Marketing to restaurants defies benefit-oriented marketing

Restaurant owners and operators don’t exactly have it easy these days. Restaurant failure rates are high, and many restaurants are fighting to keep their doors open and make a profit. High failure rates mean that before any given restaurant even has a chance to get up and running, the odds are already stacked heavily against them, especially in the eyes of the business world.

High failure rates unfortunately translate into more than just failing restaurants. They translate into scared-off investors, industry lulls and huge market shifts. The reality is that more restaurants will fail than succeed¹. This fact demonstrates that entrepreneurs looking to open restaurants need every ounce of help they can get.

Fear of failure is an emotion that can be motivating for some and paralyzing for others. So how does this mindset impact marketing to restaurants? The reality is that many restaurant operators’ survival instincts will kick in. Many restaurant operators are entrepreneurs at heart, looking to do whatever it takes to succeed, or more importantly, not fail. Marketers marketing to restaurants must strive to address this fear directly, through the use of their products or services, in order to help restaurant owners truly overcome the odds.

This is going to seem unnatural at first, but discussing the consequences and what restaurants have to lose can be an effective strategy, as much as discussing what restaurants have to gain, and promoting the benefits. Sounds odd at first, and counterintuitive to everything we’ve been taught and seen work in marketing.

So, why do most restaurants fail?
What are the major reasons that most restaurants fail? According to an estimate from American Express, 90% of all restaurants fail in the first year. Cornell University estimates the number at closer to 60%, but notes the likelihood of failure increases to 80% within the first 3 to 5 years of operation². Challenges range from themes common among many small businesses such as lack or mismanagement of capital, as well as more unique challenges to the restaurant industry such as high turnover, paying overly high wages, rising food costs and low capital reserves.

If you’re marketing to restaurants, that means you should leverage your products and services in a way that helps restaurant operators overcome this fear of failure. Restaurant operators recognize they are in a tough industry, with low chances of success, so don’t be afraid to address how your products and services can help them overcome these challenges.

Gaining insight into a restaurant owner’s fear of failure and helping them do a better job at managing their business isn’t just about showing the benefits of your products or services. To leverage this insight discuss the the downside of what happens if a restaurant operator doesn’t use your company’s services. Highlight what they have to lose. To compete in today’s customer-driven marketplace, marketers must harness the power of their marketing efforts. Download J&Cs free ebook, Techniques to enhancing marketing communications performance, to ensure your efforts are being optimized to its fullest potential.

The key to applying insights.
Only 10 to 20% of all restaurants in existence have made it past their 5th birthday. One of the biggest lessons many restaurant operators learn the hard way is where there is action, there will be consequences.

To leverage this insight, J&C architected a campaign for the National Restaurant Association that helped restaurant operators understand their risks. The campaign was composed of a number of outbound communications that led the restaurant operator to an online risk assessment. The risk assessment was able to engage 90% of users, a pretty astounding result.

The approach was predicated on helping restaurant operators self-realize what risks exist within their operation. Empowering operators to gather information on their own terms was also essential to the campaign’s success. The campaign also played off the insight of the entrepreneurial nature of independent restaurant operators.

Although most of us classically trained marketers were taught at a young age, “benefits, benefits, benefits,” there is room for marketing to the downside in certain industries. The restaurant industry is one of these exceptions. While no one likes to focus on the negative, applying key insights like fear of failure can be the key to getting a restaurant operator’s attention.

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