Despite what you as a restaurant owner may have been told - the number of transactions your restaurant does, compared to another time frame (say a year ago) - does NOT mean your customer base size has a direct correlation. THE ONLY WAY TO KNOW YOUR CUSTOMER BASE SIZE IS WITH REAL MARKETING RESEARCH.
Why? Because your customer base size isn’t dependent on the number of transactions - it is dependent on WHICH CATEGORY of user makes the transaction. For example, if 24% of your customer transactions are with once a week users and 24% of your customer transactions are with customers who come every two or three weeks (see last post below as an example) — THEN OBVIOUSLY, THE NUMBER OF CUSTOMERS WITHIN THE EVERY 2-3 WEEKS CUSTOMER BASE IS OVER TWICE THE NUMBER OF CUSTOMERS (who come about half as often).
So, it is THE MIX of customers - that determines the number of actual customers in your customer base. Your year to year transactions could be UP and yet your customer base may be DOWN in size - AND VICE VERSA. I will literally tell you more about `the formula’ soon - in future posts. Or, find out more by visiting my Trade Area site at www.squidoo.com/tradeareasurveys
But as promised, more from the figures of last post:
3 stores - $2,670,000 Sales (rounded)
customers that come
4+ times wk - 3% of trans - 80,000 in sales - 49 customers - 1,630.00 yr
2 or 3 times a week - 13% of trans - 348,000 sales - 398 customers - 874yr
Once a week - 24% of trans - 642,000 in sales - 1,796 cust - 357.00 yr
Once every 2-3 weeks - 24% of trans - 642,000 in sales - 3,628cust - 177yr
Once a month - 12% of trans - 321,000 in sales - 3,704 - 86.00 yr
Once every 2or3 months - 9% of trans - 241,000 in sales - 5,454 - 44yr
Once every 4to6 months - 1% of trans - 26,000 in sales - 2,145 - 12yr
Less than every 6 months - 7% of trans - 187,000 in sales - 21,758 - 8yr
First time users - 7% of trans - 187,000 in sales - 25,376yr
As you can see from the figures above, for this 3 store contiguous FF market - 9 years ago - 14% of transactions (bottom two frequency levels) contained 46,000 people while the top 16% of the transactions contained less than 500 people. YEAH, how you market MATTERS.
But, understanding your REAL customer base is essential to not wasting dollars. —————— Hey, feel free to leave a comment - and please, bookmark and return for slices of restaurant research and restaurant links. Also, forward my/this link to others who own a restaurant. Thanks.
Today’s Restaurant Links
McDonald’s Success Continues
http://www.allheadlinenews.com/articles/7011881489 Same store sales figures -, less than one minute read.
Chick-Fil-A; Much More Than Just Chicken
http://www.thecitizen.com/~citizen0/node/30742 Remember my previous post about Friendliness being the attribute with the most `customer’ power? Getting the details right about customer serviceis an attribute of Chick-Fil-A. Re-juvenate that drink sir?
Cleveland’s Soul Food Festival
http://www.cleveland.com/entertainment/index.ssf/2008/08/tickets_going_fast_for_clevela.html
Quick read - being apart of the community is priceless.
Survey Yields Worrisome Restaurant Cutback By Customers
http://www.bizjournals.com/tampabay/stories/2008/08/04/daily44.html 3 minute read based on REAL research — is it true that only 15% of all customers are unaffected in this downturn in their usage of restaurants? Worrisome and applies to all markets.
Fast Food Is Bad
http://www.lavistasun.com/site/tab6.cfm?newsid=19896507&BRD=2712&PAG=461&dept_id=557008&rfi=6 The ragging continues in this two minute tirade about parents not setting good examples.
Finally, my blogroll on the right will tell you more about my marketing research services. Come back Tuesday for more - thanks for reading, again, please send this link to another restaurant owner like yourself.
