I am of the firm belief that advertising results in getting your unfair share of the business available. Assuming location is a key element in a particular businesses success, a business can essentially alter the normal course of business with their advertising…when it’s available.
This post is focusing on the restaurant business because my company works with a number of them but the philosophy can easily be applied to any business. Said philosophy is simple…spend your advertising dollar when you are the busiest. NOT when your business is slow. Your return on investment will double when you are trying to affect your business on the days when most consumers are going out to eat. Here are the facts…statistics are derived from a Cornell University study on restaurant spending revenues by day of the week:
- Sunday – 16%
- Monday – 8%
- Tuesday – 12%
- Wednesday – 9%
- Thursday – 8%
- Friday – 21%
- Saturday – 26%
Notable fact of above…63% of revenue is done on the weekend Fri-Sunday.
So taking that into consideration why do so many restaurants continue to pour thousands of dollars of advertising into increasing business Monday through Thursday? If only 37% of the week’s business is done during those days it’s no wonder why the complaints continue. There are just not enough people even available to market to.
So to break it down by the numbers…if you spend $5,000.00 a week by promoting special offers for Monday through Thursday and each percentage point represents one person your cost per available person is $135.14. Remember you also have to have an offer that is going to motivate a percentage of those 37 people. So if you happen to attract 10% of those your cost per actual person is $1,351.35. Compare that to spending the same amount for Friday – Sunday offers your cost per available person drops to $79.37. If you attract 10% of those your cost per actual person is almost 50% less.
According to the National Restaurant Association 27% of consumers say that a restaurant’s offers, discounts and coupons account for their decision on where they are going to eat…that’s almost one out of every three people! It’s easy to figure out that the restaurant’s that are offering dynamic offers on Friday – Sunday are doing better than the many who are doing it the other way around. Most people are going out on those days and 1 out of 3 are choosing the places with the best offers!
Like I said before…this can be applied to any business. I would be happy to do the research for you and crunch the numbers. Doing so is essential for your business’s growth. And by the way the NRA also forecasts 2009 restaurant revenues to grow 2.5% in 2009. Recession? What recession.
Keep following my blog for more exciting “Third Grade Math”!