Episode 14 – Restaurant Trends for 2016

Delivery, Restaurant


*** UPDATE : You can also check Restaurant Trends for 2017 ***
and Restaurant Trends for 2018


In Episode 14 of Secret Sauce, we look at the forces that are impacting owners of single location restaurants and small chains.

The factors we discuss are the companies operating in the industry, the evolution of the internet and changing consumer tastes.

The trends that we are seeing as increasing in importance for 2016 are:

  • Story driven Restaurants
  • Niche targeting – some restaurants do a great job of targeting a niche
  • Divergence between low cost / profit restaurants and high profit restaurants
  • No bookings
  • Smarter marketing
  • Menu engineering
  • The rise of the celebrity chef

Have a listen and see if you are being affected by these trends and how you can better respond to these trends and have a (more) profitable year in 2016 than in 2015.

Resources mentioned in the podcast:

Free Online Restaurant Booking system – Take bookings from your own website free and build your database.

Free Restaurant OnLine Ordering system – Take orders online from your website for free and build your database.

Both are great tools to grow you Restaurant marketing databases and to cut costs in your restaurant.

Right click here and save-as to download this episode to your computer.

Podcast transcript on Episode 14 – Restaurant Trends for 2016

James Eling: Hey, it’s James from Marketing4Restaurants and welcome to episode 14 of Secret Sauce, the restaurant marketing podcast. Restaurant trends for 2016.

James: So, welcome back everyone. Happy new year, we’re recording this on the 1st of January and I thought what better topic to talk about today than the restaurant trends that we see are going to be big in 2016. And these are the restaurant trends that are going to affect the mum and pop type restaurants. We’re not talking about the big chains, we’re going to be talking about the people who are running single location restaurants or you’ve got a couple of restaurants differently branded, or a small chain. What are the big factors that are going to be affecting you and how should you respond to those changes? So, first off though, 2015, what a massive year. It’s been a really big year for us and it’s been a really big year for the restaurant industry in general. For us, we ticked over two million data points in out big data warehouse.

So, basically, they are individual visits to some of our restaurant owner customers from the websites. Really giving us a huge data set now, which we’ve got engineers trawling through to try and work out what are the big factors that work in online marketing for restaurants, and which ones don’t. And there’s some really interesting data that’s coming out of that. It’s a continuation of our reports that we do, the amount of people who are using mobile and that is just continuing to increase. I don’t even know where that’s going to plateau. So, we’ll probably do that in the next four to eight weeks, we’ll produce another report just to give everyone an update on where it is. But it’s north of 50 percent of people going to the average restaurant website on a mobile phone. So, really interesting as we go through all of it, we’ve got over two million visits which is a huge dataset. So, we’re starting to find some interesting things. We booked over 300,000 seats with our Free Online Restaurant Booking System (FORBS). Really starting to get traction with that. A lot of people just really keen to start building their own database and to be able to take bookings online.

And probably the most exciting thing for us in 2015 is that we finally release FROLO, the Free Restaurant OnLine Ordering system. I know a lot of restaurants are paying a fortune in commission every month to a lot of the people operating in this space, the Menulog, the Just Eats, the Eat Now, Grub Hub, Eat24. All of those guys charging really large commissions. In some respects, there’s not a lot of competition between them because the commissions seem to be going up which is really quite scary. The most insidious part of the whole business model that they’ve got though, is that often they don’t share the email address for the customer. You get the address, because you’re going to deliver food to them, but you don’t find out what their email address is and if you don’t have the email address you’re not building your database, you’re building someone else’s. And that’s a really big problem.

And that’s why FROLO’s proved to be so popular, really working, so it’s working really well. We’ve got online payments working through Stripe, which means that restaurants are now able to get the money in around four to five business days and we’re going to see if we can make that quicker, working with Stripe on that. That’s really exciting. The most exciting thing though, is we moved into a brand-new building, a beautiful 520 square metre office. We’ve just been growing so much, we’ve added more people and I think we’ve probably tripled the head count in the last 12 months up to about 12 people in the team. Very exciting. We’ve now got a really nice office and I’ll actually put a picture up of where I am podcasting here on new years day. It’s nice and quiet, got quite a nice view in sunny Carrum in Victoria, in Australia.

