Cost of a Placemat

restaurant-advertisingW.G. Barrett, Restaurant Consultant & Guest Blogger

Holidays represent a time of year where restaurants, as well as retail establishments, can realize a spike in sales. Each year as seasons come and go many companies must determine what extra money they will spend on specific holiday advertising. For many restaurant owners, there is a constant battle of how they can lower their operating costs all while keeping the tables full day after day. Restaurant Consultant, Gordon Barrett has spent his career in the restaurant industry. Below I share my experience of how one restaurant owner learned the true cost of ‘saving’ money the hard way

The Cost of ‘Saving’ Money – One Business Owner’s Story

While advertising for holidays such as St. Patrick’s Day, Valentine’s Day, or even the Christmas season may cost you a little more, the reward may far out weight your investment. Be careful where you choose to cut your spending when it comes to advertising. Cutting advertising that costs a few extra dollars could wind up costing you much more in the long run.

Every year approaching the holidays, this client, let’s call him Joe, would order disposable placemats for his restaurant that advertised “Ask Your Server About Gift Cards” written in large print in the center of the mat. Joe knew he would gain about $7,000-10,000 in revenue from total gift card sales over the holiday season. The placemats with the gift card advertisements cost roughly an extra $14 a case, with 1,000 placemats in a case. Joe would typically order 6 cases for the holiday season.

This past year, Joe decided that he wanted to save on his holiday spending and cut back on ordering the placemats. He realized a savings in advertising on the placemats of $85 for the holiday season. Joe made this choice knowing he was a well-established restaurant with vast number of regular customers. He didn’t think it was necessary to spend $85 for advertising “Ask Your Server About Gift Cards” for the holidays. The result… without the gift card ad, he was shocked to learn that gift card sales dropped to nearly $2,500 in sales. Saving a little on advertising cost him thousands of dollars in lost gift card sales.

Now here is some additional food for thought. Not only did Joe lose out on gift card sales, but consider these additional scenarios: 1) some gift cards would never be redeemed providing him free income, 2) loss of gift cards to generate new customers that had never been to his restaurant and 3) loss of additional money spent by loyal customers buying more food than the gift card is worth.

While it is impossible to determine these questions without more input from his customers, Joe knows one thing, he lost out on thousands of dollars in revenue to save just $85. He has made me promise him to never let him skip out on the advertised placemats in future years.

Measure Your Marketing

  • Data Collection. Start with collecting data from your consumers. Create a simple survey or ask how customers heard about your business. This will help you to target the advertising which works best for you.
  • Small steps. Consider advertising through social media. This allows you to invest modest amounts of money to gain new targeted customers.
  • Follow up! Make sure that your customers are satisfied and ask for testimonials.

Remember that in business it takes money to make money. Cutting back on marketing is the first thing that comes to mind when owners think about reducing costs. There are many places to put your advertising dollars, but it’s important to track the results. Code coupons in different publications and monitor where those coupons come from. Invest in social media and watch your audience grow. Lastly, advertise in small ways, such as on placemats and table tents. Ask Joe…he’ll tell you about the $85 he has budgeted for placemat advertising for this year.

Want to learn more about how to increase profits, attend the Restaurant Reality Check Seminar on May 3rd.  Register here.

w-g-barrett

Blog by W.G. Barrett, Restaurant Consultant & Guest Blogger.

About the author:  Gordon Barrett is the owner of W.G. Barrett Consulting, specializing in restaurant consulting, rescue and rebranding.  With decades of experience, he helps restaurant owners understand the value of strong operational restaurant management, but also how to adapt to changes through web presence, social media and online marketing.   Using a Restaurant Reality Check approach, Gordon has helped dozens of restaurants improve their profitability.