You have the marketing automation platform, your restaurant is active on social media, you’re sending emails … but, how do you know if any of it is working? Measuring the success of your marketing is one of the most critical — and most often overlooked — pieces of a restaurant marketing strategy. Your venue will have different marketing goals than a bank would, or a commercial construction company, or a hospital. Knowing your goals, and what moves the needle toward hitting them, is the first step in tracking ROI of your marketing.
Set SMART goals
Marketing can’t solve all of your business woes, and expecting it to do so is setting yourself up for disaster. Before you start marketing, sit down and ask yourself, “What do I need my marketing to accomplish?”
Let’s say your dinnertime business is booming, but you could really use more lunchtime traffic. You plan to run a campaign featuring a BOGO coupon only valid during lunch hours. Now you have a business problem and a marketing campaign to solve it.
Launching the campaign is a great idea, but you need to first figure out how you’ll define success. What is the goal of the campaign?
SMART goals meet the following criteria:
If your restaurant has a wide menu and total meal prices vary greatly, you may want to measure success by the total revenue brought in between 11:00 a.m. and 2:00 p.m. Or, if your total meal prices are within a fixed average, you may instead want to track orders between those lunch hours.
How much growth is realistic? To determine this, you could compare your lunchtime orders from past years and determine the rate of growth without marketing. If the average rate of growth is 3 percent year over year, and your coupon campaign is limited to email and social, you may set a goal something like this:
Our six-month marketing campaign will seek to increase lunchtime orders by 5 percent over last year.
“Lunchtime orders” is specific. A percent year over year growth is measurable and attainable. The goal is relevant to your business since it will increase revenue. You’ve given your campaign a six-month duration, so you can check back at the end to see how you did.
Congratulations! You now have a SMART goal for your marketing. There’s still a long way to go between setting a goal and crossing the finish line. Next, you need to determine how you will track your progress.
Tracking ROI with key performance indicators (KPIs)
With Google Analytics, social media analytics, and marketing automation platform reporting, you have more marketing data available to you than ever before. It’s important to remember that just because you can track something doesn’t mean it’s an indicator of your business’s marketing success. You need to identify the Key Performance Indicators (KPIs) for your marketing in order to properly track your progress.
If we look at the goal above, what metrics would best show progress? Daily sales, for sure. But, let’s say you sent out an email to your list with your BOGO lunch coupon? You’ll want to track how many times the coupon is redeemed, as well as the click-through rate (CTR) on the email. While the CTR isn’t directly indicative of a sale, it does show interest and intent. It indicates that what you are doing is working.
If the promotion is featured on social media, you should track the engagements on those posts. How many times was it Liked, Shared, or Commented On? Positive social engagement is another indicator that your message is resonating.
Knowing which metrics matter most can help you avoid getting caught up in vanity metrics that don’t relate to your business goals. Proper KPIs can also help you pivot faster when something isn’t working. If your email has a good open rate and CTR, but folks aren’t coming in to redeem the coupon, you may want to try a different offer. The data indicates people were interested, but the incentive wasn’t enough to get them through the door.
If you have guest WiFi with analytics enabled, you can also track foot traffic in and around your restaurant during lunch hours. Does it pick up around lunchtime, even though your business hasn’t? Consider some outdoor signage for your promotion. If you have a WiFi marketing platform, share your promotion on the welcome page after users log in.
Finally, figure out what your current monthly metrics look like for your KPIs. These are called benchmarks. They’re your starting point. Measuring your KPIs against benchmarks lets you see if you’re moving toward or away from your goal.
Close the loop when tracking ROI of your marketing
Knowing how many times your coupon was seen and how often it was redeemed in your store gives you the overall conversion rate for your promotion. Put that against your total lunchtime sales and the cost of your marketing in order to determine the return on your investment.
Generally, your marketing should earn your business more than you spent executing the campaign. If your restaurant is new in town, you may need to spend more to raise awareness and get the word out. Your first customers — and their 5-star reviews on Google, Facebook, and Yelp — are worth more to your business than the price of their meal. Consider the total value of each new customer when determining ROI.
That same premise should be applied to your current customers, too. How often do your loyal customers frequent your establishment? How many people do they refer? That’s part of their total customer value.
And hey — why not market straight to those people with a loyalty reward campaign? Now that you know how to set a SMART goal, track the KPIs, and close the loop on your campaign, you can confidently test out new and exciting ways to attract, retain and delight your customers.