One of the exciting things that we’ve been able to do, which I did yesterday is we mounted, we’ve got 43-inch 4K TVs and we’ve put them up on the wall. That’s going to be the pivotal part of our marketing operation centre. With that what we’re going to be able to do is to put all of the information for our company, so things like Twitter fall, analytics across all of the customers that we’re monitoring and be able to see it all in real time. So, when we run a campaign for a customer we’re going to be able to see exactly how well it’s working. So, that’s really exciting. For the industry it’s been a really big year, too, and I think in Australia the biggest thing that has happened has been consolidation. So, there’s been some very big moves. Open Table has finally, so they entered in January really of 2015, and they then went and bought Res Pack. So, they’ve then been integrating their booking system somehow into Open Table, so they’ve just started taking bookings. Similar model, for those in Australia, very similar model to Dimmi. Not too sure what the pricing is going to be like. Tends to be fairly expensive in the United States, so it is going to be interesting to see what their pricing is like and how successful they are.

Of course, Dimmi bought out by Trip Advisor, that’s a big play. No one’s really sure of how much money it was, it was rumoured to be around 20 million. I’m not sure, it might have gone for a fair bit less potentially. Because I think that they really had struggled to grow their business. They raised quite a bit of money from Telstra and Village Roadshow, but the interesting thing is that three years ago they two and a half thousand restaurants and now, when they were bought out by Trip Advisor, they still had two and a half thousand customers. So, they’d raised over 10 million dollars and not added one single customer, which I thought was pretty amazing. Literally, you could have opened a couple of restaurants and you would have at least had two extra customers. So, just goes to show how tough that market is on the online booking space.

And I think it’s because a lot of restaurant owners are realizing that they don’t want to be sharing their customer contact details with someone else. Of course, the big consolidation that happened, and this is probably on a global sense, was Just Eat purchasing Menu Log. Just before that Eat Now and Menulog, both online ordering companies, very similar business models, they merged and then the combined entity was sold onto Just Eat for an amazing 861 million dollars. Now, the really scary thing about that is that why would someone pay 861 million dollars? Obviously, they’re planning on making a lot of money out of Menulog in Australia. The number one thing that they’ll be doing is raising commissions with that, and we’ve already started to see some of the moves to raise commission. It’s going to be interesting to see if that pays off, I just don’t think there’s enough restaurants in Australia that do takeaway to be able to support those kind of numbers, not unless they’re charging 20 or 25 percent commission, and that’s clearly unsustainable.

So, it’s going to be very interesting in 2016 to see how those sort of big three moves in the Australian market how they play out over the next 12 months. So, the factors that are creating the restaurant trends for 2016, as we see them. This is just what we’re seeing in the market place, how do we think it’s going to effect it. So, I think that there’s three big factors. The first one is the big companies that are operating in the industry, and by that we’re talking about the Open Tables, the Just Eats, they’re obviously going to be aiming to increase their earnings this year. That’s a big thing for them. But Just Eat in particular, to be able to justify that price, obviously commissions are going to go, which means that’s going to hurt everyone who does takeaway in Australia. That is one of the factors that’s going to feed into what we see is happening in the restaurant industry. Not just in Australia, but also worldwide because a lot of the things that they’ll be doing in Australia are also going to play out.

Just Eat’s a pretty large company, very similar business model to Delivery Hero and of course you’ve got Grub Hub and Eat 24. The next one that I see is the evolution of the internet. Now, the internet’s been around for donkey’s years, and we’ve all known that. But I think that in the old days of restaurant marketing you had your Yellow Pages ad and you always have a bit of an argument about how much you’re going to pay with your ad for the Yellow Pages rep. But then that was your restaurant marketing pretty much for the whole year. Now, obviously no one’s advertising in Yellow Pages anymore. Restaurants have really struggled though, to work out where to put that spend. I mean, some restaurants were spending $20,000 a year, sometimes north of that. But as they found that they weren’t getting the same response, they cut the $20,000. But a lot of them have struggled with what are they actually going to do with their marketing budget, and we are seeing now a lot more restaurants are getting very savvy with the internet. And this is also one of the things that’s leading into the changes that we’re seeing in the industry.

Lastly but not leastly, we really need to think about our customers. So, the people who are coming in, the people who are ordering from us, what is it that’s happening with them. So, you’ve got obviously TV. TV in Australia is a very big driver of consumer tastes, so people are becoming a lot more adventurous. They’re seeing all of the things that they’re cooking on things like MasterChef [Australia], and they’re willing to try those creates a bit of an experience for them. Things like paddock to plate we’re seeing as being very important, as well. Fresh locally grown ingredients. Now, these have always been around, but we’re seeing more and more people looking for those kind of restaurants and those kind of restaurants being more and more successful. And one thing in the restaurant industry is there’s a lot of people who are fairly agile, they like to change the theme or change restaurants every three or four years to try and keep ahead of the trends.

