We talk about using Prisma, a new and exciting app available on Android and Chrome to help you create very sharable content for solution media.
Building a free CRM (customer relationship management) system
What is a CRM system, what is CRM – a process for building information about your customers and leads, and your relationships with the customer
The goals of your CRM system should be:.
- Improve marketing effectiveness – decrease the cost to acquire a customer and increase long term customer value. eg fish and chip shop.
- Increased personalized service or one to one service: Identify people for face to face interactions.
- Responsive to customer’s needs: Customers’ situations and needs can be understood by the firms focusing on customer needs and requirements.[
- Customer segmentation:
- Improve customization of marketing:
- Multi-channel integration: Integrating across multiple marketing channels.
- Time saving: Point and shoot marketing.
- Improve customer knowledge: Feedback about the food, experience and value.
Your new CRM system needs to be very cost effective, very time effective and very simple to use. We look at the parts that make up a CRM system and then, how we build a free Restaurant CRM system
Gather information about your customers. Purchases, bookings, , frequency, recency,birthdays, preferences
Big data for your Restaurant. Every Monday we benchmark every one of our customers against other Restaurants. so you know if you are doing great and you have some ideas about how to improve if not.
Creating a unified view of customer information across bookings and orders.
Should be electronic. Called yesterday, had to call back. She didn’t ask for my name. Only three tables in the restaurant. Seventy-five percent is takeaway. Online ordering service that is charging twelve percent. Seventy-five percent of revenue is taxed at twelve percent.
If you are taking bookings or orders and not collecting emails, you are wasting a huge opportunity.
Mailchimp is free for 2,00 contacts . Many of our customers are using that.
Facebook ads, upload mobile numbers or email addresses.
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Episode 31 – How to build a Free CRM system for your Restaurant
Voiceover: Some restaurants are quiet, lose money, and the owner works 70 hours a week. Other restaurants are busy, profitable, and the owners work a few hours a day. What’s the difference? They have a secret sauce. Join James from Marketing for Restaurants as he helps you come up with your recipe for restaurant success, your secret sauce.
James: Hey, hey everyone. Welcome back. What did you think of the interview with Adam Sobel? I think he’s done just an amazing job of being really passionate about what he does and then integrating that into everything across the business. The way that he markets the business, the products that he’s got, the culture that he’s got within the company–everything. Just a really exciting example of how you can build a successful business with the passion that you’ve got for that as the central part. And I think, you know, it’s really sad when you see someone who is running a business and that passion’s runout. You’ve got to really stay in touch with that passion, let the customer see that, let your staff see that. It should be on show for everyone.
Today what we’re going to do is we’re going to talk about how to build a free restaurant CRM (customer relationship management) system for your business. So, we’re going to talk about a couple of things, like what is a CRM system, what are the components that go into it, what would you expect to get out of CRM system, why it’s so important, and then we’re going to go into the actual tools that are out there. So that with very little expenditure, or none whatsoever, you’re able to put a CRM system in place and to be able to start doing some CRM driven marketing campaigns, which will make a really big difference in your business.
Before we talk about that though, I want to talk very quickly about a really cool tool that we’ve been playing with quite a bit at Marketing4Restaurants and that is Prisma. So, it’s an app available on iTunes and in the Google Play store that allows you to take a photo on your phone, or to upload one to your phone, it’s a lot easier if you take it on the phone though, and then apply a whole range art effects. So, it’s similar, in some respects, to the way that Instagram works, but Instagram has a very sort of basic sort of filter set compared to what Prisma can do. And it turns them into a sort of fine art looking image. Now, why is this important? Because I think that you can create an image that looks pretty ordinary, you know, just the produce that you’ve brought in today, you know, you cutting up something, and then create an image which looks a lot more appealing than your basic boring image of something that you’ve taken in the restaurant.
This is a whole lot more appealing from a social media point of view. So, you’re then able to get further reach, more effective advertising, or a cheaper campaign that you can run to reach lots of people in your target demographic. So, have a look, the big thing with Prisma, it’s been out for a couple of months now, the big thing that they’ve just done in iTunes is they’ve released the ability to take a 15-second video and apply that effect across the 15 second video. That is completely amazing. Not available on Google yet, which is annoying because I’ve got a Samsung phone and so eagerly awaiting to see that. We want to be able to run some 15-second videos and see what they look like. I think it’s going to be a really big winner on social media, and already we’ve started to play with it and gotten dramatic effects with that. So, have a look at it. Prisma. I’ll include a link to it on the show notes.
So, CRM systems. What is a CRM system? Okay, so CRM stands for Customer Relationship Management. Now, for hospitality I think it’s a process for building information about your customers and leads, and the relationships that you have with them. This is what you’re front of house person always has done. So, a good front of house person, a good maître d’ he’s going to recognize your regular customers. He’s going to know what their favourite table is. He’s going to know what they like to drink. He’s going to know and be able to pre-empt their needs.
