The world of marketing can feel daunting, especially when it comes to figuring out exactly what’s making a difference to your bottom line. If you’re investing in platform loyalty schemes, pay-per-click advertising, print flyers and professional menu photography… is any of it actually helping? How can you tell?
For anyone working in the restaurant industry, profit margins are always tight. Just like you’d account for every penny spent in your kitchen on ingredients and staffing costs – make sure every penny spent on marketing is actually driving revenue.
The way to do this is tracking your return on investment (or more simply, ROI).
This is a key metric allowing food franchise operators to understand their costs and how much money each individual marketing tactic is actually generating.
Here’s a few tips for getting started with your marketing ROI…
It’s all about the numbers
The first step to understanding your marketing ROI is to make sure you’ve got a firm grasp of your numbers. The more solid figures you have available, the more insights you have into what’s working and what isn’t.
As part of this, make sure you’re tracking the metrics that really matter to you. It’s all well and good knowing your social media video generated thousands of views. But has this actually generated higher engagement, brand awareness and food orders?
Understand your costs
If you’re investing in “traditional” marketing such as adverts in magazines and public posters – make sure you know what you’re paying for (and why).
Digital marketing (such as social media ads via Facebook and Instagram, or PPC advertising via Google) often provides greater insights on ROI. The cost is typically lower, and you’ll gain more in-depth metrics.
For instance, you’ll learn which demographics are responding to your ads – including information such as age, location and gender. This information is often just as valuable to a business as the marketing itself!
Analyse your results
When it comes to restaurant marketing, you shouldn’t rely on hunches or gut instinct about what’s working and what’s not. Track the amount you’re spending on any platform promotions, and don’t forget to factor in the costs of any discounts or delivery fees.
If you’re running multiple brands from one kitchen, your POS system should be invaluable for amalgamating income from various sources.
When calculating your ROI, just remember to segment your marketing activities into specific campaigns. For the timeframe of each marketing campaign, look at your revenue numbers – and then subtract any campaign and operational costs. This will provide the net profits for your specific timeframe.
Your ROI is just your net profits divided by marketing and operational costs. It’s that simple!
These numbers will help you prioritise the most successful marketing activities, with the lowest costs and highest returns.
For more advice and inspiration on improving your restaurant marketing efforts, explore the Peckwater Brands blog. From implementing loyalty schemes to using Instagram to market your ghost kitchen and inspiring customers with your online menu – we’ve got all the guidance and ideas you need to stay one step ahead of the competition.
Topics from this blog: Hospitality Marketing
