Food for Thought

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By Blackstock (Blackstock) on Thursday, July 20, 2000 - 07:51 pm: Edit

If you ate at a chinesse/german restaurant,in an hour would you be power hugery?

By Aaron Allen on Tuesday, January 13, 2004 - 10:52 am: Edit

How do I measure the effectiveness of our restaurant marketing?

If you cannot prove the dollars you spend persuade people to do business with you, you should not advertise. If you canít see a direct relationship between marketing and increased sales, your marketing isnít working.

One piece of analysis we have conducted for Clients is to compare the variances, period over period, for sales and marketing expenses. We look to determine a correlation. Itís amazing how frequently we find that there is absolutely no correlation between sales and marketing. The graph here is an actual Client chart that shows this relationship. This was an independent restaurant operation that had a steady period over period sales increase of around 8%. The other line represents their advertising expenditures. As you can see, there is absolutely no correlation between the two lines. For this independent operator, that represented about $150,000 in advertising dollars that could have gone straight to the owners back pocket instead. This restaurant owner had solid operations and he wouldnít have felt any change in his sales volume for at least a couple of years by canceling his advertising. The advertising wasnít working. After some modifications, we ran the analysis again and found that each dollar spent had a direct impact on sales and showed a positive return on investment that could be measured. Before the measurement wasnít there, so it was hard to say with absolute certainty if the advertising was working. The poor marketing was masked by the increases in sales, but one had nothing to do with the other.

Aaron Allen

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