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The Great Debates Independents
vs. Chains

Reader Feedback:

Couldn't agree with you more, Bob! Advertising is the key to success. That, and word-of-mouth, once the customer has been to your establishment or bought your product..

Even though we are not a restaurant, but sell high-end fruit ingredients to restaurants and the food service industry, as well as having our own product called CREATURE CRUNCH (fruit treats for creatures of all types and sizes), plus we are a Broker for a Pet Bakery in Mountaintop, PA (natural cookies and candy for dogs), you must advertise.

Being a new company, advertising is a huge bite out of cash flow, especially when cash flow is just beginning. But unless the public knows you exist, what good is any product? The "big boys" will eat you up unless you are willing to take a chance and play with them.

I say, if you WANT IT BAD ENOUGH, do what you have to do to succeed without stepping on anyone.

"Fake it, until you make it." (quote....Deborah Kay Neumann)

You are as big as you perceive yourself to be.

Above all.....NEVER GIVE UP! NOT EVER!

Warmest Regards,

Chairman, CEO & Founder of THE MAIDEN MERCHANT INTERNATIONAL (R)(C), Incorporated

**Next Post

I wanted to comment on the recent articles on both service and group advertising for independents.

I have been in the rest. business, in management of both independents and chains, for approximately 15 years, and currently operate a new mystery shopping company in Calgary, Alberta. And like the writer of the service letter, I have seen 'much'.

It continues to baffle me why operators moan over the lack of customers, and blame it on the advertising muscle of the chains, as nothing could be further from the truth.

Advertising has little, if any, direct impact on the success of a restaurant. Don't believe me? How about I introduce you to a concept called marketing. Advertising is generally considered an element of marketing, but in my experience, it should be a very small element. Advertising of the paying kind is used specifically to 'get the message out', no more, no less. Marketing is the message. Too many operators do not recognize the power of this simple comparison. If I can simplify, advertising is a guy standing on the corner yelling out, "Food for sale, food for sale", where marketing is another guy in the crowd walking around asking potential customers if they're hungry, and if so, what would they like to eat.

When an operator believes in advertising, and the sales are poor, they spend more on advertising. They lower prices thinking, "That'll bring 'em in". They skimp on portions, or buy a lower grade of beef to cut cost so they have more money to advertise. But it seldom works.

When an operator believes in marketing, they find out exactly what their potential customers want, and find a way to deliver it. They spend more money on the skilled chefs because their standards and level of commitment are higher. They increase portion size just a bit to make sure no customer ever is left wanting or questioning the value. They terminate servers who shouldn't be servers, and work to support those that should. Above all else, they make sure that every customer gets what they want out of their dining experience.

A lot of independents never get this concept, and never reap the rewards this business can bring. Chains on the other hand understand this perfectly clearly, and insist all locations work towards these goals of customer satisfaction. Of course it never works 100%, but they make an effort. And another thing chains do that virtually guarantees a steady stream of customers is they have recipes that are followed every time. People hate surprises.

I recently did another internet survey of customer preferences, and the single biggest reason for going to a restaurant, chain or otherwise, is food type & quality. The second place was fairly scattered, but decor/ambiance seems to be second place. Advertising and coupons motivated less than 5%.

But the interesting part comes in the "Why do you or don't you come back" question. About 80% was split almost evenly between poor or inconsistent food quality and an attitude of indifference, (I don't give a damn), on the part of the staff. If you apply simple logic to this you see that by maintaining consistently high food quality you can save approximately 50% of the customers you are currently losing. And if you are, or you have floor management that is very hands on, and always making sure by physically being out in the dining room and kitchen, you can eliminate most of the other 50%. Guess what. Virtually all chains insist on strict menu guideline adherence, and very physical location management. And because they keep bringing customers back with appealing decor, good food, and reasonable service a good part of the time, they have the money for those glitzy advertising campaigns.

And as a mystery shopper, I can absolutely guarantee you that unless you are taking off those blinders and getting your customers point of view, you're likely missing the boat by a huge margin. This is often demonstrated by the chef/owner who wants to have his own place in his own way with his idea of the perfect menu and decor. Sure, they'll get some business, and a few do really well, but does Ford make just one kind of car? Did you know Jell-O comes in over 100 flavors to suit individual market preferences? All professional marketers know that in order to stay in business over the long haul, you need to respond to changing, (or not), consumer attitudes and desires, whatever they may be. The key, once again, is to know what your customers or potential customers want, are willing to do to get it, and what they are willing to pay for it. The most professional realize that that answer is always a moving target.

Consider that in a typical visit, a customer will mentally judge your restaurant between 20 and 100 times, mostly subconsciously, on everything from the garbage in the parking lot (I told the busboy to go pick that up), to the light that's out just above the mirror in the ladies washroom (he was supposed to do that too), from the ketchup stuck to the menu (they were supposed to do that Monday) to the overcooked broccoli (we made too much and didn't want to throw it out), from the server's phony smile (but she's really good with the sidework) to the comment overheard as the two servers walked by about how the cook is performing poorly because he's hung over from the party last night (I've threatened to fire him a number of times, but he keeps doing this...) . It all counts, and unless you as the operator are willing to make a deliberate effort to enforce very high standards throughout your operation, you might as well get out before you go broke trying to 'advertise' your problems away.

And to add an often heard comment to bring it all together.... whoever said "Business is a democracy is full of crap, this company is a dictatorship, and I'm the dictator" was somewhat misguided. Business is a democracy, but it's not the staff who get to vote.

