership probably thought they were just following a Google-esque model: get businesses to pay for top search results. After all, Google’s pay-per-click advertising is what has transformed that company into a multi-billion dollar operation.

But there is a key distinction here: Google’s paid listings come from a positive motivation – businesses wanting to sell products or be seen for specific keywords. Yelp’s model comes from an inherently negative motivation: get people to stop saying bad things about you on Yelp. No wonder they have an image problem.

The class action lawsuit against Yelp everyone’s buzzing about these days seems to be the natural culmination of a long-term problem the company has had dealing with its customers. Regardless of how the suit turns out, the basic flaws of the Yelp model will remain. And that is a lesson any business can benefit from.

Greg McGuire blogs about the foodservice industry at The Back Burner, which is written by the employees of Tundra Specialties, a company specializing in restaurant equipment and food service supplies.

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