This is where we’re seeing people trying to actually hone in on those consumer tastes. It’s very difficult now if you just open a hamburger joint. We’re in Melbourne and Melbourne’s going through a hamburger renaissance at the moment, there’s lots of hamburger joints starting up and we’re seeing a lot of them struggle, as well. Even though like the economics of hamburgers are really good, they’re pretty high margin and your costs are a lot lower than with a traditional restaurant. But some people are opening the restaurants and just because they’re just cooking a normal hamburger and, you know what, they’re pretty good but they’re not able to command the prices that a lot of other people are. And they’re not creating the experiences that a lot of the other hamburger places are creating. So, they are struggling. So, it’s really about the way that you package up that strategy that you’ve got to try and hone in on the consumer taste that you want to.

Restaurant trends for 2016 #1: Story-driven restaurants

So, the first trend that we are seeing is related to that: story-driven restaurants that create experiences. We’re seeing the people who are doing paddock to plate and people have talked about that, but there are people who are really trying to package up that story and deliver that to the consumer in a way that means that the person who actually comes to the restaurant gets a much better experience because they’re actually understanding what it is that’s being done in the kitchen and in the purchasing of the food. But also, it’s forming a critical part of the marketing plan.

So, if you’re looking from a procurement point of view, we’re going to see more and more talk about farmers or fishermen, or anyone who it is in your supply chain. Where is it that you’re getting your cheese from? What’s special about that cheese? How do they create a cheese that’s really special? And then what do you do with that in your restaurant? So, the cheese pairings with the wine, or the uses ingredients in the meals that you’re going to serve up. That is a really big part, that’s becoming to the fore in the marketing plan and in the strategy, you know, sourcing great product but telling the story about what makes that a great product. The fact that it’s coming form organically farmed cows and it’s only 30 kilometres up the road, and here’s a picture of the farmer and he’s been farming cattle there for 30 years. That creates an experience and it creates an affinity and it creates that sense of community. And these are the kinds of things, and this is just one example of the kind of story driven restaurants that we think are going to be really successful.

And of course, you see this at the top end of town, you know, it’s the Jamie Oliver type thing, Heston Blumenthal. More and more people who are taking those kind of routes to create a real story about their restaurant. I think it’s really hard these days if you open an Indian restaurant, unless you’re in a location that doesn’t have a lot of it, it really is hard to differentiate yourself. And that’s why we’re seeing people experimenting with things that they can come up with that add to the story about their restaurant.

Restaurant trends for 2016 #2: Niche targeting

Restaurant trends for 2016 #2: Honing in on that, niche targeting. We’re seeing some people who are being really successful in targeting a niche, or multiple niches. Rather than just setting up a generic Italian restaurant, what is it that’s specifically interesting about your restaurant to a small group of the public, of the diners. And this is the, I think the really big important message out of this is that you can’t please everyone all the time. If you aim your restaurant at everyone then you’re going to struggle because it’s going to be fairly bland. Is it an Indian restaurant that’s targeting people who like really, really hot food? You know, that’s one of my pet little peeves is when you go to an Indian restaurant, often you ask for it to be really, really hot, I like hot food, I love it. You ask for it to be as hot as possible and it comes out and you think, “Yeah, they tried.” But it’s not really that hot. I was eating in a Thai restaurant, Lex Thai in Lenox Head which is where we went for our holiday. They had amazing food, I thought the food there was really amazing. Very beautiful, there was about 8 or 10 of us who ate. We all picked a meal and we just sort of shared them all around. Amazing flavours, great diversity. But if I had one little tiny criticism was the fact that, you know, I asked for it and she said, “Do you want it Thai hot?” and I said, “Yeah, I’d love it as hot as possible.” It wasn’t that hot. But that’s okay. But some people are targeting really hot spicy food. Restaurants that use no genetically modified food. Vegetarian. How are you catering for vegetarians? Do you have a separate vegetarian menu? Do you tell them the story about why you cook vegetarian food? You know, introduce the farmers where the food is grown in an organic field using organic practices. This is the way that you can really a great little niche out of that. So, that’s our second one, niche targeting.

