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Restaurant Niche too Crowded? How would you close this client?

by emozart
13 replies
A friend of mine just bought a restaurant and was telling me about how many marketing companies have been contacting him, bending over backward to get him to try their services.

He told me specifically about two businesses that he was interested in trying out...

FrontFlip and Spot On

He knows I offer offline marketing consulting (and have worked with restaurants in the past - my last restaurant client paid me $5k) but I was surprised at how cheap it would be for him to get set up and running a loyalty program for his restaurant.

Spot On sent him a free tablet to place at his POS to track their loyalty program and they offer email and sms services.

Front Flip offers loyalty card tracking, email and push notifications and their app has a scratch off game built in...

Both companies have pretty good sales websites and offer their services with low up front costs and extremely cheap monthly rates (I think Spot On was $69/mo for email/texting/loyalty card tracking)

When he told me about 'my competition' and I did some research on these companies I felt like I was charging too much for my services and wasn't sure I could win him as a client in spite of being good friends for a couple years.

He has a really small marketing budget. The restaurant is in it's 3rd year, but it's only his 3rd month as the owner. He is relatively tech-savvy and knows a lot about various marketing options available (he used to be a regional manager at a large restaurant corporation and has been in the business for 25+ years). He's started a weebly (mobile friendly) webpage but doesn't have any content on it yet.

What would you say to win his business? What services would you offer him? Do you think it's even worth trying to get into the restaurant niche or is it too crowded?
#client #close #crowded #marketing #niche #restaurant #sms
  • Profile picture of the author Aaron Doud
    At $69/mo that is a DIY service. Has to be.

    And if prices are low like that personally that means charge more and offer more value. You'll get less of the pie but more money relatively.

    Without knowing 100% what you offer compared to what they offer it is hard to tell you what I would exactly say. But basically this.

    "Jon first I want you to know one thing. Rather you choose to work with me or not will in no way effect our friendship. This is business and I understand you have to do what is right for you. But as your friend I'm going to cut the BS. Do you have time to do this yourself?

    Of course you don't. You built a mobile webpage and haven't added content. DIY is for people with more time than money. And even if you think that is you now I don't want that to be you a year from now. Your my friend and I want you to succeed.

    Helping businesses like you succeed is what I do. Doing it for you is the right way. It just makes sense. You are in the resturant business not the marketing business.

    Anyone can offer a cheap service. The food hear would be a lot cheaper if it was cook it yourself, right? But you wouldn't have any business because people don't want and don't have time to do it themselves. And they and I assume your chefs can do it better.

    Well it's the same way with my business. This is what I do. So all that is left is two questions.

    Do you have time to do this yourself right now?
    and
    Do you expect to have time to do it yourself a year from now?

    But don't answer yet! Think about it this way. If you answer no to both you need someone to do it for you. Rather that is me or someone else is up to you. If you answer yes to both you may as well close the doors because you have no faith in your business. And if you could do it now but not in a few months why would you take the time to learn it just to hire someone to do it? "
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    Aaron Doud - Sales & Success
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    • Profile picture of the author DABK
      Maybe not. Maybe the people who sign up in his restaurant get offers from other places. I know a bakery, costs him $40/month. I signed up... In 6 months, I never got an offer from the bakery but got 5 or 6 from other businesses, businesses I had never heard of. I was not at all interested.

      Which brings me to... how many extra sales do they think the $69/month is going to make him? My baker's paid over 700 so far and not one new lousy sale... He's never written an offer. The agreement is that he writes the offers, makes them enticing, THEY merely copy, past, click send. No advice on when it's a good time to send, how often to send, what's too often... But he doesn't have to deal with the technical side of anything.



      Originally Posted by Aaron Doud View Post

      At $69/mo that is a DIY service. Has to be.
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      • Profile picture of the author AndrewCavanagh
        "He has a really small marketing budget."

        You're already successfully charging $5,000
        to help a restaurant.

        It should be obvious to you that your friend
        can't afford your fees.

        You either do it at a radically reduced priced as
        a favor to a friend (and understand that it's highly
        likely he's going to be a problem client) or you
        just let him take what course of action seems to
        suit him at his price level.

        You can always give him advice.

        Unless he's a really great long term friend I
        wouldn't be sweating it.

        Not everyone can afford your fees. You need to
        work with people who can.