What a CRM system allows you to do though, is you’ll know, if you’ve got someone who’s great front of house, you’ll know that the level of service slips when he’s not working. Now, that’s not great. A CRM system allows you to systematize that process, so that people will be able to understand that this person coming in is a high value customer. This person who has just ordered, they order very frequently from us. And so, when a, you know, a customer rings up to complain about something, or they ring up with a request, it gives you more information about how you should respond to that request. In the old days, it was literally just the maître d’, or the restaurant owner, and the fish bowl, you know, put your business card in here and go in the draw to win a free lunch.
Now, the big thing about that, I find, is that you don’t actually know who that business card belongs to. I mean, you know their name, but you may not be able to put a face to that name. You may not be able to recognize the behaviour pattern that they have. A CRM system integrates all of that into one big thing. And my biggest criticism of the fish bowl is that when I see one I’ll often put my business card in, just to see what comes out, and I’m amazed at the number of times I never hear anything from that restaurant. And I think it’s because the business cards go into the fish bowl, and it’s all just too hard to be able to put – you’ve got to put them into some sort of email system, and then you’ve got to email out, it’s a lot of work. A CRM system for a restaurant I think it’s got to have a couple of needs.
One, it’s got to be free or very cost-effective, very cheap because of the fact that margins are very low, and there’s lots of CRM systems out there and a lot of them cost thousands of dollars every month. Because of the fact that, if you’re selling, you know, train locomotives or aircraft or something like that, you know, you can spend $2,000 or $3,000 a month just to organize all of your leads. And it makes perfect sense for you, because your sales people are going to be very expensive. In the restaurant industry there’s not the profit and there’s not the number of high value customers generally that warrant a significant investment in a CRM system. It needs to be very quick to use. Because restaurant owners, you know, what the most precious asset in most restaurants is time.
The person who’s going to be doing the marketing, generally the business owner, doesn’t have a lot of time, so it needs to be very quick to be able to use, and it needs to be easy to use. No one wants to spend, you know, a day trying to work out how to get a report out of their CRM system. So, very cost effective, very quick to use, and very simple to use. They’re the things that you want to be looking for in a CRM system. One example of great CRM, now we’re going to talk about whether is this CRM or is it just general customer service, and I think there’s a blurred line between where customer service ends and CRM starts.
One of the great things about my job is I get to travel the world and eat in lots of different and amazing restaurants all around the world. And earlier this year I travelled to Sunworld Dynasty in Taipei, and the great thing about that is that they send a car to pick us up from the airport. As we were coming back, and there was a few of us who were coming back, we were talking about what we were going to do while we were in Taipei and, you know, how business was going and all that sort of thing, the general chit chat you have. I knew most of the people in the car with us.
Now, the interesting thing was that the concierge there, as he came up to the car, he said, “Hello Mr. Eling, it’s great to have you back.” Now, I’ve stayed at Sunworld three times, this was the third time. The people in that car were looking like, “Wow, what’s going on here?” You know, because it made me feel like, “Well, hey, it’s Mr. Eling of course, why wouldn’t he greet me by name?” I don’t know, maybe he did remember me from 12 months ago, I think that’s highly unlikely. I think what’s a lot more likely is that he’s known who was being picked up from the airport, he knew the vehicle that went out on the airport run. And he’s looked at it and he’s said, “This guy here has been with us, he’s stayed with us before. I will greet him.” And so, the cars come up, he may have even had the name written down and he’s had a look, “Mr. Eling, yeah I recognize that guy.” Who knows. They may have gone and reached out to LinkedIn and had a look at my LinkedIn profile. “Yup, that’s the guy. Mr. Eling. It’s great to see you back again.”
Now, the thing was, the product, and you think about what a hotel does, you know, they’ve got all those expensive rooms. All of the infrastructure that goes along with that. The best part of the product that I received was that moment when everyone was like, “Wow, James really is quite important.” And you could see, “They greeted him by name, that’s really quite amazing.” This is what a CRM system allows you to do. Now, I don’t know what CRM system they use, I don’t know whether he just Had a running sheet for the vehicle that was going out. But when we’re talking about a CRM system, I’m talking about, you know, the bits of software, I’m also talking about the processes that you use. Because one of the things that you need to be very mindful of is that when we talk about a CRM system, we’re talking about software, but we’re also talking about the process. Now, I don’t know, I doubt that this happened, but he could have looked on his mobile phone and thought, “So, this flight has just touched down. It will have Mr. Eling on board, he stayed with us twice previously. Last time he was here he needed to borrow a power cord,” I think it was the second time I needed to borrow a power cord. He may have had all of that on his mobile phone.
If they’d made that massive investment in a CRM system that told him all of those sort of things, if he didn’t greet me by name it’s all pointless. So, it’s a combination of the system to gather that information, but then to be able to use that information. And whether it’s greeting people at the door, whether it’s serving their favourite cocktail to them, whether it is reaching out to them with some targeted marketing. If you’re not doing those things, then there’s no real point in going down the CRM path. The thing that I would caution you against though, is that there are a lot of businesses out there that are CRM and marketing heavy. They are leading with that as a component of their restaurant and because of that people are expecting a higher level of experience when they go out to those restaurants. It might not be enough to smile at the customer who you know is a regular. He may be expecting to be able to say, “The usual.” You know, he may be expecting that. And he may go back to the restaurant that does give him, “The usual.”