Restaurant trends for 2016 #3: Divergence

Now, three, divergence. Divergence is – and we’re already starting to see this – some people are really struggling with a pricing issue. In that they will be the most expensive restaurant of their cuisine in the area for no discernible reason. The food isn’t better, the experience is the same as everyone else’s, but they’ve just discovered that they are the most expensive. And because of that, because there’s no real benefit to going there they’ll have their loyal customers but they are slowly being whittled away, and new customers are hard to come by because, of course, they’re comparing the menus online and they’re less likely to order from them. So, we’re seeing some restaurants who are being really forced down this cost curve to try and compete on price. Now, I’m not saying that there’s anything wrong with this, there is always a portion of the market that is going to be looking for the cheapest meal possible.

What I’m saying, though, is that it’s a very dangerous place to play because of the fact that you’re not going to have a lot of margin to play with. So, you’re going to rely on being ruthless with controlling your costs, ruthless with controlling your staffing costs, and ruthless on getting as many people getting into the restaurant every night. Because your margins are low, you’re going to need more people in there to be able to make those numbers. Now, one of the things that’s driving this, we see, is the big players in the industry. So, the Dimmi – which is now owned by Trip Advisor – Open Table, Menulog. These guys are all out there generating large databases of customer histories. So, they’re going to know who orders what food on a Friday night. They’ll know how often they order it, how big their order size is. They know where they order from. Same with bookings with Trip Adviser and Open Table. They’re building a database up of individuals so that they can track their spending habits across all of the restaurants that are there.

Now, of course, with all of that data, that leaves you with a really interesting opportunity in that you know when someone, you’ll be able to predict when someone is going to make an order on a Friday night, or when they’re going to make a booking on a Saturday night. And you can predict how many people that will be for.

Restaurant trends for 2016 #1: 4: No bookings

Now, what’s the point of that? Well, of course, these guys make money when someone makes a booking or an order, so what they can do then is they can package up a service to restaurants and typically we see this being targeted at restaurants that are struggling or new restaurants.  A restaurant that’s opened just recently and doesn’t have a loyal customer base, where are they going to find those initial customers from? And so, what these guys will do is they’ll say, “We can fill your restaurant for you,” or, “We can give you $2,000 worth of orders a night.” And what they do is they trawl through their database and say, “Who likes this cuisine in this area? Let’s send them an offer. Let’s package something up.” And of course, what they’re doing is they are taking the loyal customers from restaurants and delivering them to the new restaurant or the restaurant that’s struggling. Now, because what they want to do is they want individual consumers to make an order tonight or to make a booking. And the easiest way to do that is to compete on price. So, what they’re looking for is the restaurants that are able to deliver either seats or orders for the cheapest possible price.

And we’re seeing there are some restaurants out there who are playing this game very, very, very well. They’ll have ongoing campaigns with, for instance, Menulog, driving a large amount of traffic to them, with a large number of orders and they’ve gone through with a fine-tooth comb to take out all of the costs possible. And it gives them a really strong price position, because people can look at it and go, “Wow, these guys are the cheapest,” or there’s a 20 percent for the order type offer, all of these sort of things. It makes it very hard to compete if you’re competing on price. And we’re seeing that. and people who aren’t ahead of this curve, but aren’t delivering on an experience, they’re saying, “Wow, the economy’s pretty quiet.” Well, we’re not seeing that. We’re seeing that there’s some people who are doing really well, they’re delivering cheap food really cheaply. Now, that is one side of the coin.

There is another side to the coin, and that is the people who are getting away from this. The people who aren’t using Dimmi, the people who are building their own database, not using Menulog, taking their own orders online. But, more importantly, so they’re building a database, that’s important but, more importantly, they’re creating an experience. They’re not competing on price. And some people are doing a really, really good job of this. Not competing on price, creating an experience, telling that story. And so, what we’re seeing is that there’s going to be a really big fight at the bottom end of the market with a lot of people.

And the scary thing about this is that some people, unless they’re being really smart about it and actually have a plan to be really cheap, or having a plan to not compete on price, if you’re not in either of those camps, then by default you’re competing on price because you’re not delivering up a great experience. You’re going to be in with everyone else and that’s going to be a real struggle. So, that’s why we’re seeing there’s going to be a continuation of the divergence between those that are focusing on low cost and using places like Menulog and Dimmi to fill their restaurant. And, of course, the big risk is that one day someone might be prepared to offer a bigger incentive to the customers, and they’ll see that as a way of getting more orders or bookings.

