It’s not necessarily an opportune time to be a restaurant marketer or restaurant operator. It’s a tough business, and the unfortunate reality is that 60% to 70% of restaurants fail within the first couple of years.
Restaurant marketers have one of the most challenging jobs because everyone is battling for the same customer. Your efforts are split between keeping your current customer base and fighting to boost customer acquisition rates.
Kevin Lee, CEO of eMarketing Association, and Brian Siemienas, VP of Restaurant Solutions at Nift, understand firsthand the challenges that restaurant marketers are facing. To help restaurant markets and operators thrive in 2024, they teamed up for an in-depth discussion on marketing strategies and restaurant growth. Here are some highlights from the interview:
- Challenges marketers face in growing awareness, driving traffic, and generating restaurant leads.
- Actionable strategies for acquiring customers in 2024 and beyond
- The Pivotal Role of Nift Advertising for Restaurants
In this blog, we’ll cover the main points of Brian’s conversation with Kevin. Follow along and listen to the podcast here.
A Deep Dive into Today’s Pressures For Restaurant Marketers
The restaurant industry is a vibrant yet demanding field. While it offers culinary creativity and customer connection opportunities, it’s not immune to challenges. From rising operational costs to evolving customer preferences, restaurant owners and marketers must be agile and adaptive to stay competitive. Here are the five most significant challenges restaurant marketers face today.
1. Rising Operational Costs
The costs of operating a restaurant have increased drastically over the past few years; everything is more expensive, from raw ingredients and rent to utilities and labor. Food prices have increased dramatically due to supply chain disruptions, climate change, and global economic factors. Additionally, the minimum wage is rising in many regions, putting further pressure on restaurant owners to balance fair compensation with profitability.
“Rising operational costs are cutting most restaurant marketing budgets. The margins are so tight in the restaurant industry that depending on your concept, your marketing budget may be 1%-4% of your total revenue. In some cases, it could be even smaller.” – Brian Siemienas
Strategy: To manage costs effectively, restaurants can explore local sourcing to reduce transportation expenses and build relationships with suppliers for bulk purchasing discounts. Some establishments are also optimizing labor schedules, implementing technology solutions like automated inventory systems, and offering incentives for employee retention to reduce turnover and training costs.
2. Labor Shortages and Workforce Retention
The labor shortage in the restaurant industry is one of the most pressing issues today. Finding and retaining skilled staff has become increasingly complex, with many workers seeking better pay, benefits, and work-life balance. High turnover rates lead to constant training needs and disrupt service quality.
Strategy: To tackle this, restaurants can offer competitive wages, benefits like healthcare, or flexible scheduling to attract and retain staff. Creating a positive workplace culture, investing in employee development programs, and recognizing staff contributions can also improve retention rates and job satisfaction.
“As a consumer, you’ve probably experienced walking into an empty restaurant only to be told that it’ll be an hour wait to get seated. Restaurants can’t get servers. Your number one marketing initiative should be recruiting and getting staff members. You have to prioritize that operation.” – Brian Siemienas
3. Advertising Restrictions
The restaurant industry isn’t immune to data protection and privacy laws. With limited tracking capabilities, restaurants can no longer rely on Facebook, Instagram, and Google Ads as their primary acquisition channels.
“One of the biggest daggers was when Meta stopped allowing restaurants to see if they hit someone with a geo campaign and discover if they were in the vicinity of their restaurant in May of 2022. When that ended, I was at Santa Margaritaville and Land Shark. We had very little online ordering, so for us to be able to track what was working and what wasn’t, literally overnight went away.”
Strategy: Restaurants need to explore alternative marketing channels, like Nift, to escape the restrictions and high costs of channels like Meta. For example, a craft beer restaurant sought out alternative growth strategies, and with Nift, they were able to:
- Add thousands of individuals to their email database
- Welcome hundreds of first-time customers
- Increase the average check to 41%
4. Adapting to Shifting Consumer Preferences
Consumer preferences in the food and dining industry are constantly evolving. Today’s customers are more conscious of health and sustainability and are interested in plant-based options, allergen-free meals, or sustainably sourced ingredients. Moreover, the rise of food delivery apps and the convenience of dining at home have shifted customer expectations regarding delivery speed and quality.
Strategy: Restaurants can remain relevant by updating their menus to accommodate these preferences. Introducing seasonal dishes, offering plant-based alternatives, or adopting farm-to-table practices can attract a broader customer base. Embracing technology to improve delivery efficiency and offering exclusive dine-in experiences can differentiate a brand.