So, what do you want to get out of your CRM system? The first thing, I think, the number one thing is to improve marketing effectiveness. You’re going to be able to decrease the cost to acquire a customer and increase the long-term value of that customer. So, your long-term customer value is going to come about because someone goes to your restaurant and they make a booking or they place an order, you collect those details. You can then market to them. Now, all of this of course assumes that you’re providing great value, great food, a great experience – the three Gs of restaurant marketing. You’re doing all of those sort of things. Because it’s such a jumbled-up world these days, you need to be working hard to remain top of mind with your customers. So, you might be sending out a campaign that says, “Order from us this Wednesday night. Make a booking this Wednesday, we’re running this special,” or, “We’re doing a food and wine pairing night,” whatever it is that you do. Long-term customer value, I think it’s something that the restaurant industry doesn’t do a great job of understanding in general.
Talking to a fish and chip shop owner they said, “You know, average customer spends, you know, $35.” It’s like, “Do they?” And this was our local fish and chip show. Now, we eat there every, I don’t know, two or three weeks and we spend $40. So, if it’s every three weeks, that’s nearly 20 times a year, that’s $800 a year. And we’ve been in that neighbourhood for eight years, that’s $6,500. Now, I don’t think they know that we’ve probably spent, that’s a scary number isn’t it, I don’t think that they know that we’ve probably spent north of $6,000 with them. They certainly don’t greet us with a big hello or anything like that, decreasing your cost to acquire a customer. The people who’ve made a lead, the people who’ve tried to make a booking. You’ll be able to remarket to those people. The people who have gone to your website but didn’t actually come in. you’ll be able to remarket to those people. So, improving the marketing effectiveness, that’s the first thing that you want to be able to do.
Increase personalized service, or one-to-one service. You’re going to be able to remember things like someone is gluten free, or someone’s favourite cocktail, or when their birthday is, their favourite meal, their wife’s name, their anniversary. All of those sort of things, they’re the kind of things that you want to put into a CRM system. This increase personalized service is so important.
So, I’ve spoken about Roy the concierge, I think his name’s Roy, the concierge from Sunworld. When we ate at Alinea, and so Alinea without a doubt is the best food that I’ve ever eaten and it is in a class of its own. And people say, “What’s the best restaurant eaten in?” And I say, “It’s Alinea in Chicago, I completely loved it.” And then the next question that people ask me is, “What was so good about it?” And they’re expecting me to say, “You know, the way that this was prepared,” or, “The food that was hidden under the log that was burning and cooking the other food, you know. The surprises of the food that was up above the table.” All of those sort of, you know, the tastes, the experience. When we came in, they said, “Mr. and Mrs. Eling it’s great to have you here all the way from Australia. What brings you to Chicago?” And I said, “You know, I’m here for the National Restaurant Association (NRA),” and, you know, there was some polite talk about what we do. Halfway through the meal I excused myself to go to the toilet, and as I was coming back there was a group of waiters and waitresses standing there and they parted before me like the sea before Moses.
And one of the waiters who wasn’t from our section of the restaurant said, “How is the evening going Mr. Eling?” And I went back to the table and I said to Tina, I said, “Wow, this is what it is like to be a movie star.” Someone who I have not seen at all tonight just addressed me by name. Now, that’s the story I tell about Alinea, the process that they have taken to be able to generate that awesome customer service. Which I find amazing because for us, and I’ve spoken to other people, as well, and the attention to detail when it comes to the customer service, absolutely amazing there. The CRM process and system that they’ve got completely kills it. And it’s that personalized service, that is what you are looking for to be able to generate. Now, and I know most of the people who listen to our podcast they’re not running Alinea. It’s not, you know, however much it was per head. And you’ve got to think about, we always talk about great value, that is the most expensive meal I’ve ever had by a factor of probably three or four. The next morning though, Tina said, “Can we go back there?” The value was enormous, and partially because of the experience. The food was immaculate, clearly the best.
Creating that experience, that really helps out with that value equation that you want to be working on. So, your local Chinese restaurant, if they can say, “Mr. Eling it’s great to have you back, would you like the usual?” They’re the kind of things that you want to be able to do because it’s such a tough market these days that they’re the kind of things that you need to be doing to be able to create some sort of clear messaging that puts you head and shoulders above all of the other Chinese restaurants that are out there. Responsiveness to customer needs, that’s the next thing that you want to be able to do. When a customer has an interaction for you, if you’ve got more information about them then you’re able to better service their needs. Now, what if someone who in the last 12 months has booked 4 times and has booked 30 seats each tome on a Wednesday.
