Episode Transcript
[00:00:00] So check it out. If your marketing plan depends on constantly finding new guests, you are already losing. Because the most profitable restaurants out there know that they don't grow by chasing strangers. They know that to grow, they have to build relationships. They have to keep promises. And today, I want to show you why most restaurant marketing is focused on the wrong visit and how that one simple mistake quietly destroys profit. All of that on today's episode of Restaurant Strategy.
[00:00:31] 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.
[00:01:02] Hey everyone, thanks for tuning in. My name is Chip Close and this is the Restaurant Strategy podcast. We do two episodes every single week. By now you know I run a coaching program. It's called the P3 Mastermind. I host live events every single year, like the Profitability Summit. I have a membership site, it's called Restaurant Foundations. I write books. You can find me anywhere, all over the Internet. I have one simple request from you today. If you get any sort of value from this show, right, we've got over 500 episodes and I'm guessing you've been listening for a little while. If you get any sort of value from this show, I want to ask you to leave us a rating and review on Apple Podcasts. Five stars. Just let people know what you get out of the show. Of course, don't lie. If you don't like the show, don't leave us a review. But if you like the show, if you get any sort of insights, any sort of value from it, take a few minutes and just go. Let other people know what you get out of it, why you tune in, and why you should think they should tune in. Do that. That more than anything else would help this my small business restaurant owners. If you want a steady, predictable flow of new customers, I want you to check out restaurant scale secrets. They're fully done for you. Marketing systems have helped tons of restaurants, including more than 50 members of this very community. They've helped them fill tables, add tens of thousands of dollars to their top line revenue. If you're ready to take marketing off your plate and start filling tables, Then head to restaurantscale secrets.com chip to book your free discovery call today. As always, you'll find that link in the show Notes.
[00:02:32] Now, most restaurants market like a leaky bucket. Here's the pattern I see. Everywhere money goes into marketing, guests come into Once they disappear, the worst part is they spend money on marketing to offer a promotion, a discount, some sort of thing to get them in the front door. The guests come in at a discount, don't generate very much profit for the restaurant, and then they disappear. So what happens is the owners spend and they spend and they spend more to replace people that they already had.
[00:03:02] And that's actually not growth. That's churn. And churn is not only expensive, but, man, it's exhausting.
[00:03:09] See, here's the reality. The first visit is overrated. And this might sound backwards, but stay with me. The first visit is fragile. Guests are evaluating. They're comparing, they're skeptical.
[00:03:22] The second visit is where true trust starts. Yet most restaurants put all their energy into that first visit and almost none into what happens afterward. And that is backward retention. I'll say this. Retention is the highest ROI marketing channel you own. Why? Because repeat guests spend more per visit. They tip better, they order with confidence, meaning they move quicker, they complain less, and guess what? They bring friends they evangelize for.
[00:03:53] They are easier to serve, they are more forgiving, and yes, they are more profitable. And most restaurants completely ignore them. They spend all their time to get people in the front door, and then they just assume, oh, they came in, they had a great meal, of course they'll come back. But they won't. 70% of all new diners will never return to a restaurant. It's not. 70% of new diners will only come back one more time. 70% of new diners will never return return to a restaurant, ever.
[00:04:21] But the reality is that returning guests are easier to serve. They are more profitable.
[00:04:27] Again, most restaurants completely ignore them. Why?
[00:04:31] I think they do it because retention isn't flashy.
[00:04:34] But guess what? It compounds.
[00:04:37] Here's the reality, and I want to go back to a point I made here. Discounts train transactional behavior.
[00:04:44] So many owners confuse loyalty with frequency. And see, discounts don't actually create loyalty. They create dependency. Just ask JCPenney. If the only reason someone comes back is price, then they were never loyal to begin with. They were just waiting, right? They were waiting for the deal. True loyalty comes from consistency, not incentives.
[00:05:06] Seth Godin always says this, and I like to share it, that price is the last refuge of a marketer who doesn't know what else to do.
[00:05:15] When you discount, you're basically saying, well, the only reason someone's not coming is because it's too expensive. But I find that is rarely, if ever, the case.
[00:05:27] Most people don't come to A restaurant for a variety of reasons. Either it's not top of mind or it's not convenient, or they had a bad experience last time, or they're not in the mood for that cuisine or any number of reasons, but not because it's just too expensive.
[00:05:45] So be really clear on what you actually have to solve. And I don't think you have to solve the pricing issue. And if pricing is the issue, then I think what you would do is come up with a whole new menu that was priced lower, that was obviously portioned appropriately and cost out appropriately. But if price were really the deal, right? If price were really the issue, then, man, then don't have $32, you know, entrees. Have $22 entrees. It's a totally different thing. But I don't think that's the case. And I think, you know, that's not the case.
[00:06:18] Here's the deal. Operations create retention, not promotions.
[00:06:24] There's a truth that most owners avoid. If the guests don't come back, marketing didn't fail, operations did.
