Market success

A bit of market research could have your restaurant this full.

A bit of market research could have your restaurant this full.

In a perfect world, you’d have buckets of spare cash to pay market researchers to gather data on your potential customers. But while no-one lives in that perfect world, there’s still a lot you can do yourself to stay ahead. By Sharon Aris

Nick Salerno, owner of Stella Blu, a casual Italian restaurant on the beachfront in Sydney’s Dee Why, has opened and onsold a few restaurants. But Stella Blu was one of his originals, and it needed work. Rather than let it go, Salerno decided to drive it up a notch. But what would keep the regulars coming back while allowing him to expand?

Salerno set about doing some market research with the people who knew it best—his customers. He already utilised a brief end-of-service questionnaire for them but now he added another question. ‘If we were to open another establishment, what would you like?’ The answer came back loud and clear—‘a bar.’ Salerno knew he didn’t need to look for another location. With a renovation, Stella Blu could easily accommodate one. “I had the idea awhile ago,” he says. “But getting that info back gives you the confidence to do this.” With bar licences costing around $15,000 and renovations another $100,000-$200,000 out of pocket, that confidence is important. But this also fits with Salerno’s philosophy. “You have to keep reinventing yourself these days. You can’t walk around in flares all your life. Every couple of years we do something with the restaurant.”

While Salerno’s at-home research told him what to do next, for others it can tell what not to do. Peter Marconi is the second-generation owner of Pino’s Pizzeria Restaurant, an Italian BYO in Crows Nest, Sydney, taken on by his father, Pino, in 1973. “It’s harder when you’ve been in the business for a long time. You think people stay the same,” observes Marconi. But even institutions have to evolve. First prompted by the dining slump that accompanied the Sydney Olympics in 2000, “the first time we’d been consistently quiet for three to four weeks,” Marconi sent out a simple email to his mailing list asking them what they thought of the idea of Pino’s getting a liquor licence. The response was large and emphatic. “Seventy per cent said ‘don’t change anything’,” he says of the nearly 200 emails back. “Getting a licence was ok, but they wanted us to stay BYO as well.” And 20-30 per cent pointedly added ‘don’t put the prices up.’ “It’s what I expected,” he adds. “They’re coming to us for what we are, not what we can be.”

Knowing what he couldn’t do, Marconi has taken time to figure out what will attract new business. He’s going ahead with the liquor licence, which will help diversify the income stream while still allowing food prices to stay low, and a renovation that will open up an upstairs area, move the kitchen to a better location and make the toilets disabled friendly, while largely leaving the feel of downstairs unchanged. “We don’t want to change what we’ve got,” he says. “But we are going for the cream on top.”

Grant Lewers, director of Restaurant Marketing, a firm specialising in customising restaurant databases, says talking with current customers is easily the first and best market research strategy. He suggests including a brief survey card in the billfold with an offer to join the mailing list, along with an incentive like a complimentary bottle of wine or meal when they return. “People won’t lie with the pen,” says Lewers. “But they might to your face to be polite.” Keep the survey brief and easy, he says, with a question about the food, the value, the level and speed of service and how often they dine out, with tick boxes for answers on a scale of 1-5. Then get out into your local community and research with people whose opinion you value—real estate agents, hairdressers, car dealers, the local mayor, people who dine out a lot. Offer them a meal on the house so long as they’re honest about the restaurant. “Everyone loves to be a food critic,” he says. “So ask ‘can you recommend another restaurant business I should visit, and why?’”

Susan Stancombe, managing director of Stancombe Research and Planning, a strategic market and social research agency, says there’s another easily forgotten resource all restaurateurs and caterers have: their staff. “They know a tremendous amount. Go through a SWOT [supports, weaknesses, opportunities and threat] analysis with them. They have the benefit of being on the coalface. The better relationship you have with your staff, the more honest they will be.” She suggests a feedback sheet where wins and losses for the day can be recorded, and a book for staff to write into at the end of shift.

Then, she says, if you do want to do a focus group—say to trial a new menu—make sure you pilot it first. “Make sure none of the questions are offensive, ambiguous or off track. And remember, any research is also an extension of your brand. So don’t ask ‘why is our food so bad.’ Use friendly terms if you’re a friendly-style restaurant, business terms if you service a large business clientele.”

For this reason, says Stancombe, you should also be clear when you’re not an expert at something and call in the professionals. “Focus groups are called focus groups for a reason. They need an objective in mind. I’d not recommend using anyone who isn’t focus groups trained in it. Otherwise you get endless discussion, or there might be a negative respondent who monopolises everything.”

There are other traps, too. It’s all too easy to ask leading questions to get the answer you want, or to jump in with justifications every time a criticism is raised. Which means, at the very least, if you want useful research try not to be directly present when the group is discussing.

Finally, there’s looking at how your business fits into the broader changes in the economy. In July 1998, the Harvard Business Review ran a seminal article called ‘Welcome to the experience economy.’ With the humble birthday cake as an analogy, the authors describe its recent progress from home-baked, to packet mix, to gourmet bakery item, to now just one part of the fully outsourced birthday party experience. The message was the future, particularly for business in the service economy, lay in staging experiences. It’s something Dr David Solnet, academic and chair of the Queensland Restaurant and Catering Association State Awards judging committee emphasises. “People are paying for experiences, not things,” he says. “So the way a place looks, the atmosphere, the quality of the people, the food quality, the temperature, they all come into that. When you talk about the difference between the winner and the next couple of restaurants, it’s rarely the food. The food in the top places is all good. It’s almost always the service side of things that makes the difference.” In one category, for instance, the difference between the place winning or not came down to the coffee. Least you think that a bit harsh, think again. It’s exactly how your customers are assessing you. Indeed, the benchmarking the awards give is one of the best reasons to enter. That, and the judging feedback all states now provide to entrants.

John Kilroy certainly thinks so. Kilroy’s Brisbane restaurant Cha Cha Char has thrice won best steak restaurant in the Restaurant and Catering Association National Awards for Excellence, and he’s explicit as to how. ”I use the criteria sheets from the awards,” he says. “Every time we have a meeting, we go through it to see how we are going. Before we had these sheets I’d use secret shoppers to come in. Now my supervisors look at it all the time.

“Dining is an experience. It’s not just the food. Meeting and greeting, answering the phone—it all contributes.” On the board of the state association when the category list was put together, Kilroy is proud of the extensive nature of the assessment. You have to be driven by customers, he says. “If someone says a dish is too spicy, look at altering it. People are giving complaints to help you. The person who doesn’t like you won’t make a complaint. You have to take it in and listen to them.”

It’s this kind of customer-focussed openness the experts say is key to all good research. “Honesty hurts,” says Grant Lewers. “But there’s no point in doing it if you’re not prepared to hear the bad stuff. Create a space where people are going to be brutally honest.” Then act on what you hear. There’s no point in spending your valuable time or money if you’re not prepared to put what you’ve found into action.

This great content is produced for members of the Restaurant & Catering Association. Find out about becoming a member here.

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