Restaurant Trade Area Research

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.

Having done scores and scores of projects in fast food restaurants over decades - I’ve often advised clients to do `operation ratings’ on our questionnaires. This might involve asking respondents (your customers) to rate things like speed of service, cleanliness of the unit, value for the money and so forth. But, the one attribute that when `crossed’ with frequency of usage that stands out is `friendliness of the employees’.

It seems that in this day and age - despite being told by the media we are off in our own world and don’t want to be bothered - that customers react to friendliness MOST. Since the person who interacts with the customer is the main person to project this image — it is imperative to make sure that person has a friendly engaging voice (at the drive thru speaker) and in-person on the cash register - that the person is one of your BEST employees for eye contact and smiling. (Again, a good clear voice is needed).

In future posts, I’ll tell you specific figures for how often a customer uses a restaurant when they rate friendliness an 8 rather than a 10 — once you know, you will act quickly. Don’t wait - do it today.

Today’s Links

NYC Chains Have to Post Calorie Counts

http://www.bloggernews.net/116809   Yep, right next to the product on the menu, in the same font, must be the calorie count. Logic would suggest that some shift in food orders will be the result of such laws. It would also suggest some erosion of usage perhaps by less committed users of your brand.

Calorie Counts on Menu Boards

http://www.chattershmatter.com/2008/07/20/nyc-fast-food-chains-add-calory-counts-to-menu-boards/  Same story, slightly different slant.

Law to Restrict Location of Fast Food Restaurants in LA

http://thepacker.com/icms/_dtaa2/content/wrapper.asp?alink=2008-16452-821.asp&stype=produceconcepts&fb= In South-Central LA - to improve health of youth. Here the hope is that by restricting Fast Food Brands that `other healthier’ choices will open shop.

Based on today’s links - Government involvement in FF seems just another example of our BIG government.