And, of course, you may lose that, because the customers are really effectively loyal to the booking agent rather than to the restaurant, and that’s the big problem. One thing that a lot of people are sort of toying with is no bookings. This is at direct odds with what Dimmi say, they say that everyone should be taking bookings. I have to think though, that if I was a restaurant owner, the gold standard for running a restaurant would be a queue of people lining up outside the door waiting to be seated. It’s just easy money. When a table is cleared, you can bring the next table in. So, your utilization, automatically without using any tricks or any hard work, is as high as it’s going to be near much. As soon as a table’s empty, you’re putting someone else in there.

For bonus marks, of course, you’ve got a bar there. “We’re terribly sorry, it’ll be about a half hour wait. Would you like to grab something at the bar, a couple of drinks, before you get in there?” So, you’re driving up the average spend per booking, and your utilization is way through the roof. This is the nirvana, I think, of where you would want to be if you were running a restaurant. And it doesn’t need to be high end. You don’t need to have a bar to sell the added drinks. So, the great example of this is Fergburger in Queenstown. So, I’ve eaten at a lot of places that say that they’ve got the best burger. I’m pretty sure that Fergburger is the best burger in the world, it’s a ridiculously good burger. It is amazingly good. Very professional outfit, and the queue can be 45 minutes and they’ve got a team of people who just go up and down the queue, “Look, still probably about 30 minutes out from ordering. Do you want me to get you a beer?” And they take the money, the go back, they bring back the beer, happy days. They didn’t even had a bar, they’re that tight for space within Fergburger – it’s a hamburger joint, a ridiculously successful hamburger joint, mind you – that they just serve the drinks to the people as they’re queueing up. That’s pretty amazing.

So, what is it that you can do? Nothing builds a queue like a queue. The trick is to actually get to that point where there is going to be a queue, and it literally comes down to the experience that you generate, the quality, the price that you’re charging, and the food. So, great food, great value, great experience. At least pick two and focus on them relentlessly, and then hopefully you can get something. I was talking to someone else who’s been in Queenstown for quite a while and he said that Fergburger was a relatively successful hamburger joint, and there’s a couple of really nice hamburger restaurants in Queenstown, the thing that made a really big difference was that he was listed in Lonely Planet Travel Guide. It was one of the Must Do things in Queenstown that started people going there, more people started going there, then they got a bit of a queue. Then people were queuing up. These burgers are so good that people are queuing up for them and now it can be a 45-minute, 60-minute wait. That’s how you do it, and that’s how you do it in a hamburger joint. So, if you can do it in a hamburger joint, you can probably do it in lots of other types of restaurants. It’s all about coming up with a strategy to drive that.

Restaurant trends for 2016 #5: Smarter marketing

Number five, smarter marketing. I know that there are some really smart restaurant marketers out there, but what we are seeing is that it is now becoming imperative for every restaurant to be thinking about their marketing. Because we’re seeing this divergence, and one of the ways to get out of the divergence is to, like, the first part is you’ve got to have great food, great value, great experience. That’s the first part of it. But you don’t want to have the best restaurant that no one’s ever heard of, and it’s the marketing component that is letting a lot of people down. I think one of the saddest things of my job is I go to a lot of restaurants and I always try to pick ones that aren’t that busy. And you sit down and you eat there and think, “Wow, this is amazing. This food is really well prepared. The wait staff are bubbly, funny, friendly,” or super professional, whatever it is that they’re trying to deliver on.

And then, at the end of the night, you get the bill and you look at it and you think, “I’m almost embarrassed to pay this. It should be, they should be charging 50 percent more for this.” They’re just not marketing. They’ve got the best restaurant that no one’s ever heard of, and that’s the restaurant that you don’t want to have. There are so many ways now that people are able to market their restaurants better, whether it’s with great Facebook marketing and advanced Facebook marketing targeting email lists and things like that or whether you’re building a smashing Instagram account. Are you using Pinterest? Is Twitter working for you? My guess is probably not, because we don’t see it working for very many restaurant owners at all.

But Facebook definitely has got to be the go-to social media marketing strategy. Instagram, I find, is hit and miss. I struggle with Instagram. It is tough going. Pinterest is quite interesting, literally. Seems to work, I think it seems to be working in one of our little side projects. I created a Pinterest account, I actually forgot about it and I was analysing some traffic numbers. It’s for a very big website, it gets nearly 200,000 visits a month, but it’s actually driving more traffic than Instagram.

