With over one million restaurant locations in the United States, marketing is essential for getting your unique dining establishment in front of potential customers. But, not just any marketing – You need to identify and employ effective marketing techniques. That can be more complicated than simply buying a few ads or announcing a new menu item on social media.
If you market to the wrong people, at the wrong time, or in the wrong way, you may as well throw your marketing dollars away. In order to get the very best possible return on your financial investment, you need to track your restaurant marketing ROI.
Keeping tabs on your marketing performance (and making profitable changes to your approach) can be as simple as choosing the right marketing partner. Here is a look at getting the best bang for your restaurant marketing buck.
What kind of ROI can you expect from successful restaurant marketing?
Naturally, you want your restaurant marketing to be successful, but defining success can be a bit more complicated than putting a single number on your profit margins. Typically, restaurants should try to earn an ROI that is at least 200% of what they spent. This means that an investment of $1,000 should yield a profit of at least $3,000.
However, ROI is more complex than this simple formula. First, you want to explore an ROI that is more granular than your overall marketing returns. You want to see how each individual marketing strategy is performing, so you can identify those approaches that are profitable and improve those approaches that are failing to meet your marketing goals.
Second, you may want to go beyond a simple profit number to identify a range of marketing goals. While sales are important, so are things such as brand awareness, customer value, website traffic, reservations, and high-quality leads. These types of marketing goals eventually do lead to the sales, loyal customers, and business growth your restaurant needs to thrive.
Why is it important to track marketing ROI?
Ultimately, successful restaurant marketing will consist of strategies that are proven to help you meet your marketing goals. And the only way to identify and nurture those strategies is by careful tracking and analytics. Here is a look at some of the most important reasons you should track your marketing ROI.
💰 Track ROI to optimize your marketing approach
Tracking the marketing solutions for restaurants such as yours helps you to optimize your marketing approach (And therefore the profits you earn).
For example, say you are running both Facebook ads and a print flier to promote a special offer. Your goal is to drive weekday lunch reservations. Tracking the ROI of each approach can help you see which one is most effective.
Maybe you discover that your fliers are yielding a low ROI, but your Facebook ads are driving up weekday lunch reservations and sales. You may choose to divert some of your budget for the flier toward your Facebook ads in order to earn the most possible results from your campaign.
💰 Track ROI to ensure you meet your marketing goals
As mentioned above, each of your campaigns should have specific long and short term marketing goals intended to grow your restaurant. Tracking your ROI can help you make sure these goals are being met.
For example, say you are running a local SEO campaign in order to boost local traffic to your website. Tracking your results can help you pinpoint who is visiting your website, where they are coming from, and what action they are taking once on your site. And that can help you see whether your SEO campaign is driving the results you need.
💰 Track ROI to identify the sources of your best leads
If you are earning more leads, and getting more people at tables in your restaurant, your marketing is likely doing very well. Tracking your ROI, however, can help you understand your marketing success at a more granular level.
For example, tracking your marketing performance can help you identify where your best leads (The ones who turn into customers), are coming from. When you are running multiple marketing campaigns across multiple channels, this information can help you further optimize your marketing efforts.
Say you are running a billboard ad and Google Ads for your restaurant. Tracking your marketing performance can help you track your leads back to either of those campaigns. You may find that you get the most leads from your billboard ad, but the most conversions from your Google Ads. That can help you allocate limited marketing dollars more wisely.
Metrics to track your restaurant’s marketing ROI
When it comes time to track your restaurant’s marketing ROI, you will need to look beyond the profit numbers and explore what are called Key Performance Indicators (KPIs). KPIs give you the most accurate look at your marketing ROI, so you can intelligently engage in restaurant media planning and marketing execution.
Reach refers to how many people see your marketing. It can be measured in the number of followers you have on social media, the number of impressions your paid advertising receives, or the amount of traffic on your website. Reach lets you know how many people are being impacted by your marketing, but you need more data to understand how they are responding to the marketing messages they are seeing.
Tracking engagement provides some of that additional information. Engagement refers to the actions that people take to interact with your brand. Anything from likes and comments on social media to clicking on your Google Ad to mentioning your brand on their own profiles can count as engagement.
Individuals who show interest in your restaurant qualify as leads. They may send a message to you over your website. They may ask for a look at your menu. Not only that, but they may call to inquire about available seating or allergy options. Likewise, they may sign up for a mailing list. Leads are important to your business because you can nurture them through the sales funnel into paying customers.
The conversion is the step that delivers the results you want: Sales at your restaurant. A conversion for your dining establishment will probably look like a reservation or an online order. However, it is important to note that conversions can look different depending upon the goals of your marketing campaign. For example, you may consider someone who signs up for a monthly newsletter to have converted, if that is the goal of a particular marketing effort.
📈 Average Order Value
The Average Order Value calculates the average dollar amount spent by a customer each time they place an order through your campaigns. To get the average order value (AOV), divide the total revenue by the total number of orders. For example, suppose your restaurant’s sales in July were $50,000 and you received 2,000 orders. $50,000 divided by 2,000 equals $25, so the monthly AOV in July was $25.
📈 Customer Acquisition Cost
Customer acquisition cost (CAC) refers to the average amount of money it takes to earn one customer at your restaurant. The higher this cost, the lower your ROI is likely to be. You may find that certain marketing campaigns are more efficient at earning you customers, while others are more expensive. Or, you may find that certain target audiences cost more to reach than others.
📈 Customer Retention
It always costs less to get a previous customer to come back than it does to earn a new one. Part of tracking your restaurant marketing ROI needs to involve tracking the cost of your customer retention and your company’s success at retaining customers. Are you able to earn ongoing loyalty from those who have eaten with you in the past? Doing so can boost your ROI over time.
Download a restaurant marketing plan for free
Effectively tracking your marketing performance does not have to consume all of your time and attention. All you need is the right marketing partner who can create thoughtful media plans and deep-dive analytics to help you maximize your ROI. Ready to get started? Download a marketing plan tailored to your restaurant, entirely for FREE, today!