Why Make Your Job More Difficult?

One aspect of restaurant and cafe/pub business that the COVID-19 pandemic has highlighted is the need for an efficient database of customers. It has also provided an opportunity for restaurateurs to kick-start that database, but most have ignored this vital opportunity which would help secure their futures.

Most restaurants, and I mean about 80%, don't really have an efficient method to collect customer contact details. Whilst some have taken to delivery/collection services they haven't geared themselves up to the opportunity before them, in so much as they are not collecting the all important customer data. "So why is customer data so critical to my  restaurant business? I can communicate with my customers via social media!"

Let's look at the facts here. Most local Swansea/West Wales based businesses have a Facebook Business Page presence. But Facebook, for as good as it is, only exists for one reason. To make money...and they want your money. Okay so let's go back to basics - this is where we were a few years ago:-

What Is A Good 'Reach' On Facebook?

When we first wrote this post in early 2015, the average Facebook reach was about 4.11% of total Page likes. Meaning for every 100 people who liked a Page, only four of them actually saw a post in their News Feed. In January 2017, the average reach was 8.92% – more than double!
Source: meetedgar.com - 8 Mar 2017

This is where we were in 2019:-

What Is The Average Reach Of A Facebook Post?

post's average organic reach is only around 6.4% of the Page's total likes. There was a marketing-world rumour that this reach only extended to an average of 2% of the page's total likes, but in actuality it's more like 6.4%.
Source: Socialmediatoday.com - 5 Feb 2019
Frankly, whether it's 2% or 6.4% it isn't good reading for restaurant businesses. Let's put this is practical terms...with a few examples:-
For every 100 fans on your business page your post reaches 6.4 people.
Of those 6.4 fans how many are going to visit your restaurant as a result of the post? In other words "What's the likely conversion rate?" Without undertaking a paid Advertising Campaign and putting cash into Mark Zuckerburg's pocket you will never know your true conversion rate. You have no way of monitoring it...accurately or otherwise.
For every 1000 fans on your Facebook business page your post reaches an average of 64 people.
At a realistic Conversion Rate of 1% you barely get one person to attend your restaurant. 

What's Your Facebook Fan Base?

Here are three typical practical examples:
1. Award winning restaurant has a following of 2017 fans/followers.
    6.4% of 2017 = 129 people of which 1% conversion rate = 1.2 people
2. A previously award winning city based restaurant has 579 fans/followers.
    6.4% of 579 = 37.0 people of which 1% conversion rate = 0.37 people 
3. Fashionable new kid on the block restaurant has 902 fans/followers.
    6.4% of 902 = 57.72 say 58 people of which 1% conversion rate = 0.58 people
The truth of the matter is that Facebook deliberately change their algorithms on a regular basis to force you to pay for advertising if you wish to reach your own audience. That's like paying Deliveroo to steal your database of customers. Oh wait, but takeaways do exactly that! Why would you fall for that trick - you get sucked into using Facebook thinking that your posts are reaching your audience only to find that behind your back Facebook are adjusting their algorithms to deliberately prevent you from reaching your followers! Yes, it's THAT serious. You are continually being conned. 
Let's look at one alternative scenario....

Direct eMail Marketing.

According to Mailchimp - the leading database platform:- 
The average open rate for all industries we analysed is 21.33%. Open rates are one of the best ways to tell whether your email strategy is working.

Average email campaign stats of Mailchimp customers by industry.
Industry   Restaurant
Average Open Rate   19.77%
Average Click Rate   1.34%

So for every 100 customers on the database 19.77 people will open the email. For every 1000 customers on the database 197.7 say 198 will open the email. 

Then the 'Click Rate' are those number of people who will go a stage further and act - maybe click on a Book a Table instruction. The click rate is the percentage of the entire database, and not those who opened the email. That converts to:-

For every 100 customers 1.34 people clicked on the 'action' link. 

For every 1000 customers 13.4 people clicked on the link to take action.

Let's return to our examples above:- 

I happen to know that one of the restaurants used in the above examples has built up a database of customers which totals 3122 subscribers. 

Their 'Average Open Rate' is (for the last three campaigns) 54.5% (not the 19.77% stated by Mailchimp)

Their 'Average Click Rate' is (for those same three campaigns) 7.3% (not the 1.34% stated by Mailchimp)

So for every 100 customers 'Example restaurant' achieves 54.5 Opens - for every 1000 customers Example restaurant achieves 545 Opens

As far as Average Click Rate is concerned for every 100 customers the Example Restaurant achieves 7.3 people clicking on the action link - and for every 1000 customers/emails Example restaurant achieves 73 people clicking on the action link.   

So how does that translate to that particular Example restaurant's actual database and any campaigns that are undertaken? And this is the rub:-

3122 subscribers/emails at an Average Open Rate of 54.5% means that the Example restaurant achieves 1701.49 people opening the email. From an Average Click Rate perspective, that means 228 people are taking action! Indeed, this same Example restaurant has in the past (figures not included in the average quoted earlier) achieved an Average Click Rate of 13.3% - that would translate to 415 people have taken action.

Let's tabulate the findings.

Database Facebook Reach - 6.4% Facebook Conversion - 1% Email Avg Open Rate - 54.5% Avg Click Rate 7.3%  
2017 129 1.2 people 1099 Opens 147 Actions  
579 37 0.37 people 315 Opens 42 Actions  
902 58 0.58 people 491 Opens 66 Actions  
 Example Restaurant          
 3122  200  2 people 1701 Opens   228 Actions  

What's This Golden Opportunity Restaurateurs Have Missed?

The simple fact of the matter is that many restaurants have taken it upon themselves to survive by rapidly changing their model and have now introduced Delivery/Collection Services. There's nothing wrong with that per se. The golden opportunity however relates to how the restaurant 'physically takes the orders'. Ninety percent of restaurateurs are taking telephone calls and payment over-the-phone. What they are failing to do is 'automatically collect the customer's email address' for future use. Yes, I understand the ramification of GDPR but the fact is they haven't collected the data straight into a database. Hence they have no records which allow them to utilise the cheapest way to contact a customer and what is more, they aren't building for their future. 

Is that such a big deal? Just refer to the actual figures for Example Restaurant and see how far you would be behind their progress if you have no database to which you could directly email. Whilst you are spending money on advertising via Facebook, or magazines, targeting unknown people, located you don't know where (in other words these are completely unknown potential customers who may not even be within your ideal target market), along with a plethora of other like-minded eateries, Example restaurant is writing directly, for free, to 3122 of the very people who have already dined with them, and have been more than satisfied...and it only takes a few minutes of their time! 

What can we do about establishing an effective restaurant database? Talk to Taste Swansea. You can email us here