Now, so they’re probably a corporate heavy hitter. And they’ve said, “Is there any chance of a late minute table on Saturday night for two?” Now, in general you might say, “Well, no I’ve got a few tables set aside for walk-ins.” The critical thing to know is that this person has booked 120 seats in the last 12 months. “Absolutely, please come in.” I think it’s well and truly, it’s so important. When they come in, “Would you like some complimentary champagne tonight? We appreciate your business so much.” Now, you have identified that they’re a really, really important customer and you’ve given them some free champagne to start the night off. That is the value of great customer service. Responsiveness to customer needs.
Customer segmentations. Now, customer segmentation, I think, is a really important part of your marketing mix. We’ve spoken about the Facebook avatar grid. One example I’ll give, and this is some marketing that I did probably about 12 years ago now. You can tell it’s old, it was direct mail. I sent a letter out to a market segment, now these weren’t customers, this was a cold letter. I had an 83% response rate from that. Which was amazing and when it happened I thought, “I should just give up marketing because I don’t think it’s ever going to get any better than that,” and it pretty much hasn’t. An 83% response rate. Now, the sad thing was I only sent out 12 letters, but I had 10 responses. Nine of them were ringing up to inquire about the services that we offered. One of them was saying, “Who wrote your letter?”
So, I’d used a templated letter that I’d found off the internet, a templated sales letter. What I’d done is I’d sent a letter to a group of business coaches, action business coaches, and I’d said, “Are you using a CRM system for you and for your customers? We’re experts in goldmine CRM.” Now, what I didn’t know was that they all used goldmine CRM, and they were all having huge problems with it. So, I had a very targeted message at a very targeted group, and I had an absolutely amazing response rate with that. This is what you want to be able to do. So, you want to be able to work out the people who make large bookings, the people who book frequently, the people who book only on a Saturday night, the people who come in during the week, the people who have lunch, the people have order online, the people who order online frequently, the people who haven’t ordered online in the last one, two, three months. The people who respond to campaigns, the people who like your food pairing nights, the people who don’t. The CRM system will be able to give you that and, when you segment, your marketing’s going to be a whole lot better. The customization of your marketing will dramatically increase the effectiveness. You don’t want to be sending off, you don’t want to send a 20% offer to everyone. Because there’ll be people who are going to order from you who are going to order from you on Friday night anyway. If you send them a 20% off discount, you just gave away 20%. Now, who can afford to give away 20%? What you want to do is identify people who have ordered more than three times from you, so they like the food, but for some reason something’s happened and they haven’t ordered in the last three months. That is a sub group. “Hey, customer, we miss you. It’s been a while since you’ve ordered. What we’d like to do is to tempt you to come back this week with a 20% offer. Just enter this when you make your online order direct with us, and we’ll give you a 20% discount.” Now, a targeted discount at a targeted group, which is going to do two things. One, it’s going to generate sales, hurray that’s good. But two, it’s going to create that conversation with a group of customers who are highly at risk.
Now, you don’t know, they might have moved out of the neighbourhood, which means that they’re never going to order from you again. You have lost that customer, which is why you need to be always filling the bucket. Or, they might say, “Look, you know, last time we didn’t get our rotis. We ordered on Friday night, they forgot our rotis.” Is that enough to stop us ordering? Well, you know, we order Indian, there’s three or four Indian. This is the most expensive place that we order from. Their Vindaloos’ actually really nice I quite like it, but we don’t have it every time because it is quite expensive. And missing out the rotis? Probably won’t order from them next time. And I know the CRM system that they’re using, they’re not going to be able to reach out to us. I know that for a fact, they won’t have any idea about what’s happened with us.
Multi-channel integration, this is the next thing that you want to be able to do. So, when someone interacts with you, you know, they might call up on the telephone and say, “I’d like to make a booking.” Terrific. If you grab their email address then you can email them. If you grab their mobile number then you can SMS them. If you grab either of those then you can run a Facebook campaign back to them and remarket through Facebook. And I’ll include links in the show notes, but we’ve done podcasts on both segmenting and retargeting on Facebook before. Really important things to think about. How well does it work when you reach out on a different channel? Now, the thing that I’ve always found is that if you run a Facebook campaign to people who have called you, it will work okay. If you email the people who have called you, it will work okay. If you SMS them, it will work okay. When you start combining those things it starts to get really powerful.
