4 Steps to Writing an Effective Restaurant Marketing Budget for 2019
Marketing is a must for any business and restaurant marketing is no different. There’s rigorous competition amongst the restaurant chains to win customer loyalty. But marketing needs money, and it’s very important to spend it wisely. “Where and how much money should I spend on marketing?”, "How should I allocate my resources to gain effective results?" and "What are the best marketing strategies for Restaurants in 2019?" - if such questions are boggling your mind in the last few weeks of the year, this guide will help you chart out a plan for the new year. We'll take you through four preliminary steps to write an effective restaurant marketing budget by outlining the popular restaurant marketing channels how much you can spend wisely on them to achieve your goal.
Here’s how you can split the budget effectively on your marketing expenses -
Set your objectives and goals
Before you jump into setting the budget, set your business objective and goals. Why? Studies show that businesses with set and defined goals are 10X more likely to succeed. Be very specific when picking your goals. For example, “In Q12019, I want to introduce a new Spends Tracker concept and reward customers at specific spend values. Increase sales by 5-10% and add loyal customers through marketing channels.”
How much should be my marketing budget?
Once your goals are set, set the budget to achieve the goals. But here’s the thing: There is no magic, one-size-fits-all number. Make sure you align the marketing budget with the goals and keep a check on it. As a thumb rule, spends on marketing budget should be ~3-6% of the sales. This is just a guideline while most of the restaurant businesses keep their marketing budget in the range of 3-10% of the sales. If you are a startup, you can even spend about 30% to establish your brand name.
Here’s an example:
XYZ Restaurant, a startup establishment, had gross revenue of $50,000 in 2018
They assign 25% of the revenue to their marketing
25% of $50,000 is $12,500
This means XYZ's Restaurant’s marketing budget for 2019 should be $12,500 ($1,000 per month)
How much should I spend on different marketing channels?
After setting your goal and marketing budget, take a look back at your business objective and see how much you want to spend on different marketing strategies.
There are a plethora of marketing channels for restaurants that you can use to spread the word about your business, including:
Google Adwords/PPC Advertising
Event Sponsorship.. and many more.
In 2019, the rules for advertising are going to get a bit flexible for marketers. You don't have to be on all the channels or spend a lot of money to acquire customers from various channels. It is recommended to pick a few, industry dominating channels, and stick to them. Attract people with giveaways, imagery, deals and offers, and boost your offerings with advertisements. Be wise here – spend fully on one or two strategies vs. push it into various strategies. It’s safe to stay in between these ends and follow the 70/20/10 principle. 70% of your spends can go into techniques that have worked for you previously (social media marketing, Google Ads, Facebook & Instagram Ads, and so on).
If you are a new business, see what your competitors are doing and implement it in your business. 10% of spends can be on trying out new techniques and identifying opportunities for growth. Don’t expect any returns from this 10% - it’s more of an investment.
Lastly, see what worked the best out of the 10% in the previous year and spend the last 20% on it this year.
Most important, create a calendar
Create a 52-week calendar and sort out the different campaigns that you intend to run during the year – festive season, holidays, special occasions and so on. Start-ups can prepare a monthly calendar or plan in advance for 3-6 months.
It’s crucial for restaurants to set their marketing budgets for 2019. This helps to measure their marketing strategies. Restaurants can make changes to their strategies or bring in innovative ideas during the course depending on the progress. If something’s not working right, immediately change your focus area and tweak the budget accordingly. In the end, it all comes down to having the right message delivered to the right set of audience at the right time. With a solid restaurant marketing plan in place, you will be able to manage and spend your restaurant marketing budget wisely.
Here's Team Restolabs, Wishing you a great year ahead! :)