Hidden Costs Of Restaurant Marketing

Restaurant owners have many things to consider when opening a restaurant. They are likely to plan for large expenses such as rent, restaurant equipment, staff, and food. But many new owners don't factor marketing costs into their budget. The problem comes when the facility opens and they need to attract customers to the restaurant. After they have already factored in the operating costs, they should include the marketing costs in their budgets, which will cover the entire operation.

Your new restaurant may serve the best food in town, but if no one knows about it, you'll never have enough customers to stay in business. Creating a marketing plan for your restaurant and setting aside money early on is essential to increasing your chances of success.

It is worth keeping in mind the costs of the restaurant's secret marketing

When budgeting, it's important to identify the hidden costs of restaurant marketing, including offline marketing and digital marketing strategies. If you map out your expenses early in the planning process, you won't have to worry about going over budget.

Here are some hidden costs that may appear when promoting your restaurant.

1. Creating a website for restaurants can be a hidden marketing expense.

Everyone knows that an attractive and user-friendly website is the first step in promoting your business. ​Although today's web builders make it easier than ever to create a website for your business, a website is not free.

Behind-the-scenes costs for a business website include hosting fees, website building platform, domain name, and more. includes. The best web builders and design services often offer custom templates and e-commerce features, but these services will cost you more. Some fees, such as template creation fees, are one-time costs. Other fees, such as website hosting, may be monthly.

The best web and cloud hosting services often include domain name registration and professional design services.

2. Software development can be a hidden marketing cost for restaurants.

Since COVID-19, diners have had less face-to-face contact with restaurant staff. According to Deloitte research, 57% of customers prefer to use a digital app to order food for takeout or delivery. Even 64% of guests prefer to order digitally at a quick service restaurant (QSR).

If you offer pickup or delivery, or have a fast food or fast food restaurant, consider the cost of developing mobile apps or in-store kiosks. Restaurant app development typically costs between $2,000 and $8,000, although it can be more depending on the feature. If you have booths, include equipment costs (even if you have less staff).

If you are not a master programmer, consider using one of the best builders and development services for your restaurant app. If you're interested in creating inexpensive apps with an easy-to-use drag-and-drop interface, consider Zoho Creator.

3. Direct mail and email can hide restaurant marketing costs.

Direct mail and email campaigns are a great way to show your business to customers and promote upcoming events or sales. While both are effective ways to promote your business, costs can add up.

If you have the budget, use one of the best email marketing services to increase the ROI of your restaurant's digital marketing investment. Inexpensive small business plans start at $9.99 per month. (For more on this budget email marketing service, read our Constant Contact review.)

If you want to incorporate direct mail into your digital marketing, be sure to budget for printing and postage, which can cost hundreds of dollars a month.

4. Use social media marketing.

Social media marketing is a great tool to promote your restaurant. The most effective way is usually a combination of organic posts and paid advertising on social platforms.

However, with so many advertising platforms and options available, tackling social media marketing on your own can be confusing and time-consuming. Hiring a social media manager can be a cost-effective solution that offers great benefits. Successful social media marketing is worth a smart investment.

Social media marketing is one of the best ways to increase your restaurant's bottom line because it allows you to build relationships with your customers and keep them coming back.

5. Loyalty programs and discounts are hidden marketing costs for restaurants.

Business owners also often overlook the costs associated with discounts and payments. For example, if you run a customer loyalty program that offers a free sixth meal, you should treat the cost of the "free" meal as a marketing expense and budget, respectively. The same goes for contests, popular giveaways, and other discounts.

Tips for restaurant marketing budgets

Marketing your restaurant is important, but so is a reasonable budget. Here are some tips for a restaurant marketing budget.

• First, spend more on marketing. no one will recognize you when your restaurant is new. To build awareness and attract customers, it makes sense to spend more initially. Once you have satisfied customers, you'll start getting repeat customers, good customer reviews and referrals, and you'll be able to lower your costs. First, think about discounts. According to Vericast, more than half (54%) of diners say coupons and other offers encourage them to try a new restaurant.
• Allocate a percentage of your revenue to your marketing budget. a good rule of thumb is to spend about 3-6% of your revenue on marketing. While this is a guideline, you should only deviate from these numbers for a good reason. If there will be an increase of more than 6%. Hopefully, the extra money you put into marketing will increase your sales and keep your profit margin under 6%.
• Consider seasonality. the restaurant business is often seasonal. Spending too much on marketing during off-peak times is a mistake. Restaurants should use a seasonal marketing strategy, spending more during busy seasons and less when business is slow.
• Use buyer personas. the best way to waste your marketing money is to take a shotgun approach instead of a target approach. Create a customer persona for your audience and understand where they are and what they want. For example, suppose your target customer is a professional who works nearby and needs a place for a business lunch. In this case, consider handing out menus or flyers to nearby businesses instead of advertising on Facebook. If your target audience includes millennial parents looking for a casual family restaurant, consider advertising on Instagram or direct mail.
• Make sure your marketing efforts are trackable. No matter how you market your restaurant, make sure your efforts are trackable. Tracking social media and other metrics shows which marketing channels and campaigns are effective and which may be declining.
• Start your marketing efforts slowly. Consider the slow start of any marketing campaign or project. A careful start helps avoid hasty decisions and mistakes.
• Get creative with restaurant marketing. Creative marketing helps you spend less and get results.
• Constantly update your marketing efforts. You need to keep reevaluating and updating your marketing. You can't just install it, forget it and expect it to keep working for you.

The National Restaurant Association has predicted that restaurant sales will grow to $898 billion in 2022 due to increased demand, making it a great time to take your restaurant marketing to the next level.

Where should you spend your restaurant marketing budget?

After you've been in business for a while, consider dividing your marketing budget into a 70/20/10 model.

• 70% of your restaurant's marketing budget. The majority of your budget (70%) should be allocated to marketing methods that have been most successful in the past.
• 10% of your restaurant's marketing budget. Then 10% of your restaurant's marketing budget can be used to test brand new approaches. You should not expect an initial return on this investment.
• 20% of your restaurant's marketing budget. The remaining 20% ​​is spent on the marketing you tested in the previous 10%. Every time you try something with 10% of your budget and it works, move it to the 20% budget zone and then try something new with 10%. So you're constantly trying new things, spending most of your budget on what you know works.

Restaurant marketing is critical to success

Marketing your restaurant is critical to business success. While marketing can be a big expense, it's not something you can afford to ignore or leave out of your business plan.

When creating your overall business budget, carefully review your marketing plan to identify hidden costs. You can save yourself time and stress by agreeing to contingencies early in the process.

165 - Restaurant Marketing Tips for Restaurant Profitability