Episode Transcript
[00:00:01] Speaker A: So how much should I be spending each month on my marketing? That's a question I get all the time. And on today's episode of Restaurant Strategy, I'm going to answer it once and for all. Don't go anywhere.
There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
Hey, everyone, thanks for tuning in. My name is Chip Close. This is the Restaurant Strategy podcast. Two episodes every single week. You know me, I wrote a book. It's called the Restaurant Market Mindset. I give talks, workshops, key notes all over the country. I run a Mastermind called the P3 mastermind. It's a group coaching program where I help independent restaurant owners increase profits in their business. But did you know I also have a membership site? Restaurant Foundations is an incredible community. It's a library, right? We have an online course, a library of video content. We've got spreadsheets, ebooks, workbooks, all of that in there. We're putting new content up every single month. We do a masterclass every month. I do an ask me anything session for all all of the members of the of the Restaurant Foundation's site. There are hundreds of members so far to date. If you want to join that community for a limited time now, through the end of the year, I'm offering it absolutely free for 30 days. It's $97 a month after that. But you get to try it free for 30 days. You can cancel whenever you want. So if you get in there, you try it for two weeks. It's nothing new, you hate it, whatever, cancel it, I don't care. Or you get in there, you watch everything, you crush all the content for 30 days and you don't need it anymore. Fine, you win. You cancel the membership. But what I hope you'll do is you'll see that it's incredibly valuable that you'll give your team your login, that they will continue to use the resources, and you'll notice that we add new content every single month. Restaurant Foundations is our membership site. I'm putting the link in the show notes where you can just click on that and go sign up for free. Try it free for 30 days. Go do that now and then. Come on back.
Avi, you love to go out to eat. So, as a guest, what's your biggest pet peeve when you're trying to choose a place to Eat.
[00:02:22] Speaker B: Yeah. As the father of two children, I can't leave the house for less than $30 an hour. My wife has celiac. So when we're going to make a dining decision, I live and die by that menu. I'm in there researching what's available. What can my wife eat? What can we share? What do I get to eat off of her plate?
And so that menu is just a crucial part of all decision making for me as a consumer. It's why at Marquee, we focus so much on our menus, our menu integration, so that as operators, your menu that lives in your point of sale that you want customers to see is available and up to date everywhere.
[00:02:55] Speaker A: To learn more about Marquee, go to marque.com, m a r q I I.com to learn more about this and all of the incredible features they have.
Okay, so today I told you, I'm going to answer this question. This question. I get all the time. How much should I spend on my marketing? It's a question you get all the time. I hear it all the time at trade shows. It's a question I get almost every, every single week. And I'm going to put it to bed. I've talked about this a little bit over the last couple of years, but I'm going to actually hit it head on on today's episode. You ready? Here's the answer. How much should you be spending on your marketing? The answer is $0.
You should not be spending anything on your marketing. You should be investing in your marketing. When you go and you start looking at your marketing as an investment, not a spend, it changes the way you look at it. You start tracking the results more delib. Right. So let me really, really clear. When I spend money, I spend money to go on vacation. So I buy a flight, I go there, and I come back. It's not an investment. Nothing I can do. Right? Spend money on restaurants while I'm on vacation, Spend money for my hotels. That is a spend. And yes, in some abstract way, we can say that vacation is an investment in my wellbeing, my mental health. I'm able to recharge all of that. But in a literal sense, I do not get a return on my vacation spend. With your marketing, it is an investment. And we have to look at the return, the roi, the return on the investment. Right? We have to know that I'm trying something and I'm going to spend $1,000. But I need to track, measure the results so I can prove I spent a thousand but that generated $3,000 in new revenue, right? That is a three to one ROI. And if I spend a thousand to make 3,000, why would I not spend 2, 2,000 to make 6,000 or 3,000 to make 9,000?
You see where I'm going with this? There is no reason that if you can prove that it works, that you wouldn't want to increase the spend. That is why advertisers spend more and more and more and put their ads that they know work on bigger and bigger stations, bigger and bigger time slots, you know, bigger and bigger billboards, on and on. If you can prove that your marketing or your advertising is working, then why would you not increase the spend?
To hopefully increase the return? What happens?
What happens is that at a certain point, right, there's no reason why you wouldn't do that. At a certain point, you will, you will run out of capacity, right? You are too busy. I keep running these ads and it works too well. I have a crush of people and I no longer can serve all of the people I get coming in the door. Well, that's when you stop, right? Or when you watch the return not be as good as it once was. Meaning I spend $1,000 to generate $3,000, but when I have to spend $3,000, it only generates $7,000. So I no longer have my three to one. I have a two point something to one, right? And at that point, because you will get the law of diminishing returns, the more you spend, the higher you go, the less it will work. And fine, you back off and you say, okay, well then we'll go back to what was working. $1,000 was a three to one ROI. $2,000 was a three to one roi. $3,000 spend no longer had a three to one. See, we just move it back and we go to $2,000. And then you know, on that channel, that is the investment that sees a healthy return.