Each one of those has an additive effect and the sum is much greater than the parts of your marketing efforts. Now, really important to understand that. You know, that your Facebook ad will work a lot better, you’ve emailed them, you’ve Facebooked and potentially SMSed. Dramatically decreases the amount of effort you need to do to get that customer to come in. you want to save time. A lot of people go to a lot of effort to find new customers. It’s a lot easier to get an old customer to come back than it is to find a new customer. So, your CRM system should really help you with that by allowing you to do quick and easy marketing campaigns. It also enables you to improve customer knowledge. There should be a feedback component in there, so that your customers are going to be able to say, you know, “This is what I thought of the food. It was great,” or, “It leaves a bit to be desired.” I think that this customer feedback component is absolutely critical in the day and age of, you know, Trip Advisor and Facebook and, you know, so many people rather than contacting you will just jump on Facebook or Trip Advisor and say, “That place is awful, they forgot my naan bread.” Well, you know, you don’t have an opportunity to respond to that. People are going to read that and go, “Well, I don’t want a place that forgets naan bread, that would be a nightmare. I’m not going to order from them.” And you’re starting to lose customers. If you can reach out to them and grab that feedback directly, then you could look at it, you can address it, “Look, I’m terribly sorry. What I’d like to do is to give you a free $20 coupon for the next time you order.” “You know, look, hey that’s fine. I understand everyone makes mistakes. Yes, that’s fine, we’ll be happy to order from you next time.” You know, you’ve got to be getting that feedback though. And, you know, bad feedback is worth more than good feedback. My expectation is that everything is good. I’m looking for the areas that we can improve and so should you. So, your CRM system needs to be cost effective, needs to be time effective, and it needs to be simple to use.
Okay, so what are the parts that you want in your CRM system? Now, the first one is you need to be able to gather information about your customers. So, obviously the purchase that you, in a restaurant, they’re going to be generally one of two. An online order for takeout, or a booking. Now, the Chinese restaurant that we ate at last night, they didn’t do online bookings and so I rang them. I rang them at about 2 o’ clock and, of course, there was no on there. So, I left a message. Now, no one called back. I rang them at 6:30 to confirm a 7:00 pm booking. And she said, “Yes, yes, yes, that’s fine. How many people? What time? Yup, no worries. We’ll see you then,” and then hung up. The hilarious thing was she didn’t even take my name. Now, to me, having worked in the restaurant industry as long as I have, I knew that I probably didn’t need to make a booking. And we got there and of course, in the course of the night, they only had three tables in. We’re talking Saturday night. Now, the question that you’re asking is, “What was it like?” Okay, so, small digression, we’ll talk about last night. Front of house was pretty ordinary. We only knew that there were two other tables because one of the tables still had dishes on it when we got in there. The other one had a party of four, they stayed for probably about half an hour after we got there, then they left. It was probably another 30 minutes, 45 minutes before those two tables were cleared away. They weren’t super busy.
Towards the end of the meal though, an older Chinese lady came out and you could just tell the way that she walked, the way that she talked, this was the owner. And a lot more engaging. She was a lot more concerned about, you know, “Hello, haven’t noticed you.” She was doing CRM. She was the CRM system for this restaurant. “I haven’t noticed you here before. Have you just moved into the area?” “No, no, no,” and I told her, you know, “We live about 20 minutes away.” “So, why did you come here?” And we told her the reason that we went to the restaurant, which is, you know, I like going to new restaurants. She said, “You could phone up and get takeaway if you wanted to.” And we were talking about takeaway. So, she’s using Eat Now, Menulog. Doesn’t get the email address of the customer. Now, she was driving us to call in, so that they could obviously avoid the 12% commission that Menulog charge.
But once again, not building a database of their customer. And this is one of the things that I find really amazing. One of our local Indian restaurants, when we get food delivered it’s normally Indian, one of our locals I went in to pick up some food and to talk to them about their marketing. They’d actually, they’d reached out to Marketing for Restaurants not realizing that I’d ordered from them in the past. And I said, “I’ve ordered from here before.” And she goes, “What’s your address?” And I told her my address and she goes, “You’re the guy who likes the really hot Vindaloos.” Now—Boom! —look at that effort. So, she actually remembered my address. Now, we’ve probably ordered, I don’t know, 20 times from them maybe. Definitely more than 10, I’d say probably 20. She remembered the fact that I like a really, really hot Vindaloo. And I’ll often write, “Please make the Vindaloo as hot as humanly possible. If it’s too hot that I can’t eat it, I would be really happy. Every time you make it, you say that it’s really hot but I find it to be quite mild really.” And it was interesting, the last time I did it I actually rang them and said, “It’s never hot.” And I was speaking to the chef and he goes, “I will make it hot this time.” And it was quite hot. Not as hot as I would like it, but it was a lot hotter than normal.
So, once again, you’ve got that CRM system. She’s collecting information, she collects addresses. That’s what she’s thinking in her head, “Yes, this is a regular customer.” But the interesting thing was she doesn’t have a way that she can market to us, because we normally we’re often ordering through Menu Log which means that they don’t get the email address. Which is a big problem for them. So, the first part is you want to be collecting information. And it’s people who are visiting the restaurant, people who are on the waiting list to get into the restaurant, people who are making a booking, people who ordering online. You want to collect all of that information. You then want to be able to enter the bits and pieces, the specific information about the customer. When is their birthday? What are the details on them? What’s their spouse’s name? How many kids do they have? When are their birthdays? What sort of menu do they like? What’s their favourite drink? You want to be able to add all of those details in there so that when they make a booking you, you know, use that information to create a better experience for them.
