Managing Restaurant Cashflow Problems Through Your Marketing Mix
One of the most frustrating and disconcerting aspects of running a business, especially a restaurant business, is reining in the kicks and flips of the daily cashflow.
…and the very next, you’re short and grasping for more resources.
Managing cash flow is not just a problem of unprofitable restaurants. Even popular establishments may have this issue. How can you keep up with your cash situation? We suggest that you look at your marketing mix model.
Product: Watch out for your inventories.
Shortages, whether in monetary terms or otherwise, can be a real distraction from productive activities. Disruptions in operations will affect your bottomline, whether you feel it immediately or not.
Keep a close eye on your store’s inventories and make sure they are updated frequently. Make sure that your suppliers can guarantee your inventory stock, and are flexible enough to be able to send in rush deliveries if there’s a demand for it.
Pricing, People, and Promotions: Discounts and promos aren’t always the answer.
Some restaurant managers fall into the trap of thinking that the best way to get customers inside their stores is to give out a promo. They create eat-all-you-can days (or even months), give away 50% discount coupons, or sign up with deal sites. Marketing money is funneled into a one-time, big-time promotion.
Sure, traction for promos are high. People talk about it online and offline, hype is high, and people will definitely come in. In short, your awareness and trial levels are off the charts. Congratulations, sales shot up! Did you, however, look at your retention and loyalty rates?
The problem with any promotion is the follow-through. Sometimes, a brand is so focused on executing the project that they forget what is truly essential for any business: customer experience. Php 200.00 for an all-you-can-eat buffet? 75% discount on your second order of thermidore? People will definitely go for it! But are your frontliners smiling whilst they give out the orders? Is the service fast? Is the food delicious?
You’ll find that, if your service is not at par with industry standards, these people will not come back anymore, and that proves to be a very big problem in your cashflow. You spent so much on promotions, and yet the number of repeat customers are very low. Instead of concentrating your marketing promotions, say, once-a-year, spread it out and focus on the customer touchpoints.
Place and Packaging: Prevention is better than cure.
Time and again, it has been proven that customers are more likely to write about their bad experiences than their good ones. One of the top complaints of diners (at 76%!) is a dirty restaurant. Some reported specific complaints are dirty utensils or plates, use and reuse (and reuse, and reuse!) of wash cloths to wipe down a table, and (ugh!) filthy restrooms.
Make sure that your crew members are aware of the rules of engagement in your restaurant. Emphasize the need for cleanliness in all aspects of the service, from greeting them at the door down to clearing out their tables.
As long as you are attuned to your marketing mix model, cashflow problems can be mitigated. Ensuring that your restaurant is at its peak every day will be able to save you the effort of worrying about your resources.