Everything you do has to be measured. And this is the part that drives me crazy. I mean, this is that old quote, right? I know half my marketing works. The problem is I can't tell which half Pop Menu has reimagined the restaurant. They're breaking the mold of the menu. Take the kitchen doors off the hinges. Serving up their most comprehensive solution yet. It's called Pop Menu Max. So it's got everything you've already heard me mention, right? Websites, SEO, marketing tools, all of that. But now we get phone answering. Now we get third party online order aggregation. We get first party ordering, we get wait listing all of that is now in the is now in the in the bag. Pop Menu's phone answering, for example, that technology gets your ringing phones covered, right? AI AI helps the simple questions get answered so your phone line's not tied up, right? So you don't have a staff member just answering the phone that can actually be there for your in person hospitality. No more missed reservations, no more missed orders, no more people asking for hours, anything. And that's just the beginning.
You have a passion for food. Pop Menu has a passion for technology. Together, it's a recipe for restaurant success. Listen, if you're a restaurant owner, you need Pop Menu. It's going to take your business to the next level. For a limited time only, get a hundred dollars off your first month. Plus you get to lock in one flat unchanging monthly rate. Go to popmenu.com restaurantstrategy to claim this offer. Again, it's a hundred dollars off your first month. And yes, you're gonna find that link in the show notes.
As much as possible, we measure our efforts so that we can point to it, so we can prove. And this is an old agency trick, right? So when I ran my agency when I was marketing for restaurants, I would want to show them I am doing X, Y and Z. This is the spend. And here I can prove were the results I want to be able to spend.
I want to be able to say I spent $1,000 of your money and look, it generated $3,000 in new revenue, right? $3,000 in customer acquisitions. That is a powerful place to operate from. That is what you want to be able to do so that you can look at your Google search ad spend and be able to prove the roi. Your meta ad spend, improve the roi, your direct mailers, improve the roi, your radio ads, your TV ads, your billboards, your print ads, whatever it is, you want to be able to look at it and prove a positive roi. In order to do that, you have to stop talking about a marketing spend because the number you hear all the time is, oh, you should be spending 3 to 4% of your monthly budget on marketing. But man, this, this idea that like, well, we just have to spend it, okay, and not measure it.
What we want to do is measure it in everything you do. Everything. Systems and goals, right? The goals where you want to get to. Meaning what? What you want to accomplish. The system is the series, you know, the series of actions, series of activities, right? Repeatable set of actions you do to achieve a specific goal. So I want this to happen. I'm going to do this, this, and this to make this happen. That's systems and goals. That's how you run a business. That's how you run a very successful business. When you have very clearly stated goals and you make a hypothesis, you put a strategy or tactic into place, and then you measure to see whether it worked or not. So if anybody walks around and says, oh, you should be spending 3.5% of your monthly budget on marketing, they are not teaching you the right way. What you is to think in terms of a return. And the only way you can think about a return is if you think about this as an investment, right? So I spend money to go on vacation, and I don't expect a return there. But when I invest in my retirement account, I do expect a return. And I check on that every month or so to see that I'm getting a healthy return. Otherwise, what do you do? You rebalance your portfolio. You change your investments. Because I need to hit certain metrics every month or every year so that I know by the time I get to retirement age, I'm going to have enough to be able to sit around on my butt.
We think about spending money different than we think about investing money. And I want you to think about investing marketing dollars. And the only way you do that is if you track and measure so you can prove roi. Now, when it comes to marketing, I always say this. If you have 80 or 90% of your budget that you can point to and you are measuring and you are tracking and you can prove that there's a positive return, then we have a. We earmark a portion of your budget for what I call flush money, right? So I want you to come up to me and be like, hey, like, listen, I'm going to sponsor the Little League team, and I can't totally prove roi, but I know it creates goodwill within the community. I know parents are talking to me about me on the sidelines. I know that it just presents me as a pillar of this community. And I can't prove in a, you know, in a direct way that that helps my business, but I think it does. My gut tells me it does. Now, as long as it's not a hundred percent of your budget, as long as that's 10 to 20% of your budget, fine. Sponsor the Little League. Put the big banner out on the, on the, the outfield wall. If that. If that is a way that you can stay connected to the community, I think it's a. I think it's a great move. But with everything else you need to be able to measure it. That's how we think about marketing. That's how we think about investing in our marketing. Make sure we know what we're trying to accomplish.
We put a plan into place, a tactic, something that will help us achieve that goal, and then we measure the results.
If the thing happened, if we accomplished the goal, then it worked. If we didn't, then it didn't work. And we either figure out how to do it differently or we scrap it and go back to the drawing board and try something new.
That is how we think about marketing. And I hope, I hope that that resonates and I hope you can change your perspective. It's not a marketing spend. It's a marketing investment.
One final reminder before I let you guys go. Restaurant Foundations is my membership community. Hundreds of members to date. It's an incredible resource. Tons of online video content, playbooks, scripts, everything you need to level up your restaurant. Most of the videos are like five to 15 minutes long. They are short. You watch one video and apply that to your business. So it's not some big long, you know, course that's going to take you six months to take. No, you just, you know, you take it in at your own, at your own pace. The Playbooks in particular are a series of mini courses, right? Mini video lessons that help you. Right? So, hey, I want to increase check average. Great. How do I teach my servers how to do that? There are 10 little mini lessons to get them to do that. That's it, guys. The link to the restaurant foundation site is in the show notes. You get to try it absolutely free for the first 30 days and you can cancel whenever you want, obviously. I hope you stick around for a long time. And I think it's an incredible resource there, but you use it for as long as it is valuable to you. Appreciate you guys. I know there's a lot of great podcast for you to listen to. I appreciate you making time for this one, Sam.
[00:13:53] Speaker B: It.