Now, the interesting thing is – and by more traffic I’m saying it drove 32 visits last month as opposed to 20 which, for a website that gets 200,000 visits is nothing. But the interesting thing is I actually forgot about the Pinterest account. It’s like 12 months old and I’d actually been working fairly hard in Instagram overly the last 3 or 4 weeks. Interesting. Now, whether it scales up, whether when your Instagram account becomes really large, whether it overtakes Pinterest, I don’t know. We’re working to try to find that out, and we’ll report back to you when we do find out. But interesting, the way that people are using the online tools, like Facebook and Instagram and Pinterest, to be able to drive more traffic into their restaurants. And of course, the website. The website really is a fundamental part of that. And we see people who are just absolutely crushing it by having a strategy about their restaurant, targeting a niche or multiple niches, and then having a really good SEO strategy around that. We’ll talk more about that in a future podcast, because it is something that we see people still struggling with not really being able to articulate that story in two ways – in a way that makes sense for people who are looking at the website, but more importantly in a way that makes sense for Google so that Google knows exactly what it is that you are talking about.

Restaurant trends for 2016 #6: Menu engineering

Six, the sixth trend, menu engineering. Is 2016 going to be the year of the menu engineer? I think that it really is if you look at the smart marketing that we’re talking about. Facebook, Instagram. That then feeds into what is it on the menu, I mean, people are going to take pictures of themselves at your restaurant. That’s a given, but that’s not going to sell, that’s not going to get people to come into your restaurant. You need to build something that looks sexy on social media, and that something needs to be well menu engineered. You need to have the costings done for it, because if you create a dish and you sell 10,000 of it because it looks awesome on Instagram and everyone all of a sudden wants to have, and if you don’t make money out of that then you will go out of business. So, costing the menu.

See, I think you’ll pick up on one of the things that we’re seeing here is that we’ve got seven trends, they’re all interrelated. If you’re going for the low end of the market for takeaway, have you costed your menu? Because I’ll tell you now, there are people out there who do cost their menus out and they know exactly how much each meal costs to get out the door. And if you think you know how much it is but you haven’t actually done the numbers, then you’re at a massive risk of selling product – I always ask this question, “What do you make the most money out of here?” “I don’t know, we sell a lot of these.” “No, no, no, no. On a per dish basis what do you make the most money out of?” You need to know that. That is the foundation of menu engineering. And I know some people create something that looks awesome and then they try and work it out so they can make sure that the prep time isn’t too long, because that’s one thing I think you need to factor in, as well. That’s something that doesn’t get factored in is prep time. How long is it? Is it too fiddly for your restaurant? Is it too fiddly for your kitchen? Is it going to take up a burner for too long? And then the food costs. What can they substitute to try and get the costs down?

If it looks great, it’s going to command a high price. You don’t want it to be a high cost item though. Perfect world it’s something that is in demand, that people pay really good money for, that costs you next to nothing to make, and that you can do quickly. That’s the perfectly menu engineered item, that’s what everyone should be thinking about. So, menu engineering, I think everyone, that should be your new years resolution. It’s not too late to make one now. If you haven’t costed your menu out, get out there and cost it. I’m working on, and I’ve been working on it for a while, but I’m actually working on a big podcast literally just covering menu engineering. Because I know there are people who crushing this, they’re doing so well. It’s just ridiculous how well they do with it.

They are the top quarter of a percent. Most people I see, they just don’t know. They literally do not know what they make the most out of on their menu, what they should be driving people to. If you don’t know what your high profit items are, what are your wait staff saying? They could be saying anything. They could be driving to an item that loses money. That’s crazy talk.

Restaurant trends for 2016 #7: The rise of the celebrity chef

Number seven, and this is where a lot of this stuff comes together, the rise of the celebrity chef. So, in the old days you wrote a cookbook, Julia Child-style. You wrote a cookbook and then if it was a good cookbook then you might get to write another one. And then if you wrote a couple, then you might have a TV show. And then you’re a celebrity chef, because you’ve got a TV show. When I talked about the rise of the internet, it’s displacing a lot of things. So, less and less people are watching TV now. So, having a TV show, yes, if you’ve got your own TV show then, yes. Celebrity chef, tick. I don’t think you need a TV show to be a celebrity chef, and I think that the criteria for celebrity chef is also changing. If you can wrap up an experience about how you’ve sourced some great food, some great Indian spices, and you’ve got a chef who’s moderately photogenic, and this is the first thing that you need to think about with the celebrity chef type thing. If you’re not a TV kind of guy, then you shouldn’t be doing video. I see that as a big mistake that some people make is that they’ll be pushing out YouTube videos, and they just don’t really function very well.