[00:06:31] Meaning inconsistent food, inconsistent service, inconsistent experience. And you cannot out market consistency. It's something I say all the time, is that those are the blocking and tackling. Food's gotta be great.
[00:06:42] Restaurants gotta be clean. Service has got to be warm. That's gotta be there. And that is actually what people will return for. Man, food's good. Let's go back there, man, I love it there. They just take always such good care of us. They're always so warm and gracious.
[00:06:57] But when it comes to retention, you can inject in a marketing step. Most people don't come back simply because they were never invited back.
[00:07:05] So why don't you invite back? See, here's the deal. The second visit should be designed, not hoped for, but designed. See, most owners that I talk to, they hope guests come back. And hope is not a strategy. Retention should be designed, meaning clear service standards, consistent food execution, staff who recognize regulars, follow up, communication, data capture, capture, and a simple invite.
[00:07:31] Hey, when are we going to see you again?
[00:07:33] See, when everything is designed, the second visit almost feels inevitable. Or at least it should.
[00:07:44] In today's economy, getting guests through the front door costs more than ever. Isn't that exactly what we're talking about today? Meaning guest retention becomes crucial. In fact, it's everything.
[00:07:54] But most unhappy guests won't complain. They'll just disappear. That's why operators are turning to ovation, the easiest way to recover guests in real time. When someone leaves critical feedback, you get notified instantly and you can jump straight into the conversation right from your phone or your desktop. With AI suggested replies, customizable templates, and one click offers, Ovation helps you resolve issues fast and. And it can make things right. And if you're too busy, just tag a team member and keep it moving. One operator said 90% of the time, guests are blown away that they hear back. We saved 1400 guests in three months who wouldn't have come back otherwise. Ovation even tracks your recovery metrics so you know how many guests you're keeping and how fast your team is responding. If you're serious about retention, head to ovationup.com chip to book a demo. And if you mention this podcast, they're going to waive your setup fee again, ovationup.com chip and yes, that link is in the show notes.
[00:08:58] Now, most restaurants don't actually own their guest relationships, meaning if you don't know who your guests are, how often they visit, why they come, and why they stop coming, then you don't have a marketing strategy. You just have guesswork. Owning guest data isn't corporate.
[00:09:16] It's survival. It's just how the game is played. Now, chasing new guests is actually the most expensive form of marketing because customer acquisition costs more, converts less, takes longer, and is way less predictable. Retention costs less. It compounds, it builds momentum, and it creates stability.
[00:09:38] One of these is a gross.
[00:09:40] One of these is a growth engine.
[00:09:42] The other is a hamster wheel. And so here's the real paradigm shift that I want you to make, right? The goal of marketing is not to get people in the door. It's to give them a reason to come back. Once you understand that, everything changes. So here's what I want you to do about it. I want you to ask yourself this question.
[00:10:00] What happens after someone's first visit? If the answer is nothing, that's the real marketing problem. You have to answer that question. What. What happens during and after someone's first visit? I think if you're not doing this already, the most important question you can ask a guest is, hi, how you doing? My name is Chip. I'll be taking care of you today. Have you been here before? Hey, you. You guys have been here before, right? Hey, is it anyone's first time here? However you ask, it doesn't matter. But I want you to identify where all your first timers are. And when they say, no, we've actually haven't been here before, you say, that's amazing. And then it's your opportunity to get to know something about the people that's amazing. What made you come in today, right? They're gonna say, oh, our friends are always raving about this place. Or, you know, we always drive by this place. Or, you know, we're actually new to the neighborhood and we just decided to check it out. Or any number of reasons. But you will learn more about your marketing, you'll learn more about your customers if you just ask the question, have you dined here before? No. Amazing. What made you come in tonight? Of all the places you could have dined at, why us? Of all the nights, what made you come in ton night? You will get valuable answers when you ask every single table that question. Now, obviously not your regulars. When you recognize people, you call them by name, you make them feel welcome, they have come back, your marketing has worked. But for everybody else, if you're unsure, just check and make sure. See if they're, see what brought them in, right? And then what happens after the visit?
[00:11:28] Does somebody call them, email them, text them? Is there an automated sequence that goes into, you know, that goes into place after that? Your whole goal should be to identify the first timers and figure out a way to get them to come back. And anything less than a surefire strategy to get, let's say 20 to 30% of your people back in the next month, then you're missing the whole boat, right? Again, you gotta ask yourself the question, what happens during and after someone's first visit? And if the answer is nothing, that's a big marketing problem. Here's the deal. The bottom line, right? Restaurants that win don't chase attention. They earn trust and then keep it.
[00:12:11] That's it, guys. I appreciate you making time today.
[00:12:14] As I say every single time. I know there's a lot of great podcasts. Appreciate you making this show part of your week. If you get any sort of value from this show, please take a few minutes, leave us a five star rating and review on Apple podcasts that more than just about anything else will help this small business grow. Appreciate it, guys. Thank you very much and I will see you next time.