        Kindest regards,
        Andrew Cavanagh
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  • Profile picture of the author bizgrower
    I don't do business with friends or family.
    I learned the hard way.

    It's unwise to do business with friends or
    family in the majority of cases I've heard
    about. Rarely do they work. A lot like
    loaning money to a friend.

    I used work for an organization that arbitrated
    civil disputes. The nastiest cases involved
    people who were friends or relatives.

    When I was younger and dumber, I asked my
    much older cousin to loan me money for a business
    venture. He simply told me he does not do business
    with friends or family, but did not discourage from
    pursuing my business. To this day, we get along.

    I'm curious about the experience of others in
    this kind of situation.

    Dan
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    "If you think you're the smartest person in the room, then you're probably in the wrong room."

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    • Profile picture of the author mojo1
      Using your wso, which I reviewed, along with a restaurant affiliate program would be a pretty dynamic offering.

      I know of a really good restaurant affiliate program that might be of interest to you that's pretty complimentary to your wso.

      If you're set on restaurants but not totally sold on committing a lot of resources up front to working with this niche, feel free to Pm me if interested.
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      • Profile picture of the author emozart
        SO....here's what I decided to do and what I did.

        I'm not concerned with business ruining this friendship (he's more of a business colleague anyway) in 10 years we'll be friends and our kids will play together whether he hires me for this project or not...

        In this case I'd rather provide him with a service that truly meets his needs than one that maximizes my immediate $$ value. He's well connected in the community and knows a ton of restaurant owners. From my conversations with him I picked up on some of his criteria.

        1. Low monthly cost
        2. Easy to maintain, not a time-suck commitment (1-2 hours per week)
        3. Doesn't require any long-term commitment or reliance on me (I'm kind of a commitment-phobe when it comes to monthly fulfillment and energy requirements on my part) and my clients appreciate that too
        4. He controls his assets

        So here's what I said to him
        ----------

        "I did some research on FrontFlip and Spot on and here's a basic outline of their business model:

        You get users (your customers) to adopt a 3rd party app as an advertising and benefit (coupon)-driven platform. The app company generates revenue by getting businesses to pay for advertising via their push notifications in the app. You help FrontFlip or SpotOn grow their user base by encouraging their patrons to adopt a new system and pay them...They collect your customer data and help you manage it. Not a bad business model, but I have a couple of concerns.

        1. Why are you pushing your customers to use another business's app?
        2. In a fee for service/advertising environment, as the user base grows and more businesses join the particular platform, there's gonna be lot of cross promotion. Your users, that signed up because you told them, to are now getting ads and specials for other businesses, your competition, pushed right to their phones.
        3. As the 'noise' increases within the app, don't be surprised if you see offers for a 'premium' service to list your business above the competition as your customers use the app to search for places to eat in your area.
        4. If you choose to stop paying the monthly service fees, who still has access to your customer database? You? Them?

        I told him, if you want to go down that road, by all means...go for it, it's inexpensive to set up and the apps are kinda cool, but why not create your own loyalty program? You bought this business to be profitable and to make YOU money, right?

        Why not build your own assets, your own email list, your own text program, your own database, your own website- where you control the messaging?

        It's doesn't have to be an expensive proposition or difficult to manage, actually, the platform I use to build the program is extremely user friendly and you can actually send the text messages and emails yourself, anytime you want.

        I then showed him a print version of a customer sign-up form (with a QR code for digital sign-ups). The demo included a $5 discount attached to encourage his patrons to join his 'e-club' - He's collecting email, telephone and birthday.

        When his customers join, they are added to an auto-responder list and sent a confirmation text with the discount and a member-id to track their visits.

        He'll send 4-6 emails and 2-4 texts per month with the goal of getting his guests to return 1-2x per month.

        The average ticket price at the restaurant is $30. If he can build a list of 500 (it'll take about 5 months @ 5 customer sign ups per day) and turn them into 'regulars' that come in just once a month, that will account for $180,000 in revenue for his business.

        I told him that the last time I worked with a restaurant, they paid me $5k and were thrilled with the service I provided and they happily refer new clients to me. I can understand a limited budget and would be happy to work with him on finding a win/win solution. At the end of the day, we get to choose the value that we pay for. I told him to think about the promotion he wanted to run and if he hired me build his website/mobile site for him too, I can build it in such a way to remove and reduce most of his monthly fees. At the minimum he'd still have to cover hosting and a penny per text message.