Some people write better, so they should be blogging. If you can create a loyal following of two or three thousand people, and you can get their email address and they’re interested in what you do. So, you’ve got your Indian restaurant, you’ve got an interesting story about where you source all of the flavourings, your herbs and spices, where you get your meat from. You’re cooking it in a traditional way, or maybe it’s a different way. And then you can do, like you might do cooking courses. If you can get two or three thousand people who will give you their email address in return for watching some YouTube videos or your blog, you might blog about the techniques that you use. You can get their email address and then you can create special events, “Come along and I’ll show you how I cook a Vindaloo. Tuesday the 17th, come on in and I’ll cook Vindaloo and you’ll cook it, as well, and then we’ll eat Vindaloo.” I’m not putting a lot of thought into that idea, that just popped into my mind as you can probably tell.

But if you’ve got 3,000 loyal followers who go, “Yeah, he’s the guys with the really good knife skills, yeah I’d like to see that.” Then you can fill the restaurant on a Tuesday night and you might be able to run two or three of those in a month. If you can fill a 70-seat restaurant on a Tuesday night then you are well on your way to profitable week. And if you string four really profitable weeks together, that’s a really profitable month. And if you do that in the middle of winter, hey, everyone makes money on the weekends, everyone makes money in summer. The question is how much money are you going to lose during winter and in the quiet nights. Being a minor celebrity chef, whether it’s through YouTube or whether it’s through your blog or whether you can, have you got a cooking book, do you get a TV show?

You don’t need to be known by a million people. I think 5,000 people who are prepared to give you their email address and who are moderately interested in what it is that you do, what makes you different from everyone else, that can make a massive difference. And so, they are the seven things that we see as being the big trends. So, I’m keen to hear your feedback, where you think the industry’s going. What you think you’re going to need in 2016 to make it successful. And if there’s anything that we can do to help, please hit us up. We get a lot of people asking us questions on Facebook, or sending emails to [email protected]. Ask away, tell us what you think. I’m really keen to hear what you think.

This is based on us talking to lots and lots, hundreds of restaurants over the last six months to see how business is going, what it is that they’re seeing as being the opportunities, and also the threats that are coming out from the market place. If nothing else, it’s going to be a really interesting year. So, it’ll probably be a tough year, there’s probably going to be a lot of long hours, a lot of long days, but hey, that’s hospitality. So, yeah, hopefully you’ve got something out of it. With these trend articles and podcasts, I really just want to get you thinking about the possibilities out there. There’s a lot of people out there I see who they say, “We’ve been running the restaurant for 20 years.” And you say, “Well, how’s it going?” And they say, “Well, this has been the toughest year we’ve had,” and that’s because things are changing. And the biggest change that we are seeing is that the rate of change that we are seeing is changing.

There has never been a better time, I think, to start a restaurant because all of the tools that online gives you. But if you’ve been running a restaurant for 20 years, you’ve got to really be thinking about what are you going to do differently in 2016, because there’ll be some restaurants out there who’ll have a completely different strategy from 2015, and they’re only two years old. They will reinvent themselves this year to be able to maximise the number of people that they can get into the restaurant and the amount of money that they can make, and that gives them a really big advantage over the people who are doing the same thing over and over and over and over again. And we see those restaurants, I know there’s a Chinese restaurant in Frankston that we used to go to all the time 10, 15, 20 years ago. And I went there last year and the place was dead quiet, and it was never dead quiet.

But the thing is, it was exactly the same. I actually quite liked it because what was the product I was getting? I was getting nostalgia. We were talking about some of the great meals that we’d had there. But I’ve been there and the food was okay, it hasn’t changed. It was from like 20 years ago. They’re going to struggle and I don’t know how much longer they’re going to be around. Which is sad because they’re a bit of an institution in Frankston. But they’re just not changing, and they’re up against everyone else who is changing. So, all I want to do is to make you think and hopefully there’ll be a little idea, a little bit of a spark about something, “You know what, I’m interested maybe we should be setting up a Pinterest account,” or, you know, play with it.

The great thing with social media is when you it wrong, it doesn’t really matter. I get it wrong all the time. I’ll put things up that I think are going to be awesome and they never work out, and I’ll put some things up that I don’t think are very good and they go really well. It doesn’t cost you a lot. So, as you’re looking forward to 2016, one thing I would ask you to do though, is to have a look at your website.

