A Practical Guide to Determining Your Restaurant Marketing Budget

Obviously you like competition, or you wouldn’t be in the restaurant business to begin with. Competition in the restaurant business is fierce. In order to stay ahead of the pack and remain relevant in a digital-centric online world your restaurant is gong to need a well planned marketing and advertising plan – not to mention a great digital agency partner to keep it all on point.

How much money will I need to market my restaurant?

Aaah yes, the inevitable question of “how much do I need to spend on my restaurant marketing?” There is no “one-size-fits-all” boilerplate you can take to the bank for establishing a restaurant marketing budget. However, there is certainly a minimum base of items you’re going to need to consider and plan for. Thus, I have put together a helpful restaurant marketing guide you can use to guide the process of determination.

What are your restaurant marketing objectives?

Whether you are a new restaurant brand entering the market or an established brand looking to increase your restaurant’s bottom line. It is impossible to chart a marketing plan without having a goal or series of goals. Start by jotting down a simple outline of all your goals, hopes and desires in bullet format.

Some examples of this could be:

  • Generate awareness of my restaurant brand
  • Increase repeat visits to my restaurant
  • Increase my restaurant’s average check amount
  • Spark new and first time visits to my restaurant
  • Promote a new menu offering at my restaurant
  • Get more customers to order online
  • Get more diners to join my restaurant email marketing list
  • Win a James Beard Award

happy-chef

Pick three or four restaurant marketing must haves and table the rest (for now…)

While you may end up with a broad list of items you feel are important to your restaurant marketing, you should select three or four and make these your priorities for the year. Don’t bite off too much and try to address the entire list in the start. This type of action could make your restaurant marketing efforts too disparate to produce any real results. Clarifying your restaurant marketing objectives will help you determine how much to allocate to your restaurant marketing budget by weighing the importance of achieving those objectives relative to other restaurant budget items you have in your business plan.

The average small business Typically spend between 7 to 10 percent of its sales on marketing.
However, retail and restaurants will need to dig deeper and spend a bit more since they are operating in a highly competitive category accustomed to a lot of promotional activity. A start-up restaurant can allocate as much as 30 percent in the first year to market their new restaurant brand, as they’re just getting established. To build restaurant brand awareness in the marketplace a new restaurant will need to invest in a variety of basic advertising items such as but not limited to:

  1. Mobile Friendly Restaurant website design
  2. Restaurant Logo Design
  3. Restaurant Menu Design
  4. Restaurant Interior Design Graphics
  5. Restaurant Menu Order Board Design

Once you’ve established your overall restaurant marketing budget, you need to revisit your objectives to make decisions on how to best allocate the money between different media and programs that are available. Consult with your digital agency to compare various costs associated with the variety of mediums available. You never want to spend your entire restaurant marketing budget on one type of media or a single program. You also do not want you to spread your marketing dollars across too many platforms, as this will thin the results. The right marketing mix to develop and deploy will be entirely dependent upon your restaurant’s situation. I do have a formula based recommendation you can use for a guide to consider.

Consider breaking out your restaurant marketing budget into a 70/20/10 model

With innovative digital advertising and media options coming out all the time, you don’t want to limit your options. The newest restaurant digital advertising mediums offer exciting new ways to reach and engage with eaters. This is particularity true for those diners on the go. While it may make sense for a restaurant to rely on proven marketing media and past successful programs (hence the 70% quota), you don’t want to set your restaurant marketing on auto drive. To achieve the right mix of ingredients between your tried-and-true restaurant marketing tactics and experimental ones, follow the 70/20/10 model. Designate the bulk 70 percent to the already proven, comfortable and necessary items essential to develop your restaurant brand awareness.

Set aside 10 percent of your restaurant marketing budget to test new marketing approaches

Doing the same restaurant marketing programs over and over, or copying what every other restaurant is doing to market their restaurant business is not going to push your restaurant brand to the front line. You still need to try new restaurant marketing initiatives in moderation ongoing. Use the 10 percent to explore new marketing channels and opportunities. However, don’t expect to see any kind of significant return on investment from this 10 percent — at least, not at first. The best return you get from experimenting with new marketing is learning what works and what doesn’t. If you already knew what to expect, it wouldn’t be new and innovative now would it?

restaurant-manager

Expand the profitable restaurant marketing initiatives you tested

Apply the remaining 20 percent of your restaurant marketing budget to build out and expand upon the most successful marketing initiatives you tested using the previous year’s 10 percent. Make sense?

By using this restaurant marketing approach, your marketing will maintain a constant energy of introducing new programs. Just like menu offerings, a restaurant needs to roll out options to keep their restaurant brand and marketing fresh. Using the 70/20/10 approach will allow your restaurant to stay on the leading edge, while still involving a variety of proven restaurant marketing programs to keep the sales sizzling throughout the year.

Successful restaurant marketing ALWAYS begins with a plan

Consider developing a 52-week restaurant marketing calendar. If you are a new restaurant brand start-up, you will need to plan a shorter time frame of three to six months since there will be many unknowns that could arise. The goal is to designate a budget for your restaurant marketing efforts in advance. Consult with your digital agency to ensure the tactics and campaigns they develop will line up with your overall restaurant business plan. You’ll encompass a variety of restaurant marketing items during the first year of operation, just a few of them to consider:

  1. Restaurant Grand Opening and PR Event(s)
  2. New restaurant menu offerings
  3. Restaurant promotions during key seasonal points during the year (IE: holidays, local happenings, and other relevant events)
  4. Developing a Dining Reward Loyalty Program

Of course, you should keep a slush fund reserve of marketing funds to spend opportunistically as well, (though I realize this may seem a bit contradictory to what I have just written this entire article about). The main takeaway from this article is intended to bring awareness to the importance of planning your restaurant marketing plan ahead. A restaurant operator should not be planning their marketing spend on a month-to-month basis. Even worse is when we are contracted by a new restaurant brand to soon realize that they are simply shooting from the hip. (think last ditch Groupon deals to generate foot traffic on this one). By developing your restaurant marketing plan in advance, you’ll be able to better plan your staffing and inventories better, take advantage of media-buying strategies, and coordinate solid restaurant marketing programs to complement and build off each element.

Need a little more extra guidance to get your restaurant marketing plan in the works? Download our simple to use FREE Restaurant Marketing & Planning Guide to get started.


Note about the author: As Business Development and Client Relations Director at TMC, Brenda rounds out the firm’s creative branding strategy by infusing real world business marketing tactics. Brenda possesses a twenty-year history having worked as a Director of Operations in the direct to consumer retail industry. When Brenda’s not leveraging her common sense approach to marketing during TMC strategy sessions, she can be found posting, tweeting and showing the nearest stranger the most recent iphone photo library of Charli, Destry and Tyson. (Her prized grand babies)

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