Pizza Today - March 2021 - 28

The path to a marketing budget
Marketing remains an essential
function for any restaurant, a necessary
endeavor to attract new guests, retain
existing customers and, ultimately, drive
sales. It's also a step toward more
informed decisions.
" You want to know how much money
you need, so you can anticipate and plan
accordingly, " says Nick Makris, an associate professor in the College of Hospitality Management at Johnson & Wales
University.
Still, many restaurants continue to
overlook the importance of a marketing budget or struggle to account for its
necessary components.

Step 1: Set a dollar figure
Quite often, restaurants brush aside
a marketing budget as an unnecessary,
burdensome effort. It need not be. To
simplify things and determine a reasonable marketing budget, gather annual,
quarterly and monthly sales figures. According to Makris, larger chain restaurants typically devote seven to 10 percent
of total sales to marketing. In contrast,
smaller, independent spots traditionally
sit in the two to three percent range,
though some might run as high as six
percent.
" Those are good guideposts, " Makris
says.
New restaurants will need to plan
for more, however, as it is significantly
more expensive to establish a brand than
sustain it.
" Many new operators budget their
funds just to get the physical plant open,
then think the world will beat a path to
them once the doors swing, " Kirkland
says, contending that such passive efforts
contribute to the high number of restaurants that close in their opening year of
business.

Step 2: Account for experimentation
A marketing budget typically includes
traditional forms of advertising such as
direct mail and print as well as digital
marketing efforts like Google Ads or paid
social media advertisements. Marketing

often requires experimentation, testing
different avenues before investigating
what resonates. While paid Facebook ads
might work well to generate orders of a
limited-time menu item, print coupons
on a grocery store receipt might drive
traffic for a weeknight special.
" No one formula works for everyone,
so expect to experiment, " Makris says,
reminding that any marketing budget
should also factor in updating and maintaining a website stocked with modern
functionalities like online ordering.

" By tracking and evaluating your
current marketing investment, you can
see what needs to change and target the
marketing that brings you the greatest
ROI, " Makris says, adding that even slim
marketing budgets can stimulate impressive results when dollars are deliberately
and strategically invested. n
DANIEL P. SMITH Chicago-based
writer has covered business issues and best
practices for a variety of trade publications,
newspapers, and magazines.

Step 3: Adopt a strategic
approach
When constructing a restaurant's marketing budget, Sonley says it's imperative
to identify specific promotional targets
and to know the traditional peaks and
valleys of a business' year. Now running
his own Colorado-based marketing
agency called Woken Eye, Sonley does a
deep dive with each client that includes
identifying instances in a normal calendar
year in which the restaurant wants to
use promotion to drive traffic and sales.
This includes holidays, new menu item
launches, anniversary celebrations, summer parties and sporting events.
Having this information handy allows
the marketing budget to flex accordingly.
For instance, a pizzeria might invest more
marketing dollars into pumping up spring
and summer catering specials whereas it
might not need to devote as much capital
to a Super Bowl promotion.
In addition, Sonley says a useful marketing budget will also outline available
funds for each quarter of the year while
simultaneously calling attention to when
and where paid advertisements fall to
avoid overlapping promotions.

Step 4: Go forth, track and pivot
With a thoughtful marketing plan
in action, operators can then reallocate
funds from the budget accordingly as the
year progresses, cutting a planned investment on unprofitable marketing endeavors and redirecting capital to efforts that
impacted sales. This, Makris says, is the
way pizzerias capture the most bang for
their marketing buck.

WHY YOU NEED TO THINK
OF MARKETING LIKE A
WATER PUMP
Veteran hospitality consultant and
author Tim Kirkland, CEO of Renegade
Hospitality Group, urges restaurant
operators to think of marketing like a
water pump.
" Once the water is flowing, it takes
relatively little effort to keep it going, " he
says, " but if the pump is shut off or
allowed to run dry, it takes significant
effort to get it primed and flowing again. "
That's why Kirkland urges restaurants
to avoid stop-and-go marketing and
instead favor continuous investment.
Too often, Kirkland says, restaurants
only turn to marketing when sales drop,
using already scarce revenues to " jumpstart " the business. Such reactionary
marketing, however, is frequently more
expensive and less effective than a practice of steady messaging to customers.
" If you wait until business starts falling
off to invest in marketing, it's often too
late, " Kirkland says.
Another common misstep: restaurants
immediately slice their marketing budget
when the business hits a downturn.
Though a seemingly modest cut, it risks
taking the restaurant off the consumer's
radar.
" Cuts to marketing will show up
weeks and months later in the form of
further reduced top-line sales, " Kirkland
contends.

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Pizza Today - March 2021

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