So, once you’ve collected their basic information, you’ve then added it with the other information about them. The next thing that you want to be able to do is you want to be able to reach out with that information. So, it’s not just about greeting someone by name and, you know, being able to talk to them constructively so that it makes them feel like they’ve been waiting for you all night to come in because you’re their most important customer.
You want to be able to market to them. So, you need to be able to take all of that information and then market. And we’re really big fans of some old fashion marketing and these days email marketing is old fashioned. You know, there’s a lot of advanced Facebook techniques which we’ve talked about. But email marketing, I think, is the easiest way of doing it. If you’ve got a customer database of 2,000 emails then you only have to get a small number of people to come in to start dramatically making the impact on the revenue for the week. And that’s the thing that you want to be able to do. And at its most simplest, let’s collect those email addresses. And I’ve told this story before, we had a customer who called up and said, “It’s really quiet, what should I do?”
Because in our marketing support packages, that is something that we work with, you know. Customers who are struggling, we’ll help them. And one of the marketers said, “So, when did you last send an email out?” “I haven’t.” “Okay, let’s send an email. How many email addresses have you got?” “I don’t collect email addresses.” “Okay, hang on a sec. aren’t you using the booking system?” And he was, and there was over 1,000 email address in there, boom. And so, a significant revenue difference for the week, because we’re able to reach out to customers who have already been to his restaurant, already enjoyed the food that he prepares. That’s easy. And this is the simple process. And the best thing about it was this guy didn’t even know he was collecting email addresses. This is set and forget marketing almost. So, that was pretty cool. So, whether it’s SMS marketing, SMS marketing obviously isn’t going to be free, email marketing.
You could load it into Facebook. You can take either mobile phone numbers or email addresses and retarget people through Facebook by creating a custom audience. Once again, very powerful because people are going to go, “That’s my favourite Chinese restaurant. That’s my favourite Thai restaurant. Yes, I would like Thai tonight and, you know what, it would be good because that means I don’t have to cook. Yes, my problem was I’m really busy at work and I’m not going to have time to get home and cook something nice. This is the solution to that problem.” Boom. You’ve run a really cheap Facebook campaign and created a really simple solution for someone, and generated a really high ROI marketing campaign. So, what are the components that all sort of enable you to put this altogether?
How do you build a free CRM system for your restaurant? That’s the $64,000,000 question. So, the first thing is we provide you with the tools to be able to do this. The free online restaurant booking system, and the free restaurant online ordering system. Both of those are free for you to be able to do database marketing to start build your CRM system. And one of the exciting things is, now I don’t know this will probably come out in about a weeks’ time from when I’m recording it. Hopefully by then we’ll have actually started to do, our dream has always been to build the world’s number one restaurant CRM system. And so, we’ve got the components where we can collect details. And we want to move a lot further but definitely the booking system and that’s done over $15,000,000 worth of bookings, the online ordering system. We’ve got some restaurants who have tripled order volume since we introduced loyalty. That’s a set and forget marketing campaign. Every time someone orders, “This is X order, you’ve got Y orders to go. You’ve build up this loyalty discount.” Dramatic increases. And what these restaurants are doing is that they’re weening customers off services like Menulog, because you’ve got to remember, if you’re not getting the email address then someone else is and someone is using that to send out campaigns, send out offers for all of the restaurants in that area.
They’re not going to use that email address just to market your services, they’re going to use that to market offers from other restaurants. We think this is the number one cause for decreasing restaurant loyalty. It’s very hard when another restaurant decides to send out a 35% offer. That is enough to sway a lot of people. You know, times are tough for a lot of people. That 35% off discount, wow, that’s pretty exciting. For them, not for you. It means when you’re hoping for that order when they were thinking, “I’ll order from my favourite Indian restaurant on Friday night.” They get the 35% off on a Wednesday and they think, “You know what, I’m going to order it tonight.” They’re not going to have takeaway, they may not have takeaway again on the Friday night. You’ve missed out on that order, and that’s what hurts.
So, you’ve got to be building your own email list, and you’ve got to be shielding your customers from that kind of marketing for other restaurants in the area. I think that’s really important. Now, the number one question we get asked is, “Why is it free?” There’s a couple of things with that. Now, to be totally honest, we’ve spent over a quarter of a million dollars building the systems that we’ve built to produce the websites and the online ordering and the online booking, and the comparative analytics so that we can benchmark restaurants across a range of metrics. So that, you know, our restaurants know whether they’re doing good marketing or the areas that they need to improve on. So, why would we give it away for free? And there’s a couple of reasons.
Firstly, there are some small restaurants who are never going to be able to afford to use a restaurant CRM system. And our attitude is, if they’re never going to be able to afford to pay for a restaurant CRM system, then they’re never going to be our customer if we only charge for it. So, let’s give it away to them for free. And you know what, maybe they’ll get the benefit of a CRM system and be able to build their business into the point where they can pay for it. That would be awesome, helping you to build your restaurant business. The other component of it is that we’ve got a lot of really cool metrics that sit in the back end, and it’s very hard to explain that to restaurant owners. The easiest way that we can do that is by getting them to use our free components.