“Above all, restaurants need to focus on the customer experience. Experience is the most important variable. Many customers will overlook increasing costs if you provide them with a remarkable experience.” – Brian Siemienas
4. Maintaining Profitability with Increasing Competition
Competition in the restaurant industry is fierce, especially with the rise of food delivery services and ghost kitchens. Traditional brick-and-mortar restaurants now compete with neighboring eateries and delivery-only establishments that often operate with lower overhead costs.
Strategy: Restaurants must focus on creating unique dining experiences that cannot be replicated by delivery services. This could include special event nights, live music, chef’s tables, or interactive cooking experiences. Investing in a solid online presence and leveraging social media can also help build brand loyalty and attract new customers.
“The restaurant industry is as challenging as it is rewarding. The key to success lies in the ability to adapt and innovate.” – Brian Siemienas.
An Increased Focus On CRM, Data, and Loyalty
The restaurant industry is becoming increasingly competitive, and keeping up with customer preferences, enhancing loyalty, and optimizing marketing efforts are essential to staying ahead. A powerful way for restaurants to achieve these goals is by utilizing Customer Relationship Management (CRM) systems and data analytics. By leveraging CRM and data, restaurants can better understand their customers, personalize their experiences, and drive revenue growth. However, 3rd party services continue to eat away at margins:
“With 3rd party service providers like DoorDash or UberEats, you lose control of the consumer. You don’t get the data and pay upwards of 30% to utilize these services. It’s a lose-lose situation.” – Brian Siemienas
Nift Advertising for Restaurants: Solving Two Industry Challenges
Nift helps solve two of the most pressing problems in the restaurant industry: lack of foot traffic and minimal customer databases.
With Nift, restaurants can drive traffic with gifts that consumers can redeem in person. You can also grow your online orders directly on your website, bypassing third-party apps that chip away at your margins. Operators will also acquire the customer’s name, email, and opt-in permission to market to them when a consumer receives a gift to bulk up their databases!
Nift can be strategically used to solve your restaurant’s unique challenges. For example, let’s say your restaurant does a lot of third-party delivery, and you would like that data. To solve that, our team can launch a Nift with a partner that focuses on direct ordering only (if a website has that capability). This breaks the consumer cycle of always going to a third party first.
Nift can also be an awareness builder and market entry tool. Many brands are not known or popular in other parts of the country, so you want to get maximum awareness, and Nift is a tool that can grant restaurants a larger radius.
“The Nift platform is built so restaurants can treat each individual location for a different problem. The restaurant industry isn’t a one-size-fits-all type of deal, so how can we expect marketing solutions to fit one mold?” – Brian Siemienas
With Nift, restaurants benefit from:
- Trackable acquisition: Every new customer and transaction is tracked with 100% footfall attribution.
- Cost and time-effective: Not only is Nift considerably cheaper than digital ads, but it is also a 100% managed service. We do all the heavy lifting, including creating assets and optimizing conversion strategies, so you can focus on other things (like operating your restaurant).
- First-party data and Geo-targeting: Bring in customers where traffic is needed the most and grow your database with name, email, and opt-in permission to re-market.
- Easy to process: No point-of-sale integration is needed, so your service team processes Nift like other promos.
- Transparency: You always know what’s happening and where customers are within the funnel.
Tune In For The Full Episode
The restaurant industry is tough, but your restaurant can come out on top with the right tools and strategies. Listen to the full episode for even more insights, including:
- Advice for restaurant marketers on researching and utilizing new tools
- How brands can take advantage of Nift’s AI-powered algorithm
- The importance of location and geography for restaurant marketers
- And more!
If you’re interested in learning more about how restaurant groups use Nift as a cost-effective, net-new customer acquisition channel to lower their CPA, hit ROAS targets, and grow their database with first-party data, request a demo with our team.
About the Author
Brian Siemienas is a seasoned marketing professional with over 25 years of experience in the restaurant, hospitality, and entertainment industries. As the Vice President of Restaurant Solutions at Nift, Brian is passionate about driving customer acquisition and enhancing restaurant traffic.
Before Nift, Brian’s tenure included leading marketing for brands like Darden, Margaritaville, and Hard Rock. Most recently, he was the CMO at IMCMV, overseeing 28 Margaritaville and Landshark Bar & Grill restaurants across the United States. Brian orchestrated a symphony of brand strategy, communications, partnerships, advertising, creative development, public relations, loyalty programs, and digital/social media in this role. Brian’s fingerprints are all over the success of these iconic establishments.
When Brian isn’t shaping marketing landscapes, he calls Orlando, FL, home. An avid theme park enthusiast, he explores local attractions, travels, and passionately follows college and NFL football. Brian holds a Bachelor’s Degree in Telecommunications and a Master’s in Mass Communications from the University of Florida.