Joe Seigo
Quality Check Services Inc.
Calgary, Alberta

**Next Post

Excellent article and it hit the nail as close to the center as possible. However, independents need not fear, because there are thousands of ways to market BETTER than the chains.

That's right-BETTER. Chains direct their advertising at everybody, but there are quite a few of us that don't need everybody to hear our message. We need to concentrate on getting our message to those that matter.

For example, one of my restaurants is a small (74 seat) New Southern Bistro that caters to a local clientele in a larger city. We garner most of our business from within three miles. We don't need for everyone within a twenty mile radius to know about us. So we concentrate on directing our marketing to our Prime Market Area (PMA) through ads in the very localized newspapers, in-house promotions and direct mailings using our mailing list and those available from different organizations, such as American Express.

Using simple "guerilla" marketing techniques, we have kept up and even outpaced the growth of the chains. Nothing is more pathetic than hearing independents whine about being outfoxed by the chains. Independents can react to the market much quicker than the behemoth chains that go through six months of development before a marketing tool makes it to market. With a good computer, printer and some creativity, an independent can jump on it in a day.

One more rant, please. If you need help, read some books. If you still don't get it, hire a consultant. Our little company does some now and we have proven very profitable for those that have hired us. I can be reached

Keep up the great website--

Kristian Niemi - owner and operator of Mr. Friendly's New Southern Cafe, Mr. Friendly's West and Gervais & Vine Wine Bar and Shop.

**Next Post

A few weeks ago I read your article on the independent restaurants and how they lose business to national chains due to the advertising power of the chains. I also read a response from a reader liking the idea of small restaurants working together to advertise as a group. Than this past week I read in the Sunpaper the volume of business the Hard Rock Cafe did in Baltimore in the last year, $14,000,000.

It seems to me that the small restaurants, known to them or not, are fighting for their survival. The hard Rock Cafe is surrounded by small restaurants on all sides, yet I am sure none of them are doing these figures a year. So what can the small business do? Alone not much, but as a team it can do whatever the strength of the team will allow.

Perhaps, joint advertising as your neighborhood restaurant with five dishes that would be consistent across the country and the rest of the menu would be up to the chef in each restaurant. Perhaps signage should all be consistent on the top such as, "Neighborhood Restaurant" then the business name.

These are just a few thoughts and I do not know if they will work or not, but I do know that in the Hard Rock Cafe area in Baltimore there are a lot of good local restaurants not getting their fare share of business due to the successful advertising of places like Hard Rock. I would like to suggest that everyone who has anything to do with small restaurant business start looking real hard at this problem before it is to late and join local restaurant associations and learn to think as a group, if this is done the large chains will have a hard time keeping the market share they enjoy today.

Thanks for you time.

Joe Janowich

**Next Post

I just recently found this web-site and have found it very interesting. I own a 41 year old restaurant that was declining in sales for the past 10 years. The previous owner was in bad health and simply just let the place run down. I also have a previous background in advertising and marketing, even owning an advertising agency and have a few thoughts about your article and the responses. Some things I would like to point out:

1. One of the responses talked about some restaurant doing 16M - that's great, but I assure you that they pulled from a wider ring around their restaurant than the imaginary 3-mile ring that most experts talked about. And I'm sure that chain had to "spend more money on advertising" to enlarge the ring and pull more dollars in.

2. My next point is...if one of those competing restaurants could do 16M, they couldn't handle it. They would not have the resources, staffing, or the facilities to handle such volume.

3. My next point is the most critical: most restaurants don't know their market! They spend $$$$$$$'s on advertising and more advertising to simply pull people in one time and leave and never return. That's not the answer for increasing business.

The average restaurants see the average customer 2.3 times per year. If that restaurant could increase that to 3.3 times per year it would add an automatic 46% increase to the bottom line in sales. The secret is to getting your present customers to return more often. This is the most often missed way of increasing business.

To do this, simply give them reasons to return. More selection, better service, higher quality, larger portions, better prices...whatever it takes to get people to "talk" about your restaurant. That is what generates "word-of-mouth" advertising.

A good example of this in our area is a local "fish-camp" style restaurant, it's been there for 30+ years and has never advertised. Why? People just simply love to go to the place.

4. Getting your present customers back in is only one part of the solution. The other part is getting "new customers". New customers are important to the growth of any must constantly replace dollars that are lost.

Advertising is the way to get them in there!

Advertising programs don't have to be elaborate, fancy, or time consuming. They simply need to be effective at GETTING NEW PEOPLE IN!

One of the easiest ways is to have some business size cards printed up with a discount for presenting it. Word it so that it is for new customers that have never dined with you. Give it to present customers and ask them to treat a friend that has never been here before. Give the new customer a 25 or 50% discount on their first purchase...GUESS WHAT...NEW CUSTOMER!...

5. Here is another rule of thumb that I have learned. Advertise and you will get more advertising reps hitting you with new ideas. Your mission is to listen and find the programs that fit your target market and your budget.

It seems like if you run a newspaper ad...then the radio guys sees it and calls on you...then the coupon guy sees it and comes in and so forth and so on.

Getting your name in front of the public is one of the most important things that you can do.

6. The sixth rule...become involved in the community...That is your best source for getting new customers...and getting feedback from the community. Believe me if you are making a mistake...someone will tell you about it. Your interaction with the community will pay off more than any advertising program or marketing idea.

7. Be fresh...nothing does more for business than a fresh coat of paint or new lights and signs. Always be changing your interior and look for that business reducing dust spots that customers notice. Change your employees uniforms monthly...BE FRESH!

Howard Black

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