So, the online booking system, the online ordering system, they get to see that and they go, “Wow, look at these analytics. This is pretty cool. This is how simple it can be to run some extra marketing campaigns, maybe I should start working more with these guys.” So, that’s the second thing. The third component of it is that online bookings, they’re not expensive components to build and we just don’t think that restaurants should be paying for those facilitates anymore. We want to democratize the restaurant industry. So, the Chinese restaurant that we went to last night, the front of house was ordinary, the food, some of the dishes I really liked. We would happily go back there. Now, they’re not building a database, they had three tables last night and it was Saturday night. They had three tables on a Saturday night.
How long are they going to be around for? I don’t know, but I suspect that they’re probably going to struggle. If you’re putting three tables in and, so the interesting thing was she said 75% of their orders are takeaway. They’re paying 12% on 75% of their revenue. There’s a 12% tax on 75% of their revenue. Now, what’s your average profit margin over the year? Very few restaurants who are making 12%, so these guys probably aren’t profitable. And I think that that’s really sad.
Adam Sobel, I was talking to him a couple of months ago, before we did the podcast, and it was a philosophy about the restaurant industry. And he said, “Have you seen ‘The Search for General Tso’s Chicken?’” And I said, “No,” and he goes, “You should watch it, it’s a really good documentary.” And so, we watched it a couple of weeks ago, and there was a couple of things that were really exciting about it. One was menu engineering, you know, you’ve got to engineer your menu towards the taste of your customers. The other component of it though, was the great opportunity that hospitality gives people when they are new to a country. If you don’t speak the language, it’s very hard to be able to set up a business.
One of the businesses that a lot of migrants in a lot of countries set up is a restaurant, because of the fact that they can prepare the food of their culture, their cuisine and people will come and eat that. And the fact that you don’t speak the native language, that’s part of the experience because you’re offering, you know, what I call sort of restaurant tourism. Now, I haven’t taken my family to China, I’ve taken my wife to China and we loved it. We loved the food there, we went to Sichuan Province, and it was awesome having all of those hot food in a typical, because it is very different to the Chinese food that you get in a traditional Chinese restaurant in Australia.
But you’re still getting that taste of what it would be like to eat in a restaurant in China, or France, or Italy, or Thailand, or India. That is one of the components of it. To be charging 12%, to be making it hard for them to build their database, I just think isn’t fair. And that’s the last reason why we offer it free, you know, we want it to be free, we love those restaurants where they are cooking authentic food at a great price, providing a great experience. At the moment, we’ve got the Free Online Restaurant Booking System (FORBS) and the Free Restaurant OnLine Ordering system (FROLO). Both of those are collecting email addresses. What we’re very shortly going to do is to provide an integrated view so that you’ll be able to see that Bob Smith has made three bookings for you and he has also orders six times. So, an integrated view across orders, across bookings, we think that that’s going to be a real game changer because it means that it gives you another metric that you can then segment your customers on. What we will be able to do, and this will be in the next couple of weeks, you’ll be able to work out the dollar value of each of your customers.
So, when Bob comes in, you know that you’ve got someone who has spent $2,000 with you. and you can treat him accordingly.
Now, just watch as your customer service increase. When you know that Bob spend $2,000 with you, you’re going to be like, “It’s Bob. He’s the most important person in the restaurant. Bob, so glad that you could come back, here’s a complimentary blah,” you know. “Would you like the usual?” blah, blah, blah, blah, blah. This is the power that you’re going to be able to drag out of your CRM system, and we’re going to be making this as simple and easy as possible. Now, at the moment, we don’t do email marketing apart from our programmed emails in the online ordering system.
What we’re going to be doing on the road map, hoping around three months, is to start being able to filter your customers, whether they book a lot of seats, whether they order very frequently, whether they haven’t ordered, they were a frequent orderer but now they’re not, and then you’ll be able to send a targeted email to them. Link that to a coupon that you create. We’re starting to get some really powerful marketing tools that hasn’t been available to restaurants up until now.
Now, what we’re doing with our customers is we’re signing a lot with Mailchimp, because Mailchimp’s free for less than 2,000 contacts. Some of our restaurants have got a lot more than 2,000 contacts in there. And this is the thing, you know, I think everyone needs to be mindful of. Marketing a restaurant is very easy when you’ve got 10,000 email address in your contact list of people who’ve eaten or ordered from you. It’s simple. You can send out emails that are $10,000 emails, that will generate $10,000 worth of revenue.
In fact, we’ve got some restaurants who are able to do even a lot higher than that. Just imagine you had 10,000 email addresses in your email list and you sent out an offer that 2 per cent of your customers responded to. And so, each booking that they make is for two and a half people, which is kind of the average, there’s things that you can do to increase that of course. And the average person spends $50 in your restaurant. That’s $25,000 and if food costs are 30% for your restaurant, you’re bringing in an extra $17,500. We’re talking serious money here, people. So, that’s $17,500 in profit, okay. You were already going to have the staff in there, so don’t factor your staff costs in because they were already going to be there. It’s literally just the food costs and that’s why some people really understand the power of restaurant marketing.
