Beware! How the biggest myth in the restaurant industry is costing some owners thousands in lost revenue
October 17, 2021
By: Jose Aparcedo
Dragons, unicorns, fairies, and more, the world is full of myths and tales. The restaurant industry isn’t spared from them either. While I am sure there can be some local restaurants that are full of mystical stories of things that happened to people who ate there or even of their respective owners, there is one far bigger myth that the entire restaurant industry experiences on a global scale.
There is a myth far scarier than that of any ghost story, and that is because that myth can be costing independent restaurant owners thousands of dollars (if not millions) in lost revenue every year.
If you ask me, that in itself is pretty scary because to the independent restaurant owner, that money in lost revenue can mean so much. That extra revenue can mean buying a dream home, sending kids to good universities, having a solid retirement account, and taking a family vacation.
I see it too often, talented entrepreneurs and chefs put together all the resources and skills they have to make their dreams and visions come true with a food establishment and a business. Often these chefs and entrepreneurs create fantastic food concepts and experiences in their establishment with the skills and experience they have, putting together a fantastic menu, fantastic service, and a beautiful location. Then, they try a couple of marketing stunts and strategies, such as an opening party, they may even try working with a marketing agency, but ultimately they fall back on one thing, one big myth and that is word-of-mouth marketing.
For those of you who don’t know what exactly that entails, it means getting the people who have tried your food and service to recommend your restaurant to others and hopefully have those people who just heard about your restaurant come and become patrons as well.
Don’t get me wrong, of course that is not a bad thing, and we want that to happen. Of course you need and want people recommending your restaurant but regardless, what is often said about word-of-mouth marketing is a myth, and that is that word-of-mouth marketing is “king” or that it is the best method of advertising and making new customers.
Simply stated, that is not true, and yet many independent restaurant owners rely on it, not just putting their livelihoods at risk, but also that of their families and I’ll explain why.
It is too unreliable, unpredictable, and uncontrollable
Word-of-mouth marketing is as unreliable as the daily horoscope and you don’t always get what you want. There is no way to predictably increase sales on slow days or months. Even if you launch a promotion or offer, even if you do a special event, you are still relying on customers to tell potential customers about your offer, and growth can slow down significantly.
What independent restaurant owners need is a strategy and a system in which they can predictably increase sales on slow days and months and they can have constant growth every month and I will tell you more about one below.
It’s hard to repeat
With low-profit margins restaurants without a doubt rely on sales volume, especially fast food and casual dining establishments. Unlike some businesses that have sales that equal thousands of dollars per transaction, many restaurants have $30 to $60 dollar ticket averages. That means that it’s not just about getting new customers in the door but also having them come back again.
While good food and service greatly help this happen, it doesn’t always occur this way. Without a reliable way to reach out to customers, sometimes life gets in the way and they may move on to the next trending restaurant.
Not to mention, word-of-mouth is even harder to repeat when you want to open up a new location in another city or town because you have to build a reputation and a customer base from scratch.
It feels easy and free but it isn't
When something feels easy and free, it puts people in the “comfort zone” and of course we all know that the “comfort zone” can actually hold people back from success. Word-of-mouth marketing feels easy and free because it works only to a certain extent and it lets the owners or operators of the restaurant focus on other important things like food quality and service.
It can seem like it only requires carrying out the day-to-day operations and people will be walking in to make the restaurant some sales. Even though a restaurant can get sales this way, more than likely it can get a lot more sales, perhaps double or triple, with a solid marketing plan that allows the restaurant to grow and maybe even open multiple locations.
Of course, many people think that something like that requires a tremendous investment, a dedicated marketing team, and a massive effort. While those things can lead to success, there is another way around it all.
Now let's talk about the better way
So yes, word-of-mouth marketing can get results for some but it doesn’t mean there is not an opportunity for more sales and growth. Hiring a team of experts in marketing, like an agency, and investing thousands of dollars in advertising can also help greatly but it is not within everyone’s budget. So the best practice an independent restaurant owner can implement is to set up a list-building strategy using the internet’s biggest platforms where there are millions of diners waiting to discover the next new spot. With today’s accessible and easy-to-use tools, you don’t even need a marketing agency to set this up for you.
Setting up a funnel to capture new customers across the web and build a list actually gives restaurant owners various channels to reach out to them and predictably increase sales, even on slow days and months. It allows restaurant owners to grow their business, spend less on advertising, invest more in their business, and even gives them more free time. I won’t go into detail in this article about how anyone can set this up for themselves but I do teach the process step by step in my free class. If you’re an independent restaurant owner or operator click the link below now to learn more about my class and learn more about building your own predictable sales and review system.
••• You can sign up for a free one-on-one consultation at the end as well.
I can only do a very limited number of private consultations, so don’t wait because space is limited.
About the author
- Hi, my name is Jose Aparcedo, and I spent countless hours experimenting and testing the best tools for marketing restaurants so that you don’t have to.
- I combine communication and marketing skills acquired after years spent in the television industry to help independent business owners take their business to the next level.
- I have worked with hundreds of independent restaurants to help them efficiently expand their brand.