Does it represent your restaurant in the way possible? Are you able to edit it? Is it optimized for mobile? Has it got great SEO? If you think the economy is quiet, then it’s probably the fact that your website isn’t pulling its weight in what it should be doing in marketing the restaurant. Either that or the service is really bad, but hopefully that’s not your restaurant. It can make a really big difference. One of the big questions that we always get asked is, “So, you’ve got the free online restaurant booking system, you’ve got the Free Restaurant OnLine Ordering system (FROLO), the 5-minute-a-day Restaurant Marketing MBA, the podcast, all of those things are free how do you actually make money?” We sell websites.

But we’ve got a team of 12 people who are building restaurant websites and that’s all they do. We only do restaurant websites. So, when we’re analysing data, it’s restaurant data not anything else. I’m not interested in mechanics or accountants or any other industry, it’s the restaurant industry. So, we’ve got a team that’s dedicated to that and we’ve come up with a range of packages that are really aimed at restaurant owners. Partially, I mean, price, price is a really big issue for so many restaurants out there. We’re not aiming for the top one percent of fine dining, 13-course degustation menus, as much as we love those restaurants. They’re not really our customers. We’re talking about the mom-and-pop type restaurant, and my ideal customer is someone who’s cooking an authentic cuisine and often they don’t speak English very well because they’ve only just come out of the country, and the only thing that they can do is they can cook food like their mother cooked in Italy, China, Thailand, wherever it was.

They’ve got the really good experience in cooking that food, creating those beautiful culinary flavours. They’re our ideal customer and so, they don’t have a lot of money to spend. So, we’ve got packages starting from literally our entry level website where you can go in and edit everything and optimize for mobile, people spend time going through what it is about your restaurant that makes it unique so that we can come up with a great SEO plan for you, is $9.95. And then there’s just a subscription fee, which gives you all of the things like the email database and the comparative analytics. So, we actually answer the one question that no one else can answer, and this is how well is your restaurant website going compared to all of the other ones.

So, we actually send out an email, on the first of the month it goes out, giving comparative analytics saying, “You got these many visitors compared to the average of this many.” So, you actually know whether you’re doing a good job or not, that’s actually really interesting because some people think that they’re doing really well with their website and they’re not actually doing that well. Now, the interesting, we’ve got an interesting promo because we’ve been doing really well in Australia and really well in New Zealand, and we’ve got a couple of other customers in other countries.

We’re running a campaign at the moment. For the first restaurant owner in every country that we don’t have an existing customer in at the moment, if you pre-pay 12 months’ worth of subscription we are waving the $9.95 set up fee. So, we’ll actually build your website for free. First restaurant in each country. So, have a think about that. We think it’s a really good offer. All you got to do is pre-pay the hosting and they range from $50 for the subscription fee, we’ve got a $99 one where there’s more support and a bit more help, and we have a $200 one where we actually spend an hour a month actually helping you with your online marketing. Just one thing that sets us apart from everyone else, I was talking to a restaurant owner a little while ago and he said, “Things have been pretty quiet for us.” And I said, “Did you send a support ticket in?” And he goes, “Why?” And I said, “Because things are pretty quiet.” And he goes, “Yeah, but you do my website.” And I said, “But the website should be getting you traffic. If your traffic, whether we need to tweak the website or whether there’s something else that we can do, we provide support in that.” And he goes, “I had no idea.”

And it’s like, “Helping you find more customers and turn them into repeat customers, that is what we do. Whether it’s the website or however we can do it, we’ll do it.” So, just bear that in mind because I know some people, virtually all of the other companies that produce websites, they’ll ship a website out to you and go, “There you go, you happy with all of that?” “Yup.” “Okay, goodbye.” That’s it. You’ll get your invoice every month for hosting. So, every month, actually, every week on Monday I get an email about all of the traffic for all of our customers. And I look at it and I start picking off the people who are struggling and saying to our marketing team, “You need to reach out to this person and see what we can do to help them.” Literally, and this is why the marketing operation centre put up the big screens.

I want to see the people who are struggling and I want to be able to help them all. So, makes a big difference I think. So, literally, pre-pay 12-month subscription and we’ll wave the thousand dollars. But it’s only for the first restaurant in every country. So, there’s a lot of countries out there. Hit us up, send us an email at [email protected], or send a message on Facebook. And yeah, we’d love to talk to you and love to help you out. Even if it’s just for FROLO or FORBS, happy to help out with that, as well. That’s it, have a glorious day and, more importantly, have a glorious year. It’s going to be really exciting. Bye.

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