And, you know, yes there are other people who are doing Instagram, and there are other people who are doing, you know, Facebook by itself or Facebook marketing and they’re running Facebook. We’re seeing some really powerful returns on some Facebook marketing campaigns, and we’ll be talking a lot more about that in future episodes. But an email that generates $17,500 worth of profit. You can do this. And it’s relatively easy, you’ve just got to come up with an offer that’s appealing to people and, you know, when you’ve got 10,000 people in your email list you’re going to kind of know what it is that they like and what it is that they don’t like.
Because you’ll be testing and measuring the kind of things, the kind of offers that they will respond to. That’s $17,500 in profit. You do that once a month? That’s $200,000 in profit extra. Now, who would like an extra $200,000? Who’s making less than $200,000 now who would like to be able to do that? And you know that people say it’s easy and it is easy. There’s one hard bit and the sad thing is that the hard bit comes first. You’ve got to get 10,000 email addresses. And we’re not talking about buying a list of 10,000 people, that’s easy, anyone can do that and that doesn’t work. It’s madness. You need a list of 10,000 people who have eaten in your restaurant, or who’ve ordered food from you in the past and you have delighted with great food, great value, great experience. Those 10,000 people that’s what we want, put that into your CRM system and you’re good to go, huge amount of profitability.
I’m really passionate about this because when you’re able to do that, you’ve got so much capability then to be able to turn the restaurant business into the restaurant business that you always wanted. You could open another site if you wanted to. You could put the restaurant under management if you wanted to. You can spend more time with your family if you wanted to. You could have, you know, really high-end chefs in the kitchen if you wanted to.
The money gives you the flexibility to build the restaurant lifestyle that you’ve always wanted. There are people out there who are doing that. It’s just this is the process that you need to be able to do that. So, I’ll get off my soap box now. It’s a pretty simple process. We’re building the tools that you need to be able to do that. If you’ve got any questions, you know, hit us up on email, Skype. We are spending a lot more time on Skype as we talk to restaurants all over the world about this using this, these systems. We’ve got restaurants in the US using the online ordering system, New Zealand using both bookings and online ordering. UK’s doing bookings. I think we’re at about five or six countries now, which is super exciting because we’ve added the last four.
We’ve been in New Zealand for a couple of years now. Really exciting as we start to spread our wings into other countries. So, that’s about it, I’ve rabbited on for a significant amount of time now. Hopefully I’ve given you some things to think about. The really important thing is that there are tools out there that allow you to do this. There are tools out there that are free. So, there’s very little stopping you from being able to do this. The easiest thing that you can do now is start using the online booking system, you know. If you don’t have a website, then that’s an issue because you need the website, the website is the central part of your restaurant online marketing and, in some respects, I think restaurant marketing in general. You know, the website is the central part of that.
We have packages that start at $995 Aussie and, you know, we’ve now got customers in New York, all around the world now. Happy to put together something. They don’t need to be huge, some restaurants really like really exciting and put a lot of work into their websites. If you don’t have a website then everyone who looks for your cuisine in your town goes somewhere else, alright. People say, “I use Facebook for my marketing.” “What about your website?” “I don’t have one.” Okay, so when someone pulls up Google Maps, Facebook ain’t listed in that. You will miss out on that customer. That will cost you money. You are fighting the restaurant marketing battle with one hand behind your back.
So, we’ve got packages out there but if you do have a website, it’s the easiest thing and we’ve got restaurants who sign up and put it on their website themselves. Now, we’ll help you with that if you need it free of charge. We’ve got restaurants who’ve put the little widget up, provisioned it, and they’ve started taking bookings before literally overnight, and they’ve had their first bookings, we come in at eight o’ clock in the morning and go, “Wow, someone’s signed up. That’s a new restaurant, that’s cool.” We’ll help you with it if you need it.
But this is the first thing. And the great thing about that is, we get two kinds of questions, you know. “It’s really quiet, what should I do?” “How many email addresses have you got?” “None.” “Well, I don’t know, we’re going to have to run a Facebook campaign.” We don’t have our go to strategy. You could be like that restaurant who said, “I don’t have any email addresses.” “Hang on a sec, aren’t you using the restaurant booking system?” “Yes.” “Let’s have a look. There’s 1,500 emails, boom.” That’s the first step. You’re not going to take that first step, it’s going to be a longer time before you get to that, the end of your journey. So, hopefully you got something out of today. Any questions just ping us on Facebook, Twitter, Skype, give us a call, email, whatever it is that you want. More customers at marketing4restaurants.com. Happy to talk to you about how we can help you find more customers and turn them into repeat customers. Hopefully you will have a busy day. Bye.
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