        I told him to think about the promotion he wanted to run and I'd get back with him in a couple days.
        -------------

        The nature of the conversation was a lot more informal, but that's the jist of it

        Hope it works and if not, who cares?! I thought about doing something and did it!!

        Any thoughts?

        Not afraid to fail,
        (emozart)
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        • Profile picture of the author mjbmedia
          Originally Posted by emozart View Post

          1. Low monthly cost
          2. Easy to maintain, not a time-suck commitment (1-2 hours per week)
          3. Doesn't require any long-term commitment or reliance on me (I'm kind of a commitment-phobe when it comes to monthly fulfillment and energy requirements on my part) and my clients appreciate that too
          4. He controls his assets
          1 low monthly cost ? prospects often say this, so theyd be happier paying $69 a month and getting $180 a month ROI, or $500 a month and getting $3500 back a month, if youre p(l)aying with peanuts you aint gonna get a strong solid oak tree growing anytime soon , theres no money to play with , speculate to accumulate etc

          If he paid you $60 and you gave him back $300 every month, how many $60 do you think he'd suddenly be happy paying to you? Low monthly cost, BS , when they say that they do NOT believe it is going to work and see it as an expense, not an investment, you need to get them seeing it as a reasonable investment , ideally a no brainer investment
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          Mike

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          • Profile picture of the author Anthem40
            I wouldn't recommend axing a deal with FrontFlip. That app does very well for restaurants. There really shouldn't be a reason you cannot continue to work with him though, as FrontFlip is only about marketing specials. It gets people in the seats, they play the scratch game, and they stay there until they purchase all their "prizes".
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            95% of IM'ers have great relationships with clients who also advertise offline and with other people. Stop missing out on that cash and leverage into it. PM me if you are an established marketer and want to find out how.
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  • Profile picture of the author bizgrower
    You might find this a helpful option:
    (Have not used it myself yet)
    It uses Twitter and was posted by Warrior Rick Duris

    http://www.warriorforum.com/offline-...campaigns.html
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    "If you think you're the smartest person in the room, then you're probably in the wrong room."

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    • Profile picture of the author tbochi
      The problem is that you have competition and this is fine. The question however is more important can you deliver better results compared to the competition?
      To establish this in the mind of your customer you need to consider charging him on a per lead basis. So no results no pay.

      To get your foot in and get to work with the account it will be wise to check with him how many leads he gets from your competition for the $ 69. then compute the cost per lead. Offer him a cost per lead 10% even 20% less than competition and get his business (assuming you can afford it). When your services prove to be effective not only he will drop the competition and pick you up he will introduce you to him friends who will be happy to deal with you. There is no better than referral business.

      Bear in mind if you are providing a service with a monthly recurring charge, it is immaterial if you collect for the first month or not. If you get paid for the following month consider it as if you provided credit for 30 days.

      You must have confidence in your services so that the customer will have confidence in your services as well.
      If you show him that your service works under the above outlined conditions he will be a fool not to continue using the services and pay for them because you can take the information and go next door to his competitor who will be more than happy to pay you for the service. And who does not have competition?
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  • Profile picture of the author Aaron Doud
    I like what you came back with and have always been a fan of "informal". Makes people drop the sales BS on both sides and get get business done.
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    Aaron Doud - Sales & Success
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  • Profile picture of the author RiskTaker
    Im intimately familiar with FF and SO. Matter of fact I built their competitor thats on their 2nd round of financing and capturing most of their clients anyway. FF and SpotOn are co-ops of the loyalty space. What most of those programs fail to do is ACQUIRE new customers. Your buddy and yourself simply should use them as tools for his restaurant not an end all be all.
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    Get Paid

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    • Profile picture of the author Rus Sells
      That's exactly right! Leveraging them to increase existing customers annual spend is smart but as you said they don't acquire new customers.

      Now depending on your buddies location (high foot traffic) you should do a little research on proximity marketing to help drive new feet through the door.

      Originally Posted by RiskTaker View Post

      Im intimately familiar with FF and SO. Matter of fact I built their competitor thats on their 2nd round of financing and capturing most of their clients anyway. FF and SpotOn are co-ops of the loyalty space. What most of those programs fail to do is ACQUIRE new customers. Your buddy and yourself simply should use them as tools for his restaurant not an end all be all.
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