Restaurant Marketing Blog

Friday, October 31, 2008

A whopping 60% of restaurants said they have decreased their Yellow Page directory spending over the past two years, downgrading their listing from a display ad to a bold listing, or from a bold listing to free listing.

This was one of the many facts that surfaced in RestaurantMarketing.com’s “Restaurant Yellow Page Usage Report” – a survey of 214 different restaurants across the USA in various food and concept categories, from casual, to pizza to fine dining, taken in September 2008.

Restaurant marketer Joel Cohen, of RestaurantMarketing.com says that a total of 69% of respondents who decreased their Yellow Page expenditures over the past 2 years, eliminated their directory expenses altogether by going to a free listing.

Cohen reports that 42% of restaurants indicated when decreasing their directory expenditures, the Yellow page reps applied more sales pressure than usual and sometimes even threatening scare tactics.

Cohen says, “some restaurant owners reported that some sales reps said that their restaurant wouldn’t succeed without them being in the book. Some owners said they were hounded daily while others said they were the target of insults because of their decision.”

According to the survey, Cohen reports that the love affair with Yellow Pages is over. 80% of the restaurants surveyed said they didn’t feel that the various Yellow Page directories are successful in getting them new guests.

Over the next two to three years, 44% of the restaurants do not see the Yellow Pages as being part of their advertising budget, with 36% projecting it to be extremely minimal.

Technorati Tags: Yellow Pages  Restaurant Marketing

Posted by jcohen in • Restaurant Marketing
(0) Trackbacks • Permalink

Sunday, October 26, 2008

Ruth’s Chris Steakhouse is lowering prices due to the economy, according to a story in the News & Observer. 

I felt the article was one sided and exhalted the restaurants and owners/mgrs mentioned as making smart decisions. I felt that it advocates the fact that discounting for high end restaurants is a good business decision, when in fact it’s not.
The fact is that besides eating into the profits, which was rightfully mentioned, the discounting tactic is the lazy way out for trying to beat the recession.  What will the guests’ reactions be when the prices are raised? They’ll lose them.
It is a proven fact that lowering your prices in a recession tight economy is not the way to go. It devalues your product and devalues your restaurant.

Discounting is the penalty you pay for being unremarkable, not providing enough value and not having a written plan of action. And the restaurants mentioned are now paying that penalty.
If people don’t want to pay for your product, it’s because you’re not delivering enough value for the money you’re charging.
Rather than decreasing prices the fact is that they should be increasing their value to their guests in other ways, whether it be a tie-in with for example Brooks Brothers, or a much better dining experience.
Sounds to me like neither one of these restaurants mentioned has a sales-building marketing plan based on increasing their value and what steps to take in a tight economy.
If they did, they wouldn’t take the lazy way out and discount.

Technorati Tags: Ruth’s Chris Steakhouse
Restaurant Marketing

Posted by jcohen in • Restaurant Marketing
(0) Trackbacks • Permalink

Thursday, October 23, 2008

Lowering prices can be a dangerous move. Get guests used to paying $5 for a sub at Subway. What happens when you have to raise the price? Will those bargain guests remain loyal ... or find another restaurant discounter?

My take is that they’ll be peeved and move on. So much for price loyalty.

Technorati Tags: Subway Sandwiches, Subway Restaurants
Restaurant Marketing

Posted by jcohen in • Restaurant Marketing
(0) Trackbacks • Permalink

Sunday, October 12, 2008

Rocky Top Hospitality of Raleigh, NC running several concepts in the Triangle said they’ve changed their menus at three of their eateries last week to include lower priced items. Dean Ogan, the owner, as reported in the News & Observer said “the biggest think I see every where is the word ‘value.’

Here’s my take: lowering your prices means lowering your profits, and once you’ve lowered prices, it’s difficult to raise them due to guest objections and observations. Here’s the answer—never lower your prices. If you ever have to lower your prices, it’s because you’re not providing enough value.

Technorati Tags: Rocky Top Hospitality, Restaurant Marketing

Posted by jcohen in
(0) Trackbacks • Permalink