Study: Best ways to boost restaurant marketing ROI

Social media has created many new channels through which restaurants can promote offers to customers—maybe too many if you have a limited budget and are too busy to micromanage your marketing mix. New research from deal company LivingSocial doesn’t find a one-size-fits-all answer to this dilemma. But it does help define some steps operators can take to optimize results.

“We know restaurateurs have little confidence in the value of their overall marketing spend as they keep experimenting to get more bang for their buck,” says LivingSocial’s Doug Miller. “There is an information gap which presents an important opportunity to help restaurant merchants have more visibility and better tools to understand the performance of those marketing investments and to make smarter decisions.”

LivingSocial’s study, “Restaurant Trends & Insights for 2015,” is meant to help fill that gap. The company gathered two sets of data to compile its report: It first conducted in-depth interviews with 30 restaurant owners and managers, then surveyed 150 more to quantify its results.

Collectively, these respondents said their top three marketing challenges in 2015 are having a limited marketing budget (68 percent): tracking the results of, and the return of investment on, the marketing investments they make (49 percent); and managing online customer reviews (36 percent).

The study then quizzed operators about which restaurant marketing tactics are most effective and how to best communicate them to target customers. Respondents identified four kinds of deal offers that work almost equally well to boost restaurant sales. They are:

• $ savings with minimum spend required

• free food item with purchase

• $ savings no minimum spend required

• % off bill with a minimum spend required.

Roughly three-quarters of survey subjects said all four options were an overall success. However, when asked which one was most successful, 36 percent of operators identified “$ savings with a minimum spend required” as the offers that yields the best results.

The most successful marketing channels through which these operators convey their offers to their target audience are:

• Online deal sites (78 percent of respondents say this method is effective, 18 percent say deal sites are their most successful channel for driving sales).

• Social media (71 percent say it works, 23 percent find it to be their most successful channel).

• Email marketing (61 percent find it effective, 20 percent say its their most effective channel).

• Outside of LivingSocial, operators can also offer deals on their own via their restaurant’s website. The study found that in addition to offering deals via social media, the most popular types of online promotions appear on online deal sites (77 percent of operators use this channel); a restaurant’s own website (44 percent): and online ads (24 percent).

Deal sites are most commonly used just two to four times a year. LivingSocial also looked at the timing of restaurant marketing programs. It found that 55 percent of operators spend more of their marketing budgets in certain seasons instead of all year long. Of those that follow this regime, two-thirds spend more in off-peak seasons. Twenty-three percent boost their marketing efforts during the holidays.

“As with other times of the year, Facebook and the restaurant’s website are the most common channels to market during the holidays,” the study notes.